What are the minimum requirements for eligibility to hold a license? Applicants must be US citizens or have permanent resident alien status. In some cases, citizens of countries with reciprocal trade agreements may apply. Applicants must be 21 or older. Applicants must not be convicted felons (unless they have a Certificate of Relief from Civil Disabilities). Applicants cannot be a police officer with arresting powers.

What are the permitted hours of operation for any given licensee? The hours of operation are regulated by county where the business is located, except for New York City which is regulated by statewide law.

What are the Notification to the Clerk/Community Board and Notification of Publication? On-premises license applicants must notify the appropriate government entity (village, town or city clerk or the appropriate community board if in NYC) as well as the designated newspaper of a pending license application at a particular location.

When filing my application, am I required to submit the entire fee? Yes.

Can I qualify for a temporary permit while I wait for my permanent license application to be processed? To qualify for a temporary permit, the following conditions must be satisfied:
There must be an active license in existence at the premises for which you are applying. The permit and $640.00 fee must be filed simultaneously with the Retail License Application. The temporary permit will expire 90 days from the date of issuance.

Are there any restrictions on the location of my premises? With certain exceptions, applicants for a liquor store license, wine store license and on-premises license cannot be within 200 feet of a school, church, synagogue or other place of worship.

In what instances will criminal convictions or administrative actions by the SLA disqualify my application? Individuals not eligible for a license include: (i) a person convicted of a felony in NYS, including felony DWI; (ii) a person convicted of a crime in another state or federal jurisdiction which would translate to a felony conviction if committed in NYS; (iii) a person convicted of misdemeanors under sections 230.20 or 230.40 of the NYS Penal Law or 1146 of the former NYS Penal Law; (iv) a revoked license will disqualify the licensee for a period of two years; if the revoked licensee was a corporation any officer or director may also be disqualified.

Note: If an executive pardon or a certificate of relief from disabilities is obtained, the convictions are no longer disqualifying in and of themselves, although all convictions may be considered as part of the total merit of the application.

How old must a person be to serve alcoholic beverages as a bartender or a waitress/waiter, etc.? A person must be at least 18 years of age to be employed in a retail premises “as a hostess, waitress, waiter or any other capacity where the duties of such person require or permit such person to sell, dispense or handle alcoholic beverages.” (Section 100.2-a - ABC Law)

How old must a person be to work as a cashier in a grocery store? Grocery store beer licensees may employ a person under 18 as a cashier “to record and receive payment for beer and wine product sales when in the presence of and under direct supervision of a person 18 years of age or over.” (Section 100.2-a(1)&(2) - ABC Law)

What must I do to conduct a teen night in my premises? At least 10 days prior to the event, you must notify the State Liquor Authority, in writing, advising them of the exact dates.

What is acceptable proof of age to purchase alcohol in New York? A valid driver’s license or non-driver identification card issued by the Commissioner of Motor Vehicles, the Federal Government, a State Government, Commonwealth, Possession or Territory of the United States or a Provincial Government of Canada; or a valid U.S. passport, or valid passport of any other country; or a valid military ID from the U.S. (Section 65-b.2(b) - ABC Law)

Can a restaurant deliver beer with a food order? Yes. The Authority has ruled that on-premises licensees may deliver beer in containers along with a food order provided that order is received in the licensed premises. An order received by the licensee in the licensed premises over the telephone (or by fax) complies with this ruling. The Authority’s ruling applies to beer only. The sale or delivery of wine or liquor for off-premises consumption by an on-premises licensee, other than a hotel off-premises (HOP) permittee, is a violation of the law.

If I have a felony conviction, can I work in a licensed premises? On-premises retail licenses (taverns, restaurants, night clubs, etc.) are prohibited from knowingly employing a person convicted of a New York State felony or other specified offenses. No person holding any license, other than a license to sell an alcoholic beverage for retail off-premises consumption, shall knowingly employ in connection with his business, any person who has been convicted of a felony, or any of the following offense listed in Section 102.2 of the ABC Law, who has not subsequent to such conviction received an executive pardon therefore removing any civil disabilities incurred thereby, a certificate of good conduct or other relief from disabilities provided by law, or the written approval of the State Liquor Authority permitting such employment. (See Section 102.2 - ABC Law). There are no prohibitions against a person convicted of a New York State translated felony, or certain specified offenses to be employed on any retail premises licensed for off-premises consumption (i.e. grocery stores, drug stores, or liquor stores).

Can a liquor store take returns of unwanted purchases? No, the State Liquor Authority does not approve the acceptance by a package store of the return of liquor or wine purchased by a customer in error. The State Liquor Authority authorizes package store licensees to accept the return of liquor or wine from a customer only if the merchandise is defective in quality. The bottle should be sealed and tagged with a statement as to the date and reason for its return and should be sent back to the manufacturer or wholesaler from whom it was purchased within a reasonable time.

Does a licensed premises have to take back empty bottle returns if they were not purchased from that premises? Yes, the “dealer” - the retailer - defined by the statute as a person who engages in the sale of beverage containers to a consumer for off-premises consumption in the state, must: accept at his place of business and from any redeemer, any empty beverage containers of the type sold by the dealer, regardless of whether or not the filled beverage container was originally sold by the dealer, and pay the redeemer the refund value of each such beverage container.

What can I do about a noisy or rowdy bar? Contact the police department having jurisdiction at the time the disturbance is occurring. You can also contact the New York State Liquor Authority by way of telephone, written complaint, e-mail, or personal visit to Zone Office. Complainant should make a written record of date, time and nature of disorder documenting specific problems with the licensed premises.

Can a customer bring in his or her own liquor/wine/beer into a licensed restaurant or bar? Yes, with the approval of the licensee and as long as the alcohol product is covered under the license in effect and the patron removes the unconsumed alcoholic beverage upon departing the licensed premises.

How old do you have to be to purchase non-alcoholic beverages? Non-alcoholic beverages do not come within the jurisdiction of the State Liquor Authority, except with respect to the so-called non-alcoholic wines which contain tiny percentages of alcohol. Such wines have been classified by the State Liquor Authority as standard wines that can only be sold in New York State for off-premises consumption by package store licensees. Non-alcoholic products may not be sold in this state by package stores. They may be sold by grocery and delicatessen stores, whether licensed or not. They may be served by on-premises licensees for consumption on the premises, and used by these licensees in the preparation of cocktails and other alcoholic drinks.

What are the provisions of Section 117-a of the ABC law? Unlimited Drink Offerings Prohibited. No licensee, acting individually or in conjunction with one or more licensees shall: offer, sell, serve or deliver to any person or persons an unlimited number of drinks during any set period of time for a fixed price; allow a person, agent, party organizer, or promoter, as such terms shall be defined by the Authority in rule and regulation to offer, sell, serve, or deliver to any person or persons unlimited number of drinks during any set period of time for a fixed price; or advertise, promote, or charge a price for drinks that in the judgment of the Authority creates an offering of alcoholic beverages in violation of the purposes and intent of this section, or which in the judgment of the Authority is an attempt to circumvent the intent, and purposes of this section, such as, but not limited to, offerings of free drinks, or multiple drinks for free or for the price of a single drink, or for a low initial price followed by a price increment per hour or other period of time, or for such a minor amount that in the judgment of the Authority the pricing would constitute an attempt to circumvent the intent and purposes of this section. With respect to an individual licensee, this section shall not apply to private functions not opened to the public, such as weddings, banquets, or receptions, or other similar functions, or to a package of food and beverages where the service of alcoholic beverages is incidental to the event or function. The State Liquor Authority has determined that 2 for 1, half price and Happy Hour specials whereby the price of a drink is not lower than one-half of the premise’s normal or regular price for the same drink does not constitute an attempt to circumvent, the intent and purpose of this statute.

Are football pools, dice games, sign up sheets illegal? Yes, Sections 106.6 and 105.22 of the ABC Law prohibit gambling in businesses licensed for consumption on and off the premises. This includes social, casual and professional gambling. Exceptions are the sale of lottery tickets when licensed by the Division of the Lottery and bingo or games of chance when authorized by the State Racing and Wagering Board.

Does the authority have tips or training for bartenders? Yes. A recent law enacted by Governor Pataki and the State Legislature provides a voluntary Alcohol Awareness Training Program for people licensed to sell alcoholic beverages in New York State and their employees. The Authority has established requirements for the curriculum of the program and approves schools and other entities to teach the program.

The Franchise Disclosure Document (“FDD”), formerly known as the Uniform Franchise Offering Circular (“UFOC”), is a legal document that franchisors must furnish to franchisees in accordance with the Franchise Rule (16 C.F.R. Part 436 which is regulated by the Federal Trade Commission).  Franchisors must furnish prospective franchisees with a FDD at least 14 calendar days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate in connection with the proposed franchise sale. The FDD contains material information about a franchise operation and is designed to help franchisees analyze the merits of a franchisor.

GENERAL RULE: Carefully review and negotiate the terms contained in the Franchise Disclosure Document prior to making any investment in a franchise.

All FDDs must contain the following categories:  

The Franchisor and Any Predecessors; Litigation History; Bankruptcy (i.e., any franchisees who may have filed); Listing of the Initial Franchise Fee and Other Initial Payments; Other Fees and Expenses; Statement of Franchisee’s Initial Investment; Obligations of Franchisee to Purchase or Lease from Designated Sources; Obligations of Franchisee to Purchase or Lease in Accordance with Specifications or from Authorized Suppliers; Financing Arrangements; Obligations of the Franchisor; Other Supervision, Assistance or Services; Exclusive/Designated Area of Territory; Trademarks, Service Marks, Trade Names, Logo types and Commercial Symbols; Patents and Copyrights; Obligations of the Franchisee to Participate in the Actual Operation of the Franchise Business; Restrictions on Goods and Services Offered by Franchisee; Renewal, Termination, Repurchase, Modification and Assignment of the Franchise Agreement and Related Information; Arrangements with Public Figures; Actual, Average, Projected or Forecasted Franchise Sales, Profits or Earnings; Information Regarding Franchises of the Franchisor; Financial Statements; and Acknowledgment of Receipt by Respective Franchisee.

Please note that I strongly urge you to retain the services of an experienced franchise attorney because although the Franchise Disclosure Document is required by law, no governing body reviews the document for accuracy and/or omissions of fact. 

For all employees hired on or after October 26, 2009, the New York State Department of Labor requires employers to notify the employee, in writing, of their pay day and pay rate. The new law states that the notice:
1. Must be in writing in compliance with New York Labor Law Section 195.1.
2. Must include the regular rate of pay, overtime rate and regular payday.
3. Must be provided on a form available from the NYS Department of Labor. Get the form here:  www.labor.state.ny.us/workerprotection/laborstandards/PDFs/LS_52_Hourly_Rate_Plus_Overtime.pdf
4. Must be given to new employees before they do any work.
5. Employer must receive a written acknowledgment that the employee has received the notice.
For more info, see the NYS Department of Labor circular at: www.labor.state.ny.us/workerprotection/laborstandards/PDFs/P705_E.pdf

You worked hard thinking of that perfect name for your restaurant, you spent a small fortune and countless hours marketing that name, and because of all your efforts that name has developed a great “buzz” and reputation in New York. . . and less than a year later another restaurant opens up in NYC with almost the same name as yours! To make matters worse, people are now going to that other restaurant thinking that it’s yours! What do you do?

If you had your restaurant’s name “trademarked,” you would call your attorney, he/she would draft and send a “cease and desist” letter to your competitor, and you would put that competitor out of business or at the very least force them to change the name of their restaurant.

GENERAL RULE: Trademark registration for the name of a restaurant or bar should be done for EVERY establishment so long as it can be done.

A trademark is any word, name or symbol adopted and used by a person (or that person has a bona fide intent to use that word, name or symbol and subsequently does use it) that identifies and distinguishes his or her goods or services from those manufactured and sold by others, and indicates the source of those goods or services. Names of restaurants, as long as they are not generic or merely descriptive, are terrific candidates for trademark registration. Additionally, a trademark is considered an asset which is not only valuable to a business but invaluable to a business if you are considering opening more than one establishment with the same name or ultimately licensing and/or franchising your concept.

When considering the execution of a commercial lease, all of the clauses must be given careful consideration. However, when taking a space for a bar or restaurant, there are certain lease clauses that warrant special attention. Following are some key clauses that are a crucial part of every restaurant/bar lease and, if negotiated properly, will allow the restaurateur/bar owner to increase the value of his/her establishment even prior to its opening and to operate with a greater peace of mind.

1) Duration of Lease: Generally, the longer the duration of the lease the better. Especially if given the ability to assign the lease with a minimum of Landlord intervention. Typically, I attempt to negotiate for a 15-year initial term with an annual increase of no more than 3%, and an option to renew the lease for another five-year term exercisable at the discretion of the restaurateur. Do your homework to determine the fair market rental value for the premise and don’t simply rely on your broker’s advice.

2) Assignment: Always attempt to retain the ability to assign the lease to a third party (e.g. in the event you want to, or are forced to sell your restaurant). The Landlord will insist that he must give his prior written consent for any assignment to be valid, but you must in turn, insist that his consent can not be unreasonably withheld, delayed or conditioned. Too many restaurateurs do not realize the importance of having the ability to assign their lease until they are at the point where they have decided to sell their restaurant. At that point, the sale of the restaurant will be thwarted because they will not have the ability to offer the lease to the potential purchaser and the Tenant will be forced to just walk away from the premise with nothing. Also be sure that the lease and personal guaranty shall void in the event of a valid lease assignment. Otherwise, you remain liable for any damages, included but not limited to unpaid rent, caused by your Assignee.

3) Liquor License Contingency Clause: If you intend to apply for a liquor license for your premise, most restaurant attorneys strongly advise that you insert an “escape clause” in your lease in the event that your liquor license application is rejected by the NYSLA. A fair escape clause would be that the tenant gets to void the lease in the event their NYSLA application is rejected BUT are required to pay all rent incurred (included any abated months) to the date of rejection. The personal guaranty, if any, must also void as of that date.

4) Free Rent: Attempt to get the premise rent-free until the latter of (i) the day Tenant opens the establishment to the public, or (ii) the date Tenant receives its liquor license from the NYSLA. Most landlords will agree to this request with some limitation or outside rent commencement date depending on the present demand for the premise and the caliber of the proposed restaurant tenant.

5) The Personal Guaranty: Generally, if the lease is going to be signed in the name of a corporation, all landlords will ask for your personal guaranty. Most landlords, however, will waive this personal guarantee if he/she is presented with other options that may reduce his/her risk in the event of your breach. For example, if you request that the landlord remove the personal guarantee clause and he/she initially refuses, you can offer him a larger security deposit in exchange for eliminating the clause. The larger security deposit will give him/her a greater level of comfort in the event of your default; his goal for including the personal guarantee in the first place. If you don’t have the capital to offer a greater security deposit, then you can offer to compromise and provide the Landlord with a limited personal guarantee or a “Good Guy Clause” which provides that you will be personally liable only up to the date that you surrender the premises back to the Landlord (a/k/a give him the keys).

GENERAL RULE: Lock in the longest lease term possible with the right to assign the lease.  Get a Liquor License contingency clause and make sure the lease and guaranty void in the event of an assignment or a failure to obtain the Liquor License.

There are many other clauses in a commercial restaurant lease and just because I highlighted the ones above does not mean that the others don’t warrant equal attention. A commercial lease negotiation and review should be handled by a qualified attorney.

As the owner of a restaurant, you should consider providing your key personnel with employment contracts. The employment contract will provide the employee with job security, will clarify all of the conditions and duties of employment, and will create a contractual obligation for them to be employed for the term of the contract.

GENERAL RULE: While there is no required form that the contract must take, certain key provisions should be included, such as the (i) term (i.e. length of employment), (ii) compensation, (iii) employees duties and obligations, (iv) confidentiality, non-disclosure, non-compete, and non-solicit provisions, and (v) grounds for termination or a “Just Cause” clause.

The more detail contained in the contract, the less room for disagreement during the employment period. As an owner, be sure to have the “Just Cause” clause worded in a manner that allows you to terminate the employee during the term, without any penalty, if the employee engages in negligence, misconduct, excessive absences, drug use, theft, fraud, fails to perform his duties in a professional manner, performs an act or omission of an act that could be deemed injurious to the company financially or to its reputation, or is convicted (or a plea of no contest) of any misdemeanor or felony.

The ABC Law prohibits from selling, serving, delivering or offering to patrons an unlimited number of drinks during any set period of time for a fixed price. The law also requires that licensees prohibit party organizers, promoters, etc., from engaging in this conduct in the licensees’ establishment. The statute also prohibits licensees from creating drink specials which, in the judgment of the Authority, are attempts to circumvent the law. This includes offerings of free drinks, or multiple drinks for free or for the price of a single drink, or for a low initial price followed by a price increment per hour or other period of time.

GENERAL RULE: Unlimited drinks or “All you can drink” specials are illegal in NY.

The SLA does allow 2 for 1, half price and other such specials where the price of a drink is not lower than one-half of the premise’s normal or regular price for the same drink. Section 117-a does not apply to private functions not opened to the public, such as weddings, banquets, or receptions, or other similar functions or to a package of food and beverages where the service of alcoholic beverages is incidental to the event or function. Most recently, a NY bar that violated this rule received a civil penalty in the amount of $10,000.00 and a 15 day suspension of their liquor license.

A recent onslaught of lawsuits involving illegal tip sharing amongst restaurant employees is rocking the restaurant industry. These lawsuits are not new to the industry but they have recently increased in numbers as a result of a few recent, and very substantial, plaintiff/employee successes.

On April 4, 2008, in what will be the largest class action suit ever brought by New York restaurant employees, employees are suing Starbucks for violating a state law that prohibits management from receiving part of workers’ tips. At Starbucks, “shift supervisors” share the pooled tips with baristas, prompting a suit from a former barista, on behalf of at least 2,000 Starbucks baristas in NY who are allegedly owed over $5 million. The lawsuit comes on the heels of last month’s California ruling, where a state judge found Starbucks liable for $105 million, finding Starbucks illegally enabled shift supervisors to take a share of the tips.

GENERAL RULE: Restaurants in New York State are allowed to pay employees who receive tips as little as $4.35 — less than the federal minimum wage of $5.85 per hour and the New York State minimum wage of $7.15. However, To use this “tip credit”, amongst other things, employers are not permitted to share tips among “agents” of the employer.

This general rule seems straightforward, but it’s not. The law fails to define who constitutes an “agent” of an employer. An owner, officer of the corporation, or a general manager clearly fit this bill and cannot share in tips. But, what about a maitre‘d? a shift supervisor? or an assistant manager? The answer is . . .it depends on their job tasks and responsibilities – not their job title. The Department of Labor (DOL) has stated that an agent, “does not include a mere supervisory employee who does not have the authority to hire or fire.” And just because a maitre‘d has “supervisory” responsibilities over the rest of the dining room personnel does not necessarily mean that the maitre‘d cannot share in employee tips. The DOL will look at each situation on an individual basis, and pay particular attention to whether the maitre‘d (or another employee) “acts in the place of the owner”, by performing such functions as hiring and firing employees, or other managerial responsibilities such as disciplining and setting wages or work schedules.

In its defense, Starbucks argued in California court and again in New York that it’s shift supervisors are not managers (although they are in charge when managers are away and can evaluate baristas in performance reviews), because (i) the customers cannot differentiate between the shift supervisors and the baristas, (ii) the shift supervisors often do the same work as baristas including serving the customers, and (iii) the shift supervisors pay is only 22 cents more per hour. However, the California Court ruled that the tasks and responsibilities given to these “shift supervisors” did indeed make them “agents” of the employer and hence, they were prohibited from sharing in the tips.

Thus, the prohibition of sharing tips with an “agent” of an employer must be very carefully adhered to as the penalties can be severe. As in the Starbuck’s cases and many others, the definition of what constitutes an “agent” is presently being defined and redefined by the courts. If you are an employer and employ a Maitre’d, Assistant Manager, captain, or shift supervisor, play it safe, compensate them fairly – or even magnificently - but keep their hands out of the tip jar.

If you already have an on-Premise liquor license for your restaurant, you can serve food and liquor at an off-premise event as long as you receive a catering permit from the Liquor Authority for that event. 

GENERAL RULE: A Catering Permit authorizes a retail on-premise licensee to furnish alcoholic beverages for use at a specific function, occasion or event located off the licensed premise.

The fee for the permit is $48.00 per point of service/bar and there are restrictions/rules. For example:
(i) the function must be held indoors and not be open to the general public,
(ii) the permit is valid only for twenty-four (24) consecutive hours beginning at 8:00 a.m. on its effective date,
(iii) the applicant must be hired to serve food, in addition to alcoholic beverages, at the event (pretzels and chips do not meet the minimum requirements for “food”),
(iv) the application must be received the NYSLA at least fifteen (15) days prior to the event,
(v) a separate permit is required for each point of sale, and
(vi) no game of bingo or other game of chance may be played.

A diagram of the area to be licensed must be attached to the application along with a menu of food and alcoholic beverages to be served at the event.

The Equal Employment Opportunity Commission (”EEOC”) has targeted the restaurant industry as the “single largest” source of sexual harassment claims. With all the media attention on the subject lately, the number of sexual harassment cases filed each year against restaurants and their owners are escalating at an all too rapid pace. Restaurant owners must now take a pro-active stance to keep such complaints from damaging their operation. All employees, male and female, need to be formally informed as to what types of conduct are unlawful. Assuming that your managers and employees know how to behave without explicit guidelines could be your ticket to the courthouse. A series of Supreme Court decisions have defined what “sexual harassment” means. Those cases, and the interpretive guidelines of the Equal Employment Opportunity (EEOC), define two distinct types of sexual harassment:

• quid pro quo (a legal term meaning “this for that”), in which a supervisor demands sexual favors from an employee and threatens to fire the employee if the conditions are not met; and

• hostile environment, in which a supervisor or employee creates a work environment through verbal or physical conduct that interferes with another co-worker’s job performance or creates an intimidating work environment. A hostile environment is created when unwelcome sexual behavior is repeated. For example, an employee keeps telling off-color jokes after another staff member says they are offensive, or one employee keeps asking another employee for dates after being refused.

GENERAL RULE: An employer’s obligation with regard to sexual harassment arises before any act of harassment even occurs. As such, most lawyers practicing in this field strongly urge their employer-clients to distribute a clear and explicit sexual harassment prohibition policy and reporting procedure. Additionally, Anti-harassment training should occur on a regular basis which should educate managers and other employees as to what conduct is specifically prohibited (including a presentation of hypothetical harassment scenarios) and what to do if the employee believes they have been/are being harassed.

This policy and training is critical because under federal case law, an employer can fulfill its obligation if it takes all reasonable steps to prevent harassment before it occurs and takes effective steps to promptly remedy the harassment after it takes place. If these general principles are consistently and carefully applied, the employer can go a long way towards limiting its exposure and liability for sexual harassment.