Liquor Licensing For Hotel & Restaurant Acquisitions

You are the General Counsel or the outside counsel to a hotel or restaurant brand. Your client informs you that the company intends to purchase multiple units of additional properties in several different states. Your head spins, full of questions. Will it be an asset sale or stock purchase? Will we retain the employees? Will we rebrand the property to our own brand, keep the existing brand, or designate a third brand?

Large and even medium scale acquisitions in the hospitality industry trigger these important legal questions and more. Sometimes, however, the dealmakers overlook or delay one critical area: alcohol service! How will we make sure the hotel or restaurant will be able to serve alcohol on Day One?

Bartender pouring cocktails. Liquor licensing.

Careful planning and precise timing are critical. If your transaction involves properties in multiple jurisdictions, you will need to understand the existing licensing structure of each property, and the requirements and procedures for transferring the license to a new owner, noting that the procedures for doing this will not be the same in every jurisdiction. The timelines in each location, dictated by the governing licensing authorities will be different; therefore, it is essential that you work backwards from your proposed closing date to guarantee yourself enough time for licensing. Here are some initial questions to consider:

  • Does the jurisdiction require licensing on more than one level (state/local)?
  • Does the jurisdiction allow the transfer of a license from the seller, or will new licenses be required?
  • Does the jurisdiction’s licensing process include prerequisites with additional internal deadlines which must be adhered to (e.g., publication requirements)?
  • Does the jurisdiction allow a procedure for temporary licensing if permanent licensing cannot be completed by the closing date?
  • Does the jurisdiction allow a “master file” when there are multiple properties licensed to one entity inside the same jurisdiction?

The answers to these questions will provide you with a rough timeline to work with. The next thing you need to be prepared for, however, is the inevitable. Something will go wrong and you will need to adjust your timeline. That means that is even more important for you to build in extra time. For example:

  • The kitchen failed the health inspection.
  • The license cannot transfer because the seller has sales tax due and unpaid.
  • The officers of your licensed entity have all gone overseas for vacation and cannot be fingerprinted.

Wait a minute….the officers need to be fingerprinted? What officers?

Liquor license applications in all states require some level of fingerprinting of the officers disclosed on the liquor license application, as well as disclosure of personal information like physical description (height, weight, eye color), bank account references, and social security numbers. Similar information may be required for spouses of the disclosed individuals. There are several reasons that government agencies request this information, but the most important one is that the state has an interest in knowing that the individuals running a regulated business are who they say they are. The number of individuals to be disclosed will depend on the corporate structure of the applicant, and, depending on the nature of the transaction and the enforcement policies of the licensing jurisdiction, the officers of parent companies or holding companies related to the applicant may also need to be disclosed. It will be important for you to understand at the beginning of the licensing process how many individuals need to be fingerprinted and submit personal questionnaires.

Timing is paramount when acquiring any business with a liquor license. These introductory tips apply in any jurisdiction; however, note that each licensing authority has different rules and communication with those government agencies about your transaction so that you understand the expectations will be key to a successful and timely transaction.

About GrayRobinson
GrayRobinson is a full-service corporate law firm with 300 attorneys and consultants throughout 14 offices across Florida. Our attorneys provide legal services for Fortune 500 companies, emerging businesses, lending institutions, local and state governments, developers, entrepreneurs and individuals across Florida, the nation and the world.

At GrayRobinson we offer not only breadth across a great many legal areas, but also depth and proficiency in each one. We have invented a better brand of law firm, counting creativity as a hallmark characteristic and insisting on ingenuity and innovation. At GrayRobinson, there is no such thing as “business as usual.” We are one of Florida’s fastest-growing law firms and are proud to be at the forefront of emerging legal issues.

Elizabeth DeConti

Elizabeth is a shareholder in the Gray Robinson Tampa office and is a member of the firm's Alcohol Beverage and Food Team. Prior to joining GrayRobinson, she was a partner with the Tampa office of Holland & Knight and a judicial clerk for the Honorable Antoinette L. Dupont, chief judge of the Connecticut Appellate Court. She earned her bachelor's cum laude and with distinction in renaissance studies from Yale University in 1993 and then received her juris doctor cum laude in 1996 from the University of Miami School of Law, where she was a Harvey T. Reid Scholar. Awarded the highest rating assigned by Martindale-Hubbell Law Directory "AV", she focuses her practice on litigation and compliance matters related to the rules, regulation and business practices that govern the marketing, sale and consumption of malt beverages, wine, distilled spirits and other regulated products in the alcohol and food industry. Elizabeth's trial experience includes commercial, franchise, intellectual property and Americans with Disabilities Act cases litigated on behalf of major breweries, alcohol suppliers, wholesalers, retailers and other members of the hospitality industry in state and federal courts and before administrative agencies throughout the United States. In addition to her court experience, she represents many clients in alternative dispute resolution. She also advises clients on issues pertaining to trade regulation and marketing practices in the food and beverage industry and concentrates on regulatory compliance as well as advertising and promotional law. Elizabeth also drafts contracts related to advertising, distribution, importation and related issues associated with the food and beverage industry. In addition, she is fluent in Italian and French and advises European clients on international and domestic matters. Elizabeth's international experience has included the negotiation, sale and purchase of Italian wineries, liaising with Italian law firms on litigation matters pending in Italy and the United States; representation of several German breweries; and advising and counseling foreign entities seeking to export products from Western Europe into the U.S. - See more at: