Do BYOB Restaurants Need A Liquor License

If you own a restaurant, you may be wondering if you need a liquor license to make it a BYOB (Bring Your Own Bottle/Booze) restaurant.  Having alcohol can enhance the dining experience for your customers.  But liquor licenses are both expensive and hard to obtain. So, can you skirt around this rule and have alcohol in your restaurant by making it BYOB?

There are different BYOB rules, depending on the state that your restaurant is in. For example, some states outright ban BYOB restaurants, whereas others allow it with varying rules. If you go BYOB, though, you need to be protected in the case of a rowdy customer.   

When it comes to BYOB, the rules can be quite messy and convoluted.  Because of this, we encourage you to keep reading.  We will go over these rules and make sense of them. We will also cover additional information, such as why you need liquor liability insurance.

How are BYOB Laws Determined?

In the United States, the legality of BYOB is decided on a state-by-state and county-by-county basis. In addition to this, because states and counties have their own governments, they also have variations on the specific amendments to the rules surrounding bring your own bottle service. 

Knowing the laws when it comes to BYOB is very important because they vary so much. For example:

  • It is outright banned in Colorado. It doesn’t matter whether or not you have a license; patrons can’t legally bring their own alcohol. 
  • In California, BYOB is legal only if you have a liquor license. 
  • In New Jersey, it is legal with or without a license, that is as long as the local municipality permits BYOB. There are some areas in the state in which it is not allowed. 

Even where it is legal, there are still restrictions. BYOB rules in New Jersey dictate that the only alcohols that can be brought by the patron are wine and malt alcohol. Thus, distilled drinks are not legally permitted. This can be said of other BYOB legal states within the US. 

To find the BYOB rules within your state, get in touch with the liquor licenses provider, as they should be able to answer any questions that you may have.  Make sure you confirm the legality of it on your state and local level and are aware of any drinks that are not allowed within the laws.  

Do You Need Liquor Liability Insurance for BYOB?

You need to have liquor liability insurance if you have alcohol on the premises of your restaurant, even in the context of the BYOB model. You will be held liable for the actions of someone who becomes intoxicated on your premises, and you need to have legal coverage for this.

In some cases, you may have rowdy patrons, and they will only get worse with alcohol.  If worse comes to worst and they get into a fight, cause property damage, injure themselves or others, drive under the influence, etc. this can result in a lot of trouble for you as the owner. 

There is a legal designation called a social host. It is “a server of alcohol that is not a licensed seller of alcohol.” This means that a BYOB restaurant is a social host because they “furnish, pay for, or have control over the alcohol served.”  According to insureyourcompany.com, although you are not serving the alcohol from the menu, this law can come into play when you do things such as:

  • Serve food with the beverage.
  • Provide alcohol-related items, such as wine glasses or bottle openers.
  • Serve the alcohol for the customer as though it was yours, or bring the bottle to the table if the customer handed it over. 
  • Charging a corking fee.

Thus, just like a licensed restaurant, you are held liable if someone causes damage while under the influence of alcohol that was consumed at your location.

Running a restaurant is already difficult, and the last thing you need is the stress of a big court payout on your shoulders.  Having liquor liability insurance will protect you, though! This insurance covers claims related to:

  • Assault and Battery
  • Drunk Driving
  • Property Damage.

Financially, liquor liability insurance

  • “[Protects] you from paying legal costs associated with your defense.”
  • “[Protects you from] paying for any settlement that you are found liable for.” 

So, make sure that you are covered by insurance. That way, if worse comes to worst, you will have financial coverage if it is needed.

There Are Alternative BYOB Styles to Choose From

In addition to traditional BYOB service, there are hybrid models that you can implement in your restaurant.  These alternative models allow you to have more control over the alcohol served, and in some cases, allow you to make a profit off of the alcohol that patrons bring to your establishment. 

If you are not a fan of the traditional BYOB style, the hybrid styles may be just for you. They can help you find a balance between traditional alcohol service and the bring your own bottle style that many people love. 

For those that are interested, here are some of the alternative BYOB styles that you may want to implement in your business: 

  • Complete the Drink: If spirits are allowed, provide your guests with mixers so that they can create their own drinks.  This could be something like create your own Bloody Mary.
  • FULL Service Optional: Let your guests decide whether they want to pour the drink or if the servers will pour the drink for them.
  • Full-Service- The guest brings their drink, and it is given to an employee when they arrive.  The alcohol is then brought to their table and served.
  • Corkage Fee- Generally, this fee will be applied in licensed restaurants that allow people to bring their own alcohol.  This is a way to still make money off of alcohol, even though you are not selling it.  The fee is based on the bottle that is brought, and prices generally range from $10-$100 or more a bottle. 

Keep in mind that implementing these styles could conflict with BYOB laws, and you may need a liquor license to implement them.

Do BYOB Restaurants Need a Liquor License? Check Your Local Laws!

BYOB laws can be quite messy. So remember, if you want to implement BYOB into your restaurant, you need to look at both state, local, and city laws since they can all vary. Also, make sure to pay attention to specifics, such as if certain alcohol types are prohibited under your area’s rules.

If it is legal and you do implement it, make sure to get liquor liability insurance, just in case someone causes damage, injury, or drives under the influence.  That way, you are covered from any legal or settlement costs.

If it is legal, BYOB is a great way to get around costly liquor licenses, and people love to bring their own drinks too. So, if you can, implement it in your restaurant and improve the customer experience!

Sources

https://www.wilentz.com/perspectives/criminal-law/2014-07-31-the-sober-truth-of-new-jersey-s-byob-law-and-the-acquisition-of-a-liquor-license

https://hkinsurance.com/2017/04/liquor-liability-byob-restaurants/

https://www.thehartford.com/business-insurance/liquor-liability-insurance 

https://blog.trycake.com/how-to-become-byob-restaurant#:~:text=Complete%20the%20Drink,like%20olives%20or%20fruit%20twists.

https://pos.toasttab.com/blog/on-the-line/what-is-a-corkage-fee

 

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