Podcast Summary: Restaurant Strategy - "How to Procure a Liquor License and Increase Profits"

Episode Details

• Title: How to Procure a Liquor License and Increase Profits
• Host: Chip Klose
• Guest: Jason Koh, President and CEO of AAA Liquor License Consulting
• Release Date: May 26, 2025

Introduction to Episode

In this episode of Restaurant Strategy, host Chip Klose delves into a crucial aspect of restaurant profitability: securing a liquor license. Appreciating the complexities involved in obtaining such licenses across different states, Chip welcomes expert Jason Koh to provide invaluable insights and guidance for restaurant owners aiming to enhance their revenue through beverage sales.

Guest Background: Jason Koh

Jason Koh brings a wealth of experience to the table. Starting his journey in the liquor license industry at the tender age of 14, Jason has dedicated over a decade to helping restaurant owners navigate the intricate landscape of alcohol licensing. His passion stems from assisting immigrant families and small business owners in achieving the American dream by ensuring they have the necessary licenses to serve alcohol, a significant revenue stream for many establishments.

“I look at myself as your business partner because obtaining a liquor license is not just a one-time task; it could span months or even years.” (04:50)

The Importance of Liquor Licenses for Restaurant Profitability

Liquor licenses are pivotal for boosting a restaurant's profitability. Jason emphasizes that the ability to serve alcohol can significantly impact a restaurant's revenue, as beverages often carry higher markups compared to food items. However, the process to acquire these licenses is fraught with challenges due to varying state laws and local regulations.

“Alcohol is very much imperative to particular businesses; without it, especially in competitive areas, you could be losing customers to nearby establishments that do offer alcohol.” (09:39)

Step-by-Step Process to Obtain a Liquor License

Jason outlines a structured process that restaurant owners should follow to secure a liquor license:

1. Location Selection:

   • Zoning Verification: Ensure the chosen location is zoned appropriately for serving alcohol.
   • Assess Foot Traffic: The success of alcohol sales heavily relies on the restaurant's foot traffic and location dynamics.

2. Neighborhood Council Approval:

   • Engage with local neighborhood councils or jurisdictions to secure their support, which is often a prerequisite for permit applications.

3. City Permitting:

   • Navigate any additional permits required by the city, ensuring all municipal guidelines are met.

4. State Application:

   • Submit the final application to the state's Alcohol Beverage Control (ABC) board, following all required procedures and documentation.

5. Final Approvals:

   • Manage any back-and-forth between city and state authorities to ensure all approvals are synchronized.

“Once you have the blessings from the neighborhood council and city, you can proceed to handle the ABC Alcohol Beverage Control at the state level.” (16:01)

Understanding Different Types of Licenses

Jason clarifies the distinction between various liquor licenses, which is often a source of confusion among restaurant owners:

• Beer and Wine Only License:

  • Permits the sale of beer and wine exclusively.
  • Suitable for establishments where alcohol is a supplementary offering rather than a primary revenue source.

• Full Liquor License:

  • Includes the authorization to serve all types of alcoholic beverages, including spirits like vodka, whiskey, and tequila.
  • More expensive and often subject to state-specific quotas, making them harder to obtain in certain areas.

“When you get a full liquor license, it includes beer, wine, and all spirits. A beer and wine license restricts you from serving hard liquors.” (26:04)

State-Specific Challenges and Nuances

The process of obtaining a liquor license varies significantly across states, each with its own set of rules and challenges:

• Strict States:

  • Examples: New York, California, Massachusetts.
  • Challenges: High competition, quota systems, and stringent local regulations make obtaining licenses more difficult.

• Less Stringent States:

  • Examples: Texas, Arizona.
  • Approach: Easier access to licenses, with states often providing direct assistance through their ABC boards.

“States like California, New York, Massachusetts, Florida, Arizona, and Pennsylvania are tougher markets for obtaining liquor licenses due to their strict regulations.” (20:11)

When to Engage a Liquor License Consultant

Jason advocates for early engagement with a liquor license consultant, especially for first-time restaurant owners. Bringing in an expert like himself early in the planning process can save significant time, money, and potential setbacks.

“It's always better to hire a consultant early on rather than spending money on a lease for a location that ultimately cannot accommodate an alcohol license.” (15:21)

For experienced restaurateurs who are familiar with zoning but struggle with the application process in complex states, consulting services remain invaluable to ensure all documentation and approvals are correctly handled.

Common Mistakes and Their Impacts

One of the primary pitfalls highlighted is the failure to verify zoning and licensing eligibility before committing to a location. Such oversights can result in wasted investments and delays in opening.

“Signing a lease without confirming zoning for an alcohol license can lead to significant financial loss if the location is ultimately ineligible.” (12:09)

Additionally, incomplete or incorrect application forms can cause delays or rejections, hindering a restaurant's opening plans.

“Missing a single form or detail in your liquor license application can delay your grand opening, sometimes indefinitely.” (23:22)

Insights and Advice from Jason Koh

Jason emphasizes the importance of perseverance and patience in the liquor licensing process. Securing a license does not automatically translate to increased profits; it must be coupled with effective branding, marketing, and excellent service to attract and retain customers.

“Having a liquor license is just one piece of the puzzle. To truly see increased profits, you need to ensure that your marketing and customer service strategies are on point.” (30:05)

He also advises restaurateurs to:

• Assess Their Needs: Determine whether a beer and wine license suffices or if a full liquor license is necessary based on the restaurant’s concept and target audience.

• Understand Local Regulations: Each locality may have unique requirements, and understanding these can prevent costly mistakes.

• Leverage Expertise: Utilizing professional consulting services can streamline the application process and mitigate potential issues.

Conclusion and Contact Information

Chip Klose wraps up the episode by reaffirming the critical role of liquor licenses in restaurant success and encourages listeners to connect with Jason Koh for expert assistance.

Contact Jason Koh:

• Website: AAALiquorLicenses.com
• Phone: 323-510-7831
• Email: Jason@AAALiquorLicenses.com
• Social Media: Follow on Instagram and Facebook @AAALiquorLicenses

“If you need someone in your corner to help navigate the complexities of obtaining a liquor license, reach out to me at AAA Liquor Licenses. I'm here to help you ensure your restaurant's success.” (31:56)

Final Thoughts

This episode serves as a comprehensive guide for restaurateurs aiming to enhance their profitability through alcohol sales. With Jason Koh's expert advice, listeners gain a clear understanding of the complexities involved in securing a liquor license and the strategic steps necessary to overcome these challenges. By prioritizing early consultation and meticulous planning, restaurant owners can unlock significant revenue opportunities and ensure a smooth path to success.