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New Hurdle for Tennessee ABC Liquor Licenses

The Tennessee Alcoholic Beverage Commission recently introduced a new requirement for restaurants applying for liquor licenses. Applicants must submit a business plan that details projected sales of food, alcohol and other income.

Limited service restaurants, the legal euphemism for bars in Tennessee, are accustomed to filing an affidavit specifying the percentage of alcoholic beverage sales compared to food, beer and other sales. Limited service license fees are based on the percentage of food sales and the affidavit essentially sets the amount of the license fee.

Because of a new law, ABC Assistant Director Keith Bell is requiring all restaurant applicants, including restaurants that serve more than 50% food, file business plans before applications can be approved. The rule does not apply to other types of liquor-by-the-dinrk licenses, like hotels and caterers.

Fortunately, Mr. Bell is not looking for a full-blown business plan that would please a business school professor.

Based on our experience, the business plan needs to focus on facts specific to the percentages of food to liquor, beer and other income. Projected income with percentages are key.

Other facts to include are hours of food service (lunch and dinner, as opposed to just late night), number of food prep and service staff, or plans for bartenders preparing food, basic summary of the kitchen, number seats at traditional restaurant tables, how food will be marketed to patrons, and any other facts directly related to food sales.

Confidentiality of projected earnings is an issue that has not resolved. With the exception of social security numbers and other sensitive personal data, anything filed at the ABC becomes a public record.

We suggest folks follow Jimmy Buffet's advice: If life gives you limes, make margaritas.

New Kid in Town Lays Down the Law at Tennessee ABC

Things have been changing quite rapidly at the Tennessee Alcoholic Beverage Commission. 1970's Rock Kings the Eagles sum it up well:

Where you been lately? There's a new kid in town 
Everybody loves him, don't they? ...Everybody's talking 'bout the new kid in town.

Keith Bell was named ABC Assistant Director nearly a year ago. Mr. Bell and staff attorney Ginna Winfree are making waves in the Tennessee liquor-by-the-drink licensing world.

Several LBD industry members have seen an uptick in enforcement and the seriousness of penalties imposed by the ABC. The new kid in town appears to be telling the industry that he is going to make a point of cracking down on industry violations.

Keith Bell is laying down the proverbial law.

With ABC Director Danielle Elks expected to resign at the end of October, Mr. Bell is the heir apparent to the ABC throne.

Ms. Elks has served the ABC for over two decades. During Ms. Elks' reign as Director, the playing field has been mostly neutral. Rules and enforcement priorities have been occaisionally tough for industry, but relatively predictable. If you violate the law, you get an expensive fine to make you pay attention. If you fail to do your best to avoid violating the law in the future, you are looking at a suspension or revocation.

The rules have apparently changed.

The TABC has had more than its fair share of relatively high profile negative press in the past few years. Some say the ABC has been drug through the media mud. 

We suspect that the ABC Commissioners appointed by Governor Haslam have directed the TABC staff to clean up its act, regardless of whether media criticism was warranted.

We advise folks to avoid playing fast and loose with ABC laws and regs. If caught, penalties are likely to be much stiffer, including imposition of suspensions and revocations for more serious offenses like sales to minors, service to intoxicated patrons and failure to meet food service requirements.

What might have lead to an expensive fine in the past may lead to a notice of a hearing to revoke your liquor license. Expect to serve real suspensions of your license for serious violations.

The new kid in town is walking tall.

The good news is that Mr. Bell has a long career as an entrepreneur in the legal industry and seems to understand that LBD licensees are real business owners working to make a living. He gets it.

Kung Fu Fighting Not Good for Bar Business

Watch your bouncers. This is the lesson from a high-stakes lawsuit filed against a reputable downtown Nashville restaurant.

Rippy's Bar & Grill is defending a 4.5 million dollar lawsuit arising from allegations that bouncers violently choked a customer who was dining at the restaurant one afternoon during CMA Fest.  According to Rippy's attorney, the customer was "arrogant and aggressive." The Tennessean has more.

Bouncers should be trained to handle "arrogant and aggressive" patrons. According to the lawsuit, several witnesses called 911. One caller reported that: "There's a guy that's choking a guy out, and he's on the back staircase of Rippy's...he's trying to kill him." The lawsuit alleges that one of the bouncers is a martial arts Brazilian jiu-jitsu fighter.

Over the past couple of years, there have been several lawsuits brought against downtown and midtown bars over claims of aggressive bouncing. We suspect that most involve out of control customers. 

Regardless, bouncers should know how to detain "arrogant and aggressive" patrons; not teach them a lesson. Teaching a lesson can lead to an expensive lawsuit.

In Heaven There Is No Beer

Need a Metro Nashville beer permit in September? Better plan carefully. You may find that real life mirrors the afterlife.

There may be no beer in heaven, but a bar without beer in Tennessee is not bound for eternity.

The beer board is moving to the Third Floor of the Howard School complex starting on Friday September 14, 2012. According to official notices, the beer board offices will be closed from Friday until Tuesday September 18.

We have been told, reminded and admonished that no one - absolutely no one - will be able to get a temporary or permanent beer permit until the offices reopen on Tuesday September 18. No one. No, not even you.

Office moves are often fraught with difficulty, and we advise folks to count on the possibility of delays with the beer board reopening date.

If you need a beer permit the week of September 17, we encourage you to obtain the permit on Thursday September 13. The beer board meets that day at 11:30.

More Breweries for Nashville?

Pending Metro Nashville legislation will greatly increase potential locations for breweries in Music City. Currently, breweries must be on land zoned for industrial use.

Industrial areas are usually located in remote areas, away from retail centers and houses. Who wants a horse rendering plant making glue near their shop or house?

But breweries are different. Although classified as an industrial use, breweries like Yazoo and Jackalope work well in retail commercial districts. Part of the Gulch is zoned for manufacturing, but popular commercial areas in East Nashville and Hillsboro Village prohibit breweries, because they are classified as industrial plants - as if they made glue from horses.

Fat Bottom Brewery ran into this issue when working on its new brewery in the old Fluffo Mattress site on Gallatin Pike. Scott Davis, the local Metro council member, introduced legislation to fix the problem for future brewers.

Davis' legislation allows "nano-breweries" that produce less than 1,250 barrels of beer per month to be located in most commercial zones. Davis' legislation has some simple rules that require breweries to be sensitive to neighborhood concerns. The proposed ordinance and the specific restrictions are at this link.

We think the nano brewery legislation is great for Nashville and its budding suds-stewing scene. If you support local beer brewing in Nashville, e-mail your local council member. You can find your local council member on the map at this link. Click on the e-mail link and let our representatives know Nashville loves beer.

Boom Boom, Out Go the Lights for Tennessee Tax Man

The Tennessee Department of Revenue was closed this afternoon, September 4, 2012. We understand that power suddenly failed, following a loud boom in the basement of the Andrew Jackson Building.

Reminds us of the Pat Travers Band rocking one hit wonder: "Boom Boom, Out Go the Lights."

Time to rejoice?

Not if you are a restaurant or bar owner trying to obtain tax clearance for a new or renewed Tennessee liquor license. The ABC will not be able to clear licenses until power is restored and tax officials catch up. Expect delays.

We hear that Revenue offices will likely be closed Wednesday. There was no estimate for when power would be restored.

Just another day in paradise for licensing in Tennessee.

Let us know how this affects your business by leaving comments so we can keep everyone posted.