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by srothstein
Thu Nov 11, 2010 1:20 am
Forum: General Texas CHL Discussion
Topic: Is Their 51% Sign Legit?
Replies: 14
Views: 2604

Re: Is Their 51% Sign Legit?

Keith has it correct on how the whole building could be 51%, and I will explain that in a minute.

First I wanted to correct Bronco78's reading of the license since it is part of the problem. The first two characters of the license number tell you what kind of license it is. In this case, NB is a private club beer and wine permit, allowing the sale of beer or wine to members of the club. The PE is listed as a subordinate, which means it is an additional license to the one the main number is issued for. In this case, the PE allows the club owner to transport alcoholic beverages as part of the business. I am stretching my memory here, but I seem to recall that Grayson County is pretty dry except for the private clubs which causes all sorts of problems. The cartage license is required to let him get the liquor from the distributor, which may not even be in the county, back to the club.

The reason I wanted to cover this first is because it explains that the license is for a private club. The laws on those get really weird really fast. In a normal license, the law allows one main license per address. The business owner could get it or the bar owner if they sublet the location. In either case, the license automatically covers the whole location unless some part of the building is diagrammed off on the license application. In the case of the sublet store, it can be argued that the license is restricted to just the rented part, as this is done for stores in malls and such. It is not a foregone conclusion on this and may need to be decided by a court, which I recommend avoiding. The real trick is if the business owner applies for the license, he is supposed to list all of the receipts of the business on the application, which makes 51% alcohol pretty hard to get.

The advantage to covering the entire building with the license is that it lets customers drink in any part of the building. The disadvantage is that it makes the whole building a 51% location IF the license is written that way. The advantage to diagramming part of the building off on the license is that it really limits TABC in the searches and inspections. It also makes the 51% easier to legally get if that is your goal. The disadvantage is that it means the customers cannot legally take their drinks to their seats to watch sporting events. This would drastically lower sales.

And now for the amazing part and why private clubs can be so confusing. I am stretching my memory hard here and I could be wrong since I never worked in a private club area (some parts of the state have a lot of private clubs, others have almost none). There are different types of private clubs. One type makes all the alcohol purchases out of the club funds and all jointly owned by the club members. They are only allowed to charge for the setups, etc. and the alcohol charges are billed as part of your monthly dues. If this is the type of club setup, they are not making any money from the sales of alcoholic beverages since the members already own the booze. I am not sure how many clubs are set up this way, and how many are set up to sell the booze. Both have the same effect of selling alcohol. This is another of those areas where no one has looked carefully at the actual wording of the law and how it would apply for CHL or 51% rules.

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