Restaurant Licensees operating like bars or clubs can lose their liquor license

There have been several recent disciplinary cases where licensees holding a restaurant license have been held in violation for operating as a bar or night club. A bar or night club requires a tavern license. How do you know the difference?

Restaurants receive more than half of their revenue from the sale of food.  Typically a restaurant receives 80% of its revenue from food and 20% from its bar sales.  Restaurants have a chef (or cook) at all times and offer a variety of food items that are more than simple salads, sandwiches and snacks. Patrons are seated at tables to dine and usually order and receive service from wait staff. Music is limited to background music or other live music for atmosphere or ambience.

A club, on the other hand, earns more of its revenue from the sale of alcoholic beverages and generally offers live, DJ or Karaoke music or stage entertainment and/or patron dancing. A bar also focuses on the sale of alcohol more than food and typically has snack type food or sandwiches. Patrons tend to stand or be seated at the bar and the focus is a social interaction rather than dining.

There is no bright line test to determine if a premise will be considered a tavern or restaurant. The SLA explains that it will use common sense to make the determination. The primary factors they consider are described above.

Why does it matter? Taverns are under greater scrutiny by the Liquor Authority and police. Additionally, the associated license fees differ.

It is important to regularly review the method of operation portion of your liquor license application. If the Liquor Authority learns that you are operating differently than your approved method of operation, you will probably be fined. If you would like to change anything about your method of operation, you will need to file a petition to have the new method of operation approved by the Liquor Authority. You cannot begin operating under the new method until after Liquor Authority approval is granted.  Processing takes 1-2 months but there is no filing fee for the petition.