Liquor License Applications – Counsel and Patience Required
Written by: Seth A. Malamut
In their two-page “How to Get a Liquor License in Massachusetts” article, the instructional website eHow.com claims: “applying for your liquor license is a simple and straightforward process.” Contrast this with Boston Magazine’s description of “the state’s byzantine laws” concerning liquor licenses, and a Boston.com blog referring to the Alcoholic Beverage Control Commission (“ABCC”) as “an arcane liquor licensing system that was created because the state feared that Boston would descend into unruly Catholic drunkenness”, and it becomes easy to understand why unwary potential restaurateurs and package store owners get confused, and often misled down the long road of obtaining a liquor license in Massachusetts.
eHow.com may describe the “Difficulty” rating for obtaining a license in Massachusetts as “Moderately Easy”, but most lawyers who have prepared ABCC forms and worked with clients to obtain, sell, pledge or otherwise deal in Massachusetts liquor licenses will likely disagree. The value of quality counsel and prior knowledge of the system (as well as a heaping dose of patience) are the only ways clients can brace themselves for the liquor licensing process here in the Commonwealth. Although the Application for Retail Alcoholic Beverage License clocks in at a mere 13 pages, the alleged brevity hides detailed information and time consuming documentation required.
While most information required in the Application is your standard name, address, type of license (restaurant, hotel, package store, etc.) information, a closer look reveals a great deal more is needed than what initially meets the eye. For instance, if you intend to hold the license in the name of your LLC then all Members of the LLC must fill out Personal Information forms, including but not limited to the CORI forms described by the ABCC as “additional steps to streamline the retail license approval process.” In addition, each Member’s interests in other licenses in the Commonwealth (type, location, etc.) must also be included. Had those Members previously held interests in liquor licenses that no longer exist, then information concerning those licenses must be laid out as well, with the added drop box of “reason for termination.” Imagine an LLC with 10 Members, all of whom are active investors in restaurants or hotels in the Commonwealth, and it becomes easy to envision the depths of the rabbit hole. A lawyer brings added value to a client when a client works with counsel who has knowledge of the corporate structure, or better yet, familiarity with members or shareholders and ability to contact them directly and explain the process and forms.
Though it may take days or even weeks to gather the relevant information and the forms signed by Members of the LLC, the work doesn’t stop there. If you intend to lease the premises where the license is to be kept, then information from your lease such as rent, term and options to extend must also be included in the application. Add in the likely possibility, at least in the case of restaurant or hotel licenses, that a portion of the proceeds from alcohol sales are included in percentage rent calculations, and suddenly your landlord has forms to fill out and sign; adding yet another layer of time and effort. Ideally the applicant is working with experienced counsel who has firsthand knowledge of the transaction, which will aid tremendously in keeping time and costs to a minimum.
After including details concerning costs associated with the license transaction and explanations of the form(s) and source(s) of funding for the costs associated with the licensing, what you are left with is a comprehensive (if not encyclopedic) Application that, now completed, must still be submitted for review and approval. Underscoring the time and energy expended during the Application process is the very real (and very likely) possibility that an Application that is considered incomplete, or one that otherwise raises questions, will be delayed and sent back to the applicant for additional information. These delays can wreak havoc on a restaurant or hotel opening, adding further costs and frustration to the applicant not well girded for the process by experienced counsel.
Though the experience is daunting for some and inordinately time consuming and expensive for others, a smooth application process is possible with the assistance of good counsel and a clear understanding that the ABCC liquor license application is a gauntlet all its own, best navigated by those who have gone through the process before, and lived to tell their tale.
Seth Malamut is an associate in the firm's Real Estate Department.
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