How Can I Tell If a Liquor License Is Fake?

 

Whether you’re looking into buying or selling a liquor license for the first time or dealing with your millionth sale, there’s always one question in the back of your mind: How can you know if a liquor license is real or fake?

 

We get it: Buying and selling a liquor license can be tough—and often there’s a lot of money on the table, particularly if you’re in a state with a quota.

 

For individuals and businesses looking to buy a liquor license, whether new or from an existing business, one of the most important skills you can learn is how to tell if you’re being sold a fake liquor license. Accidentally or intentionally buying a fake liquor license and operating without a bonafide license can get you into a world of trouble with the Division of Alcohol Beverage Control (ABC), so consider us your saving grace.

 

Let’s start with a refresher of what a liquor license is and what it does: It’s a permit to sell alcohol and alcoholic beverages. If your business has a hand in the distribution, manufacturing, or sale of alcohol, you’re going to need a liquor license. That includes businesses from restaurants and bars to hotels, private clubs, or other establishments. And that’s good news: Liquor sales can be responsible for some of the largest profit margins on a menu, depending on the type of liquor—between 76% and 82%. However, that’s all the more reason to make sure that you’re purchasing a legitimate liquor license and not a fake one.

 

What are the red flags that you might be buying a fake license? Here are the most common issues we see.

 

 

You’re in a state with tough liquor license regulations.

 

In New Jersey for example, the Division of Alcohol Beverage Control (ABC) that issues liquor licenses has some of the toughest liquor license regulations in the country. Because of large populations of people and local ordinances limiting the number of retail liquor licenses that are allowed to be issued, it’s harder to obtain a liquor license.

 

In states where there are more strict regulations, it’s more likely to find businesses that are operating with fake liquor licenses or without liquor licenses at all.

 

 

You’re buying a liquor license from a business that’s previously had its license revoked.

 

When restaurants, bars, and other facilities that handle and sell alcohol don’t comply with alcohol regulations law, they can lose their liquor licenses, posing issues for their revenue streams. While some places work honestly and diligently to get their licenses back, that’s not always the case, and people get caught with fake liquor licenses. Although buying a liquor license from a business that’s previously had its license revoked doesn’t necessarily mean you’ll have issues with being sold a fake liquor license, it’s always better to do your research and due diligence to make sure. (As a reminder, this is where a liquor license broker or consultant like Liquor License Advisor comes in handy—we do that work for you.)

 

 

A business’ liquor license isn’t registered with the area’s Alcohol Beverage Control (ABC).

 

Of course, the biggest red flag of all is if you check with the local ABC and no one at the agency can confirm that the business you’re buying the liquor license from has a legitimate license. When you purchase a liquor license from a business that is closing or going out of business, you apply with your state’s ABC agency as if you were applying for a new license. However, you may have already been in talks with a business claiming to have a liquor license to sell you. If you can’t confirm that the license is official with the ABC, it’s likely that it’s a fake liquor license.

 

No matter what state you’re in, you should be able to work with the state to find out if a business is licensed to sell alcohol, and specifically check if a business has a liquor license with its name in its exact location.

This is also where hiring a liquor license broker is helpful so that you can make sure that you’re not getting duped by a fake liquor license. Teams like ours at Liquor License Advisor can make sure you’re in accordance with all regulations; we do the vetting of licenses for you.

Have any questions about the process of buying and obtaining a liquor license? We can help. We know the liquor control laws in numerous states backwards and forwards, including all of the local rules and regulations. We want to ensure a smoother application process by arming you with knowledge and a team who can properly vet everything during the process.

2020 Liquor License Advisor USA All rights reserved