Former New Jersey Gov. Chris Christie once said regarding investigations, "…there's no way to make an investigation like this shorter, but there’s a lot of ways to make it longer…” and this advice can absolutely be applied to transferring a state liquor license. Okay, maybe you can try to make it shorter, but I wouldn't advise trying to bribe, coerce, or extort a representative from the Department of Alcoholic Beverage Control (ABC) or its equivalent depending on the state. The process from making an application to having the license transferred used to take approximately 55-70 days, but now because of labor shortages and work protocols, it can be up to 3 months in California, for example. The longer an escrow is open, the greater the chance of having it fall out of escrow, so it’s imperative that the liquor transfer is done right, the first time around.
Here are some tips on the process being a success on the initial go:
1. Make sure you are dealing with the appropriate signing authorities. The seller (licensee) must declare they are binding themselves to the applicant in their request to transfer the liquor license. I once tried to transfer a license and learned that the actual owner was overseas, and the sister was attempting to just sign for the brother. My advice is to look at the business license/permit and make sure it matches who is on the liquor license, this can easily be done by pulling it on the ABC website (it’s public information). This also goes for the buyer (applicant), only deal with the person who is going to be on the license and making the application. Also, make sure the applicant's identification paperwork all matches by name, because I have had experiences when the driver’s license, birth certificate, etc., were all different variations of the same name, i.e., sometimes the mother’s maiden name is the person’s middle name, etc., and it becomes a disaster because they have a hard time proving they are who they are to the ABC representative or investigator.
2. When the buyer fills out the application, triple-check to make sure that all lines are properly filled, and all contact information is up to date and correct. Don’t make it harder for the ABC investigator to get in touch with you. The applicant should make sure to pay all fees and show where all the money is coming from to buy the business. Since 9/11, ABC has become stricter on seeing exactly where every penny is coming from to buy the business, because of anti-terrorism funding operations. No silent partners, if someone is lending you the money, then that person must be investigated as well, i.e., criminal background, etc. When the applicant is doing the drawings with their application, also look at the previous drawings from when the seller was the applicant to make sure they haven’t added anything they were not supposed to, such as stage, additional unauthorized bar, or taken down the railings outside on the patio where there is outdoor drinking.
3. Make sure to have an escrow officer that is experienced in doing business sales and liquor transfers. This is important that the escrow officer can appropriately answer all the buyer's questions in the process and keep the escrow moving and "together" because these escrows take longer due to the license transfer, and the longer the escrow is open, the higher the probability of it going sideways.
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I am an experienced entrepreneur, attorney, & business professor. I & my EvergreenGold® team offer business owners sound advice & expertise to build business value & achieve profitable sales. Call me today for a business evaluation & SWOT analysis for your business anywhere in the USA.
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For over 25 years Peter Siegel, MBA has been providing niche business purchase financial advisory and loan placement services with SBA Loans, Non SBA Financing, Retirement Plan Conversions, Note Restructures, etc. Call me regarding business purchase financing and to get pre-qualified: 925-785-3118.
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McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.
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The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups.
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Cheryl's a restaurant business broker, over 25 years in the bar and restaurant industry coupled with a J.D. Cheryl works tirelessly to create successful strategies and effective negotiations for those who wish to purchase a new or sell an existing bar, restaurant, cafe, or night club. 415-309-2722
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I am the Founder Of BizBen.com. I consult daily with intermediaries, business buyers, owner/sellers & advisors daily about buying and selling California small to mid-sized businesses. Contact me today about joining & utilizing BizBen, consultations, & advisory services.
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If your business involves alcoholic beverage sales, we can help. Obtaining a liquor license transfer or selling a business with a license in California does not have to be a frustrating and overwhelming process. We have procured thousands of licenses for our clients.
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