Most people, at some point in their lives, consider the thought of setting up their own bar. But only a handful actually go for it. This is because while the idea of owning your own bar sounds exciting, it comes with a varied set of challenges, which, after being considered, seems too much of a headache. But the ones who are extremely passionate about owning and operating their own bar, approach the challenges with great gusto. Some of the challenges are:-
- Long work hours
- Expensive to set up
- Long list of licenses to be obtained
- Compliance with multiple laws
- Sizeable Overheads
- Ideal location
Having said all this, if the establishment is set up in an attractive location with ample parking, one can sit back and relax, watch the crowds walk in and make themselves comfortable. If all the boxes are ticked from the point of view of the customer, the profits will start to flood in courtesy of the obvious high demand, as pubs and bars are a great place to socialise and unwind.
Bar Business Models – Types
There are various types of bars that can be set up. The type of bar to be set up is dependent on factors such as capital investment available, the kind of ambience that the owner is going for, the skills of the staff, etc. to name a few.
A lounge is an upscale bar which is extremely well furnished with comfortable seating arrangements and often prices its drinks at a higher rate.
- Tapas bar
A Tapas bar is one where, along with drinks, there are light snacks and appetisers served as well.
Pub is short for Public House. It is a place which serves alcohol and food, on occasion, where people generally meet and socialise.
- Sports bar
A sports bar is one where sports matches are televised continuously, and alcoholic beverages are served as well.
Nightclubs, aside from serving alcohol and food, offer a variety in terms of entertainment – comedy act, music, dancing, and generally operate from the late evenings and stay open until the wee hours of the morning.
Classes of Liquor Licenses
- Beer and Wine License
This license allows the holder to sell only soft and mild liquors, mainly being beers and wines. It does not permit the holder to sell any hard liquor whatsoever.
- Brewpub Liquor License
This license permits the holder to brew/manufacture their own wine and beer.
- Tavern Liquor License
Businesses whose profits up to at least 50% are a result of alcohol sales despite offering food may be granted a Tavern Liquor License.
- Restaurant Liquor License
Termed as an “All Liquor License”, this is applicable to all those restaurants that wish to serve alcohol on their premises aside the main business is food items. The sale of liquor must not exceed 40% of the total business sales.
Types of Liquor Licenses
The holder of this license is granted the permit for the wholesale supply of Indian liquor to other license holders.
Hotels that have the star classification and have obtained the necessary approval of the Tourism Department will be granted the L3 license. The L3 license permits the holder to serve foreign liquor to the residents who occupy the hotel rooms.
The L5 license, on the other hand, permits the holder to serve liquor in the exclusive bars and the restaurants that are within the premises of the hotel.
Clubs that are registered with the Registrar of Firms or with the Registrar of Co-operative Societies are permitted to serve foreign liquor to its members with the grant of this license.
This is the easiest license to obtain, in comparison with all the rest. The grant of this license allows the holder to serve liquor at any party or function, be it a marriage reception or any other event that is held at specific premises anywhere in the state.
The above list is not exhaustive. There are many more licenses, but out of them all, these are the most popular ones.
Applying For a License
Liquor laws and the rules and regulations pertaining to it differ from state to state. It is important that one is aware of the same that is applicable in that particular state where the business is intended to be set up. A visit to the local liquor establishments, the licensing authority offices as well as the State Excise Department will give the applicant a clear picture of the necessary plan of action to turn that dream into a reality.
Deciding what class of license is the next step. Based on the type of liquor the applicant intends to serve and also keeping in mind the state’s rules and regulations regarding liquor, the class of license will be decided.
- Application Form
The State Excise Department’s official website is to be accessed in order to download the application form. Once downloaded, all the relevant details must be filled in as necessary and then submitted along with the requisite fee to the authority concerned.
Based on the license being applied for, the supporting documents may vary. However, a few of them remain common to all types of licenses such as Identity proof, Address proof, NOC from the Municipal Corporation, NOC from the Fire Department, Photograph of the applicant, etc.
- Submission and Additional Information
On the submission of the application form and the supporting documents, the same will be verified by the licensing authority. The licensing authority also possesses the power to call for any additional information or documentation necessary, as the case may be.
- Public Notice
Once the application is found to be in order, a notice will be posted by the authority on the personal or business address of the applicant with the name and license details on display. Any objections to the same may be brought to the notice of the authority.
- Grant of License
Where there are no objections raised, the application shall be passed, and the license shall be granted. However, if there are any objections that are raised, the applicant may exercise his right to defend himself against such objections raised.
The license has a 1 year validity period and can be renewed annually by using the renewal application form, and the renewal fee has to be paid to the concerned authority.
Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.
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