I’m considering buying a small restaurant in Framingham, MA. It seats no more than 30 people and has a small bar that seats 6. I’d like to be sure I can serve alcoholic beverages (beer & wine). What are the eligibility requirements and what do I need to consider to obtain the proper liquor license in Framingham?
The first consideration in the purchase of a restaurant that has a small seating capacity is whether the cost of obtaining a liquor license makes financial sense because the demand for alcoholic beverage licenses in most communities is much greater than the supply. In many cities and towns, the starting purchase price starts at $100,000 and can be much higher, depending upon the location.
Most alcoholic beverage licenses are obtained through a transfer of an existing license from the current owner of the license (the seller) to the new owner (the buyer). There is a two step approval process. The first is by the city or town’s alcoholic beverage licensing commission or selectmen. The application for the license asks how the buyer will obtain financing, which may be done through a lender, such as a bank, or sometimes through the seller. The buyer will have to demonstrate that he or she has the financial capacity to sustain the business. The buyer will also have to describe the entity which is going to hold the license. It is preferable to create a corporation to shield the buyer from personal liability. In Massachusetts, there are several options to choose from, such as a C corporation, Subchapter S, or LLC. The decision on corporate entity should be made in consultation with the buyer’s certified public accountant who can advise on the tax and accounting consequences of the most suitable corporate entity.
The buyer must have adequate insurance. This includes general liability insurance, workers’ compensation, and liquor liability insurance.
The personal background of the buyer is important. He or she cannot have a criminal record; the manager must be a citizen of the United States. Careful consideration of the qualifications of the other corporate officers and board of directors is critical.
Once the city or town’s local licensing commission has approved of the buyer’s license application, that decision must also be approved by the Massachusetts Alcoholic Beverage Control Commission (ABCC) which will do a thorough background check of the buyer before approval is finalized.
The process of obtaining and getting approval for an alcoholic beverage license for a restaurant, package store, bar, or club, is a complicated one. It is important to retain legal counsel who can guide buyers and sellers through the process successfully.
Attorney David Rubin is a Greater Boston liquor licensing attorney and provides representation to clients in communities such as Boston, Boston MetroWest, Framingham, Dedham, Marlborough, Natick, Needham, Newton, Waltham and Worcester.
David L. Rubin, Attorney at Law
Greater Boston Liquor Licensing Attorney
929 Worcester Road
Framingham, MA 01701
Telephone: (508) 875-9797
Boston: (617) 451-0707
Fax: (508) 820-1560
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