Year In Review & Alcohol Predictions For 2023

We had a question and answer session with Dan Newcomb of Liquor License Advisor about the year that’s past and what’s to come for the liquor license industry in 2023.

What was the most common question you got from liquor store owners in 2022? What about restaurant owners?

Over the course of 2022, the most common question that has been a theme amongst liquor store owners is how to maximize the sale price of their store, having sales trending downward since the pandemic. Potential buyers have been requesting 2022 sales because they feel like they reflect earnings before COVID. Since the pandemic, owners have been trying to rejuvenate their business model to stay competitive, and now, with the challenging economy, owners are once again feeling the sense of unsettlement that they had hoped was over. Our team has the knowledge and understanding of the industry, especially during these times, to ensure our clients receive the maximum return on their investment. From start to finish, we help our clients with financial positioning, identifying key team members (attorneys, accountants, etc.), marketing, finding the right buyer, and closing out the sale.

To read the full article – check out The Advisor Magazine – Issue 22.

Small Retailers and Package Stores Need Your Support On Question #3

In our latest Advisor Magazine, we included a campaign ad produced by the 21st Century Alcohol Retail Reform Committee outlining why you should vote yes on question #3. The video explains that locally owned package stores, independent markets and convenience stores initiated the ballot question. Not only will voting yes help save Massachusetts small retailers and package stores, but it will support consumer convenience, public safety, and tourism.

Visit https://www.yeson3mass.com/ for more information on how you can support this campaign!

To read the full article – check out The Advisor Magazine – Issue 21.

Restaurant’s Pandemic Adjustments

What’s Here To Stay For The Industry

An article posted in early July on rebusinessonline.com entitled “Retail, Restaurant Industries Embrace Post-Pandemic Design Shifts” addresses the post-pandemic shifts in consumer behavior, as the ease of ordering online with multiple pickup and/or delivery options has become the norm over the past few years. Although the pandemic is behind us, the behaviors consumers adopted are not, and consumer behaviors and expectations when it comes to shopping, dining, and drinking have changed, and businesses are paying attention. Let’s take a closer look at how restaurants are adapting.

The article identifies Border Foods, one of the largest privately held Taco Bell franchises in America, as one restaurant that has worked to create a new restaurant concept designed around the established fast-food model – but an elevated experience, with two-stories and four drive-thru lanes. Josh Hanson, founder and CEO at Vertical Works and WORKSHOP (the company behind the Border Foods redesign), states that their goal was to offer a “highly personalized customer experience” and that “the pandemic accelerated this expectation, as retailers were forced to connect with consumers in new ways.”

To read the full article – check out The Advisor Magazine – Issue 18.

More Liquor Licenses Likely Coming To Boston For On Premise Use

Home Rule Petition Coming To The City of Boston

A Home Rule Petition was filed on April 1, 2022 regarding the allocation of liquor licenses in the City of Boston, as supporters of the petition argue that there is a disproportionate distribution of liquor licenses across the city and that “the well-documented racial wealth gap in Boston shows that it is crucial for MWBE’s [Minority/Women-Owned Business Enterprises] to have equitable access to liquor licenses in order to advance economic equity”.

The petition requests that 200 non-transferable licenses (meaning that if the business closes, the license would go back to the city) over a three-year period be distributed to establishments with a capacity of 50 people and under in the following neighborhoods: Dorchester, Mattapan, Roxbury, and Hyde Park, where there is currently a lack of licenses. For example, the petition points out that out of the 1,432 liquor licenses in Boston, Mattapan holds only ten of them.

It is proposed that all liquor licenses in the City of Boston shall increase by at least 10% over a ten year period. These licenses are for on premise use only, and because they would be non-transferable, these licenses would be given back to the City of Boston if revoked or canceled, to grant an application with the same requirements.

WCVB5 Boston commented on the petition in an April 7 update, describing it as “a tool for addressing the city’s racial wealth gap”. Likewise, an April 17 Boston Globe article entitled, “Waiting for liquor license reform in Boston”, comments on the petition, stating that: “Reforming liquor license law isn’t ultimately about booze. It’s about economic opportunity”. The article argues that because liquor license holders tend to open establishments in wealthier parts of the city, the less wealthy neighborhoods are hurting. The article also calls out Boston’s state-imposed hard cap on restaurant liquor licenses as being “antiquated and stubborn…a vestige of a bygone time”.

On June 16th, 2022, a City Council Committee on Government Operations hearing was held regarding important matters for the City of Boston, including this home rule petition, which consists of two Dockets: Docket #0465 and #0435.

Docket #0465 is the Petition for a Special Law Regarding an Act Authorizing Additional Licenses for the Sale of Alcoholic Beverages to be Drunk on the Premises in Boston, with sponsors being Councilors Brian Worrell, Ruthzee Louijeune, and Ricardo Arroyo. Docket #0435 is the Petition for a Special Law Regarding An Act Authorizing the City of Boston to Grant Four Additional Licenses for the Sale of Alcoholic Beverages to be Drunk on the Specified Premises, with sponsors being Councilors Ruthzee Louijeune and Julia Mejia. If you were unable to attend the hearing, we’ve got you covered with an overview of the discussion to provide you with the most current updates.

To read the full article – check out The Advisor Magazine – Issue 17.

Doubling Liquor License Allotment In Massachusetts

A 2022 ballot proposal seeks to change the liquor license industry as we know it – but in a staggered, controlled fashion. Although there are a few components to the proposal, the most impactful portion of the ballot question proposes to increase the number of licenses available to retailers from the current allotted nine to 18. This proposal comes on the heels of Cumberland Farms unsuccessfully pursuing an unlimited number of beer and wine licenses for food and convenience stores, which created quite the buzz in the liquor license world. Although similar in nature, this new proposal requests additional, not unlimited, liquor licenses, which may lead to a warmer reception than the one the Cumberland Farms proposal met, as this proposed increase is gradual in nature. Currently, each corporate entity or individual is limited to a maximum of nine total alcohol licenses, including both wine & malt licenses and all-alcoholic beverage licenses. All nine of these licenses can be all-alcoholic licenses as of now, a ratio that would change under the proposed plan.

This proposal offers a staggering increase of this allotment, which would be laid out like so, according to a recent State House News Service report:

-Increase to 18 licenses in 2031

It is important to note that all-alcoholic beverage licenses would be capped at seven, and the remainder of the licenses would have to be used for wine & malt.

However, any licensee who currently holds nine all-alcoholic beverage licenses would be grandfathered in and allowed to keep all nine all-alcoholic licenses.

Mass Pack Executive Director Robert Mellion describes the proposal as an “olive branch to food and convenience stores who previously sought to uncork an unlimited number of beer and wine licenses”, according to State House News Service. Mellion is also quoted as saying that the proposal “is intended to end some of the constant disruptions in alcohol retail that has been going on since 2006”, in a Boston Business Journal article entitled “Six Proposed 2022 ballot initiatives for businesses to watch”.

Cumberland Farms surprisingly did not file a ballot proposal related to alcohol sales, as expected, and this increase from nine to 18 licenses serves as a compromise between Cumberland Farm’s former proposal and what is currently allowed. The State House News Service article elaborates on the notion of compromise by quoting Mellion as saying that, “because many shoppers want to purchase beer or wine alongside their groceries and because package stores rely on spirits to drive much of their business, the language could serve as a compromise that offers benefits to both camps.”

The ballot question contains a few other components as well, such as banning alcohol sales at self-checkout stations; allowing liquor stores to accept out of state IDs and allowing these IDs to be “reasonable defense” against allegations of selling to a minor; and mandating fines based upon a store’s gross sales, rather than alcohol sales alone, if a store is found selling alcohol to a minor.

Regardless of where you stand on this issue, the liquor license industry is changing, and the Cumberland Farms proposal and this subsequent 2022 ballot proposal are paving the way for this change that some owners don’t want to stick around to see how it ends.

Industry Spotlight: Ben Jerrom Advises Buyers How To Get The Upper Hand

Ben Jerrom, Liquor License Advisor Partner & Buyer Specialist

In April of 2018, Liquor License Advisor welcomed Ben Jerrom as a Partner and Buyer Specialist.

Jerrom learned to navigate legalese and politics early in his career after interning at the Massachusetts State Senate, working for a local Boston attorney, doing some liquor license lobbying and working in New York City at Baker & McKenzie LLP.

Jerrom admits those experiences have helped him transition nicely into the liquor license and liquor store industry as he has mastered how to communicate effectively with very high-powered, high-operating professionals.

At Liquor License Advisor, Jerrom works closely matching Buyers with stores and licenses that suit their capacity – he gives them the greatest chance of success by working closely throughout the deal with all key stakeholders involved.

Here’s the Q&A with our own Client Concierge, Michelle Hansford, who took to interviewing Jerrom.

Where do you spend your time outside of the office?

I love the outdoors in all sorts of different ways. It’s not limited to the mountains, or flatlands, or the ocean. I love doing outdoor activities. I try to get my dog off-leash somewhere at least every other day. I go out on my boat, both with my wife and alone, and I love to hike and camp and go fishing. I do love video games, as a typical millennial boy, and I like to read a lot of news, as political stuff is what I went to school for and I do enjoy educating myself on it a lot.

What’s your favourite part of a transaction for a buyer deal?

My favourite part is when a buyer is clear about what he wants and the pre-offer phase. There’s this dopamine rush when you know you have someone really close and they’re excited about a store and there’s all of this opportunity rushing in– and none of the hurdles have gotten in the way yet. Being able to guide them and make them comfortable for the rest of the way is definitely my favourite part.

Would you say that you have a process that you guide buyers through?

Yeah, usually the buyer finds a store through Biz Buy Sell, our website, or an email blast, so step one is calling me. Step two is receiving the basic level information about the store and them checking out the store. Step three is the most crucial stage which is getting them enough information for them to feel comfortable enough to make an offer. You don’t want to flood them with too much information during that first call; you want a certain level of excitement and emotional investment so there’s positive buildup before you get into the nitty gritty of everything.

What’s your advice for prepping buyers?

I think this question has to do with the level of experience a buyer has. A first or second time buyer should have all of their finances in order, number one, and number two is to trust the advice of your advisor, especially if you’re working with us. A good example is when we’re working with attorneys. I refer someone to an attorney because I think that attorney will be ideal at getting that transaction from offer to close as smoothly and as quickly as possible. Liquor stores and licenses is all I do, so trusting us along the way is the best thing you can do. As far as other preparation goes, know ahead of time what’s important to you. Think about storage space, parking needs, neighborhood preference, what type of store do you want, and if you are prepared for the amount of time that you will have to spend there? Do you have someone in your family that you can partner with who will help guide you along? I would rather know your questions ahead of time.

You’ve worked with different experience levels, backgrounds, and cultures. Can you give some insight?

We have experience of working with people of all different backgrounds, thankfully. It’s interesting because sometimes it’s a bit of a study in anthropology because you get to see what’s consistently important to people of different cultures. What the business community is like in the culture where they came from a lot of times reflects how they do business here and how they want to be marketed to. I definitely think that there’s a changing demographic.

When you’re working with a buyer for the first time, what’s the biggest priority in advising them and building a relationship?

Number one, find out what’s important to them, and number two, be honest with them. You don’t want to paint everything in a negative light, but you don’t want to lie to them. I have inquiries come in every day – there’s no shortage of buyers. The buyers I have the best relationships with are the ones I have been the most straightforward with. Honesty is definitely the best policy.

How do you match buyers with stores?

If you’re new to the market, a huge store with a lot of cash flow, commercial tenants, and a big price tag isn’t going to be the right opportunity for you. Don’t bite off more than you can chew, and be honest with what your capacity is. If you need to surround yourself with people who have the experience, do that.

Are there hot markets that are doing really well right now?

At the beginning of the pandemic, stores that operate 30-45 minutes outside of Boston were very attractive to people because they have people who commute in and out, are middle-class, and are very desirable – and who wouldn’t want a store in a nice neighborhood. With working from home continuing for some, this has tipped the scale a bit – I don’t know if there’s a market that doesn’t have people going after it right now.

Delivery companies are by far the hottest market sector we’re seeing right now because they don’t have to deal with the same constraints of the competition like walk-in stores do. It makes no difference to them if there’s a walk-in store down the street. They are making a change in the industry and are accomplishing what most cannot. The pandemic has certainly accelerated that.

Do you have a big win or favourite story so far?

Yes, I do. My friend Ike was a first-time liquor store owner. He is a Nigerian immigrant trying to build a life and is a very fair and honest guy. He was someone from the start who I was honest about how he could get the deal done and what he was capable of, and where we could be lenient and where we had to be firm. I got him a decent volume store, and he’s on his way to building his business. I was originally reluctant to tell him about this store because I wasn’t, at the time, confident that he’d be able to close something like that, but it’s a great example of building a relationship with someone and a great story of putting trust in one another. Thanks to an attorney who did a great job, and his trusting that the people he was working with were the best, led him to something he really wanted.

Questions about buying? Contact Ben Jerrom directly for further details on all of our current listings.

Ben Jerrom

Partner & Buyer Specialist

Cell: 413.544.4960

If you enjoyed this article, you’ll love our monthly publication, The Advisor Magazine – click to view more articles like this in The Advisor Magazine – Issue #6.

We pride ourselves on having all your bases covered for a great transaction in the shortest amount of time. After over 1500+ transactions we’ve learned a thing or two. We know one person is not able to provide the attention to detail and everything else that’s involved – like our Team of 8 can.

The Process of Buying a Liquor License in the United States

In many cases in the United States, the cost of buying a liquor license will vary from state to state. The price can range from approximately $300 to nearly $20,000; in some states, you might even have to shell out upwards of $1 million. If you’re thinking of obtaining a license or have already decided to buy a liquor license, it’s important to budget both the right amount of time and money. Buying a liquor license can take up to five to six months and will have varying fees. Your fees will be different depending on what kind of business you have. For example, if you own a restaurant in Los Angeles, California, and wish to sell beer and wine but not hard liquor, you would pay a processing fee of $100 and $13,800 for the actual liquor license.

You might also be required to pay local fees on top of state fees, which you can find by visiting your state government website’s Department of Alcohol and Beverage Control (ABC) section to find specific liquor license rates for where you live. It’s also important to understand that you may not be able to buy a liquor license directly from your state or city, because there is a limited number of available licenses that can be legally issued based on per capita quotas. In many cases, you might have to buy a license from an existing liquor license holder.

The most difficult part of buying a liquor license is often finding a liquor license for sale. If you don’t have any experience with finding available licenses, it’s best to consult a professional, so if you’re on our site, you’ve come to the right place!

After you’ve found out how much it will cost to buy a liquor license in your state, there are several important steps to follow.

Steps to Take in Order to Buy a Liquor License

Find out what type of liquor license you need to buy.

You can do this by visiting your state’s ABC, which will explain the specific license you need and the specific costs associated with it. The type of liquor license you’ll need to buy will depend on what kind of establishment you own (e.g. bar, restaurant, hotel, etc), what kind of alcohol you want to sell, during what hours you want to sell beer, wine, and liquor, and if you are manufacturing and distributing alcohol, all of the above, or simply selling it.

Prepare everything that you’ll need to apply to buy a liquor license beforehand.

The most important part of buying a liquor license is to be completely prepared before you send the actual application in. That means not only should you have done all of the research, know key terms and aspects like tax liens and state specifications, but you should have all of your documents ready and in order. Among other things you’ll need, you should absolutely have your:

• Business license

• Sales tax permit

• Zoning permit

• Alcohol tax permit

• Health permit

• Building permit

• Signage permit

• Employer Identification Number (check with the IRS)

It’s extremely important to have all of this prepared before filing for a liquor license, because your liquor license application may be put on hold if you don’t have the proper materials and information. If you are a qualified buyer and have all of your materials properly prepared and sent with your application, the process should be fairly smooth.

File your application to buy a liquor license.

Once you have done all the research and prepared everything that you need to purchase a liquor license, you’re ready to file a liquor license application with your state’s ABC. The simplest way to file is via e-mail. Your state government’s website will have all of the official forms you need to download in order to apply. Additionally, you’ll need to supply and file:

• Background check forms (some states might require fingerprints)

• A Certificate of Good Standing from the Secretary of State

• A Signed Lease Agreement to confirm the location of your business

• Financial verification sheets to prove that you’re in good tax standing

• Any potential processing fees required by your state

As long as no complaints have been filed against your business and you are in compliance, the process should be simple and straightforward. However, it can take five to six months before the liquor license is in your hands, so don’t forget to factor in that waiting time.

What kind of liquor license do I need to apply for?

There are many types of liquor licenses that exist, so it’s important to know which one you need to acquire for your specific business or establishment before applying for one. What are the different classes of liquor licenses?

• Arts licenses (e.g. theaters, galleries)

• Beer and wine licenses (e.g. for smaller businesses only planning to sell beer and wine)

• Brewpub licenses (e.g. for establishments that want to brew their own liquor)

• Club licenses (e.g. for private social clubs that wish to serve alcohol to members only)

• Delivery licenses (e.g. for business that plan to deliver alcohol to customers)

• Eating place licenses (e.g. establishments or businesses that primarily serve food but also wish to sell small amount of alcohol, or take-out beer)

• Hotel licenses (e.g. for hotels with bars and/or restaurants that wish to serve alcohol)

• Restaurant licenses or all-liquor licenses (e.g. for a restaurant that wishes to be able to sell all types of alcohol including beer, wine, and liquor)

• Retail licenses (e.g. for grocery stores, convenience stores, liquor stores, and all retail establishments that wish to sell alcohol in closed containers)

• Tavern licenses (e.g. businesses that serve substantial food but make 50% or more of their profits from selling alcohol)

What are the risks of buying a liquor license?

As with any kind of responsibility, there are risks and liabilities that come with obtaining a liquor license. Once you own a liquor license, you have an elevated legal duty to the public and to the patrons of your establishment to serve beer, wine, and liquor responsibly. That also means that criminal and civil actions can be taken against you, and your business may be held responsible for any of your patrons who cause damage to themselves or others. Those who hold a liquor license, or buy and sell liquor, may also face administrative liability penalties such as fines, suspension of a liquor license, or even a full revocation of the liquor license if the establishment fails to comply with government regulations associated with the issuance of the specific liquor license. This is one reason that it’s important to safeguard your establishment with protective and preventive measures before applying for and buying a liquor license.

Making sure that you put comprehensive policies in place for training and supervising employees, as well as inventory control, will help to minimize any risks or liabilities associated with owning a liquor license.

How soon should I start the process of buying a liquor license before opening my business?

Because the time that it takes to obtain a liquor license will vary in many cases, depending on your city, state, or specific business circumstances, it’s wise to begin the process of buying a liquor license as soon as possible. It may take between five to six months to obtain a liquor license, and potentially longer if there are complications. The process of obtaining a liquor license often requires lots of back-and-forth, and is more complex than simply requesting and purchasing it; this is also why having a liquor license broker can make your process easier. The safest bet is to apply for a liquor license well in advance of the time period that you’re planning to open your business or begin serving beer, wine, or liquor.

What should I do while my liquor license is pending?

Depending on what kind of business you operate and what type of liquor license you’ve applied for, you may be required to post a public notice of a pending liquor license if your business is already open. Other than that, you should wait patiently for the process to wrap up, and avoid selling any form of alcohol until you’ve officially bought and have been granted your liquor license.

How long is a liquor license valid for?

The term of a liquor license is generally between one to three years, but the amount of time that your liquor license will be valid for will also depend on local and/or state regulations. Once you obtain a liquor license and note the date when it will no longer be valid, it’s important to plan ahead for when you will need to renew it.

However, obtaining a liquor license once does not necessarily mean that you will be able to automatically renew your liquor license. If you operate your business responsibly, avoid selling beer, wine, or liquor to minors, and operate within regulations, you should be able to renew your liquor license relatively easily.

Can my liquor license be revoked?

Yes, your liquor license can be revoked. If a claim is filed against your establishment for any reason, including employee or patron misconduct, your business may lose its liquor license.

Situations that may cause your liquor license to be revoked:

• Selling liquor at an unauthorized time

• Allowing guests to drink in unlicensed areas of an establishment or outside the bounds of an establishment

• Employing untrained service staff without the proper authorization to sell or serve liquor

• Over-serving someone who is inebriated

• Patrons of your establishment participating in disorderly conduct

• Serving beer, wine, or liquor to underage customers

Can I buy a liquor license from another business going out of business?

It is possible to buy a liquor license from another establishment that is going out of business. In many cases, this may be the only way to obtain a liquor license, given the limited number of licenses that each state can issue to begin with. Many business may actually be looking to sell their existing liquor license. The process of buying a liquor license from an already existing business is similar to the process of buying one directly from your state’s ABC , especially because you must still submit an application.

However, it may often be cheaper to buy a liquor license from an existing business than if you were to buy a brand new liquor license. If you want to find a business that is looking to sell its liquor license in order to begin a license transfer process, you can check your state’s ABC Board and work with a license brokerage like ours to ensure you get the best price during the sale and that you don’t run into further bureaucratic issues.

Can I sell beer, wine, or liquor without a liquor license?

It is illegal to sell beer, wine, or liquor without a liquor license in the United States. Selling any form of alcohol without a liquor license is putting both yourself and your establishment at risk, and is punishable with hefty fines, in addition to time in jail. Even if you have submitted an application to obtain a liquor license, and are in the process of buying one but have not yet been granted a liquor license, it is not advisable to sell beer, wine, or liquor. Selling any form of alcohol without holding a liquor license, even if you have a pending liquor license, will most likely disqualify you from obtaining one in the future.

Do I still need to buy a liquor license if my business or restaurant is BYOB?

In many cases, people assume that operating a business as a BYOB establishment means that it’s possible to avoid applying for or obtaining a liquor license. However, that is false. Although the type of liquor license that you must buy will be different because you will not be buying, storing, or selling your own liquor, it is still mandatory to obtain a liquor license if you wish for patrons to legally consume alcohol on premises.

Why does it take so long to buy a liquor license?

The process of obtaining a liquor license may go smoothly if you’ve properly prepared all of the necessary documents and have acquired the money that you need ahead of time. However, it’s always possible for complications to arise during the process of trying to buy a liquor license. It may take a longer amount of time to buy a liquor license if you do not have all of your documents, if it takes more time to verify your documents or eligibility, or if you have been convicted of a felony. Sometimes, there are simply many establishments that have pending liquor licenses simultaneously, and the state’s ABC needs time to get through all of them.

How do I renew my license if I already have a liquor license?

If you have already applied for and purchased a liquor license previously, the process should be fairly simple when you want to renew your liquor license. Similar to the process of buying a liquor license the first time, the application process will vary depending on your state and the kind of establishment you own. You should receive a notice from your state at least a month before your liquor license expires, prompting you to begin the renewal process if you haven’t already. Renewing a liquor license will require the same forms, and fees will vary by state.