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horn4life

Adding Liquor license to existing beer and wine permit? Possible restaurant purchase?

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I may have an opportunity to buy into a business near my house that currently has a wine and beer permit, but no liquor license.  The current owners have sort of aged and burnt out and the main reason I am looking is that I think with a liquor license, and some menu changes I could easily expand the monthly sales. There are a lot of other variables, in that basically I would be buying out the shares of their corporation, but the addition of the liquor license is the key component for me.

I used to be in the bar business and have helped a few restaurants expand their footprints with some good simple advice they heeded.  i have also seen folks go right down the rat hole,  because they thought they were there to party rather than make money.  I have a couple of smart folks i can get solid input (criticism) from, that I think will help reduce my risk. 

I did some research on the costs but I am simply unfamiliar in how the transfer of a wine/beer permit would work if I was buying a corporation? Much less the process of adding liquor to a wine and beer permit? My assumption is that it would be easier and cheaper to add the liquor to the existing permit, before I buy out all of corporation.  I would NOT buy out all the partners at once as want some continuity in transition. Ultimately I would be the sole owner, and likely bring in my own operating partner. 

Anyone, anyone know anything about liquor licenses, bar/restaurant purchases, and the permitting process?  

Thanks in advance!

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Where is this?  If it's in Travis County/Austin...I can recommend the guy that got a full bar permit built across the street from the School for the Deaf.  He's that good.  And then to drive the point home that they fucked with the wrong lawyer, he's the one that made sure the liquor license for the Torchy's on South Congress will never see the light of day.  

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Do you have to buy shares in the corp? An asset purchase may be the way to go. If it has to be a purchase of the equity interest you need to diligence the hell out of it to ensure you know what you are buying and the extent of the liabilities that go with the corp. And try to get surviving reps and warranties in the event misrepresentations are made. Though it may be difficult to collect if you win the lawsuit. I’m no help on the permit issue.

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There is no way in hell that I would buy the shares of an existing Corp in that business. Do an asset purchase and limit your exposure. As far as the permit, go to City Hall and talk with them about the process and the pitfalls. Typically, if you have no criminal record and a decent background check and there are no location restrictions, it should not be that difficult a process and will just require a few checks. However, that is local to my area and may be completely different where you are.

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LOBO- yes Austin!

So the concern on the shares of the existing corp are risky because of potential hidden liabilities, like lawsuits that might be filed, or non-disclosed liabilities, correct?  Just trying to clarify.

One of the main reasons I was looking at buying out the corporation was to avoid having to bring up the bathrooms to ADA code.  I don't know if I can avoid this expense with an asset purchase? Or can I? My understanding was a straight purchase removed all the grandfathered code requirements.  Am I wrong here? If I have to bring everything up to current code I can't afford really to do what I want without bringing in another partner.  The place is making ends meet, but it's not thriving, and there is a lot of room to move a lot more folks though the place each day.  

The other fly in the ointment is the landlord. At first they did not want to renew the lease, but they also realized that the concerns regarding ADA code made it wiser to let the current tenant go month to month.  Simply as they did not want to take on the expense of a new buildout. Or at least that's my current understanding. I would need to have at least a pre-negotiated lease extension option to really go all in, so there are a lot of moving parts.  

Thanks again guys for the input!!!!

 

 

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Prior to the turn of the past century, my brother’s business partner put $1,200 in a plain envelope and handed it directly to a local state senator, who in turn made a phone call to get their stalled liquor license appoved the next day.

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13 minutes ago, horn4life said:

LOBO- yes Austin!

So the concern on the shares of the existing corp are risky because of potential hidden liabilities, like lawsuits that might be filed, or non-disclosed liabilities, correct?  Just trying to clarify.

One of the main reasons I was looking at buying out the corporation was to avoid having to bring up the bathrooms to ADA code.  I don't know if I can avoid this expense with an asset purchase? Or can I? My understanding was a straight purchase removed all the grandfathered code requirements.  Am I wrong here? If I have to bring everything up to current code I can't afford really to do what I want without bringing in another partner.  The place is making ends meet, but it's not thriving, and there is a lot of room to move a lot more folks though the place each day.  

The other fly in the ointment is the landlord. At first they did not want to renew the lease, but they also realized that the concerns regarding ADA code made it wiser to let the current tenant go month to month.  Simply as they did not want to take on the expense of a new buildout. Or at least that's my current understanding. I would need to have at least a pre-negotiated lease extension option to really go all in, so there are a lot of moving parts.  

Thanks again guys for the input!!!!

 

 

Your first paragraph is correct for liability purposes. There is no effective transaction at the corporate level so all known/unknown liabilities are still there. From a tax standpoint you get no tax benefit for a stock transaction and just have basis in your shares. In an asset sale you can depreciate/amortize what you pay.

On the second paragraph I assume ADA will only kick in if you pull permits for renovations. There are certain aspects that the building would be grandfathered on even in a permit situation. You would need to talk to a contractor and attorney to see what exposure you have, but I Think if you’re just going to operate as is the structure of the transaction would not matter.

On the 3rd paragraph, if they are month to month then you need to make the deal contingent on executing a lease you are comfortable with. Food service establishments have problems if they have to relocate typically. People are tied to specific locations.

Outside of all that, talk with someone about structure before you sign anything. I can’t see where a corporate structure would be better than an LLC structure but some of that is location dependent.

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Seems like the lease is the biggest issue. If you get booted is that place going to work somewhere else? Assuming you can afford a new place. Austin is changing quick these days.

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