California has four liquor license types that must be purchased on the open market from the existing pool of available licenses.
- Type 47: On sale general – full liquor – for restaurants
- Type 48: On sale general – full liquor – for bars and nightclubs (over 21 only)
- Type 20: Off sale beer and wine only – for convenience stores
- Type 21: Off sale general – full liquor – for markets and liquor stores
The exception to this rule is the type 20 license, which in many areas of California can still be applied for directly from the California Department of Alcoholic Beverage Control (or ABC). However, if your business is located in a ‘moratorium’ area, you too will have to buy the license from a private seller.
Prices vary according to county and license type. The most expensive licenses are in the full liquor category. Full liquor licenses can range from $12,000 to as high as $400,000 with beer and wine being as low a $3-5,000.
The market price of a license is determined by three factors:
- The county
- The license type
- The current market value based on supply and demand. (Unless you are able to make contact with a seller directly, your best bet is to contact a reputable liquor license broker.)
When buying a liquor license it’s also important to know that you must, in order perform the transfer legally, establish an escrow. Make sure that the agent is familiar with ABC requirements (this is not like an escrow for buying a home).
It is not recommended to buy a liquor license from an “auction” website. Without being able to see the conditions or financial holds placed on a license, you may be bidding on a license that comes with unnecessary headaches.
Make sure that the company that you work with is licensed, bonded and insured for your safety.
For more information, please visit http://www.abc.ca.gov/