Buying a bar in Florida

A bar makes its money pouring drinks, and drinks are far more profitable than plates of food. Money comes in nightly, by card and in cash, heaviest on weekends, game days, holidays and, in much of Florida, the tourist and winter seasons. Many bars add a kitchen, live music, trivia, pool tables or private parties to fill the slower nights. Almost nothing is under contract. What keeps a bar going is a crowd of regulars, a good bar manager and a location people come back to out of habit.

The team is usually small: bartenders, barbacks, a manager, door staff on busy nights, and cooks if there's food. Bartenders handle cash and inventory all shift, so keeping tabs on both matters more here than in most small businesses. The single biggest asset is often the alcohol license. Florida caps the number of licenses to serve liquor by county population, and in many counties one sells for real money on its own. Along with it you'd be buying a lease, the build-out (bar, fixtures and finishes), the draft and sound systems, and a name.

• A liquor license (or the right license for what the bar serves) in good standing, with no open cases against it.
• Pour cost (what the liquor in a drink costs, as a share of its price) and inventory checked at least weekly, with a point-of-sale system that ties every drink to a bartender.
• A bar manager who handles staff, schedules and ordering, so the business doesn't depend on the owner being there every night.
• Real weeknight business, not only Friday and Saturday.
• A lease that outlasts your loan, and zoning that allows the hours you need.
• Good relations with the neighbors and local police: few noise complaints and few late-night calls.
• No history of selling to minors.
• Food, events or entertainment that bring in more than one crowd.

Alcohol licenses come from the Division of Alcoholic Beverages and Tobacco at the Department of Business and Professional Regulation (DBPR). There's no cap on beer and wine licenses. A license to serve liquor is a quota license: each county gets one for every 7,500 residents (section 561.20). New ones are awarded by a state drawing (section 561.19); otherwise you buy one from a current holder. Moving a license to a new address takes the division's approval, and it must stay in the same county (section 561.33).

The license can pass to a genuine buyer of the business, but only with the division's approval, and a pending case against it can block the transfer (section 561.32). Owners and officers are fingerprinted and must meet section 561.15, which rules out, for example, anyone with a felony conviction in the past 10 years. The application also needs clearance from the Department of Revenue and a health approval: from DBPR's Division of Hotels and Restaurants if you serve food, otherwise the Department of Health. While the application is reviewed, you can usually operate on a temporary license, paying cash for your stock (section 561.331). Cities and counties set closing hours and decide where bars may operate (sections 562.14 and 562.45). Use a beverage law attorney.

• The license itself. Look it up on DBPR's site and confirm its type, county and any pending cases.
• Who holds it. The license may belong to a different company than the bar, or be pledged to a lender. Make sure it's part of the sale and free of liens.
• Purchases against sales. Compare what the bar buys from distributors with the sales it reports. A big gap can mean theft, free drinks or unreported cash.
• The seller's taxes. Buying more than half of a business or its assets can make you liable for the seller's unpaid state taxes (section 213.758). Get a certificate of compliance from the Department of Revenue first.
• Liability. Florida's dram shop law generally protects a bar from liability for what a customer of legal drinking age does after drinking (section 768.125). The exceptions: willfully serving someone under 21, or knowingly serving someone habitually addicted to alcohol. Get insurance quotes early.
• Staff training. Under Florida's Responsible Vendor Act, a bar that qualifies generally keeps its license if a trained employee sells to someone under 21 without the owner's knowledge (sections 561.705 and 561.706). Ask whether this bar qualifies.

• How long have your bar manager and lead bartenders been with you?
• How do you keep track of pour cost and inventory, and how often do you count?
• Is the liquor license in the name of the company I'd be buying, and has it ever had a violation?
• Which nights carry the week, and what have you tried on the slow ones?
• How do you get along with the neighbors and the local police?
• What do you pay for liquor liability insurance, and has the bar ever had a claim?
• How much time is left on the lease, and what hours are you allowed to stay open?