When opening a bar or restaurant that serves alcohol, you need to know what licenses to acquire before opening. If you buy a franchise or open your place, you still need specific licenses and permits.
Before opening your bar, let’s look at what licenses and permits you will need.
What Licenses Are Needed to Open a Bar?
As a liquor-serving establishment, you must obtain seven licenses before serving your customers. Some apply specifically to food and alcohol, and others are general business-type permits. These licenses may vary depending on your state and local laws.
The typical licenses that you need to open a bar consist of the following:
1. Business License
You must obtain a business license when opening a legal business in the U.S. Since your business will serve alcohol, you must contact the Alcohol and Tobacco Tax and Trade Bureau (TTB) to apply for your business license. You must have this license before you open your doors. Be sure to keep track of annual renewals and file them on time.
2. Certificate of Occupancy
Once you have chosen the perfect location for your bar, you must have the local government inspector come in and ensure that the space is safe for patrons. Once your site has been approved, you will be issued a certificate of occupancy allowing you to set up shop. Depending on your state, you can expect to pay between $100-$200 for the permit.
3. Liquor License
Anyone who legally sells alcohol in the United States needs a liquor license. There are various types, for example, a beer and wine license for places like grocery stores that only sell beer and wine, no hard liquor. Liquor licenses are operated by the state Alcohol Beverage Control Board (ABC). You must contact the office and apply for the type of liquor license you need. These licenses can take a few months to acquire, so apply early. Liquor license fees vary widely depending on the location.
4. Food Service License
Anyone serving food to customers must obtain a food service license. You can get a license through your local health department. The cost is $100-$1000.
5. Food Handler’s License
You must also acquire a food handler’s license before your employees can make, handle, and serve food. You can acquire this license through your local health department. They may require your employees to undergo authorized training.
6. Seller’s Permit/Sales Tax License
A seller’s permit is for sales tax purposes. You must register with the state and pay sales tax on the food and beverages you serve. You can contact your state government to obtain the application form and get your license.
7. Resale Permit
Another permit you will need is a resale permit that allows you to purchase wholesale products without paying the sales tax. The tax is passed on to the customer at purchase because these items are used to make food and drinks. You then collect the tax through payments and submit them with your taxes.
What Additional Licenses Do You Need to Open a Bar?
When thinking about the licenses needed to open a bar, you should also consider the following:
Federal EIN (Employer Identification Number)
Before hiring any employees, you must obtain a federal EIN from the U.S. government. Your EIN is used to file tax forms. The Internal Revenue Service (IRS) issues EINs, which are good for life. You don’t have to worry about renewing them every year. The best news is it’s free.
Local Signage Permit
You will want to put signs on or near the building to attract business. You will need to contact your local government to find out about the laws regarding signage and pay the fee for a signage license. Usually, sign permits cost between $20-$50 per sign.
If you plan on playing music in your bar, you must also obtain a music license. The owner copyrights songs, and you must pay a fee to play them publicly. You could be subject to steep fines (up to $150,000) if you do not have a music license. You can obtain this license through Performing Rights Organizations (PROs) such as Broadcast Music Inc (BMI), The American Society of Composers, Authors, and Publishers (ASCAP), or The Society of European Stage Authors and Composers (SESAC). You can also obtain these rights through a streaming music service. Fees generally cost about $500 per year.
Live Entertainment License
You will also need a live entertainment license if you want live entertainment performances in your bar. It includes broadcasting the Super Bowl in your bar on multiple TVs. There are various regulations and restrictions. Contact your state licensing authority to obtain your permit before hosting live entertainment events.
What Licenses Do You Need to Open a Bar if it is a Franchise?
If you choose to invest in a franchise rather than open your bar, you will be subject to the same permits and licenses. The best option is to check with the parent company; they can help direct you on what you need and how to obtain it.
Contact us today to learn more about franchising with Bohemian Bull Tavern and Beer Garden