OT: any club/bar owners on here?, thinking about taking over a club ... Options

[SirAndy]

so i've been thinking about opening a bar/club here in oakland for a while now and yesterday i was offered what i would consider the ideal venue.

the club has been at the current place for 25 years, comes with full inventory, liquor license, venue license, got a large outside patio where people can smoke & drink, full bar, full kitchen (!), large stage for shows. about 3000 sf of inside space.
the current owner has simply been burned out and wants to retire.

now i have run my own bar back in germany and i'm friends with several club owners back home, so i know the business side of it, but it would be great if i could pick someone's brain who has run a bar/club here in the US.
i'm sure there'll be quite a few differences.

if you know anything about the club/bar business, please PM me so i can annoy you with lots of questions!
(IMG:style_emoticons/default/biggrin.gif) Andy

[Danny_Ocean]

Last time I checked, a liquor license in CA cost more than the most expensive Porsche...is the liquor license included in the sale/transfer?

[SirAndy]

Last time I checked, a liquor license in CA cost more than the most expensive Porsche...is the liquor license included in the sale/transfer?

yes! all included ... (IMG:style_emoticons/default/piratenanner.gif)

wouldn't touch it otherwise as oakland does not issue any new liquor licenses anymore. the only way to get one is to take an existing one over or if one goes back to the pool after a place closed down.
and the waiting list for that is looooong ...
(IMG:style_emoticons/default/shades.gif) Andy

[r_towle]

Last time I checked, a liquor license in CA cost more than the most expensive Porsche...is the liquor license included in the sale/transfer?

yes! all included ... (IMG:style_emoticons/default/piratenanner.gif)

wouldn't touch it otherwise as oakland does not issue any new liquor licenses anymore. the only way to get one is to take an existing one over or if one goes back to the pool after a place closed down.
and the waiting list for that is looooong ...
(IMG:style_emoticons/default/shades.gif) Andy

My first thought was regarding zoning etc.
Typically an existing owner can continue to do certain things...live music, dancing, number of people allowed inside, etc. You really need to talk to the zoning and business people to ensure that what you assume comes with it, actually does.

The liquor license can be transfered, but certain rights to do certain things do not transfer.

I am not sure if I explained this correctly.
Try this.
The owner has had live music for 25 years...never got the new permit that was required of live music places four years ago. (hypothetical) The law cannot enforce him to do it because he has been doing his business this way for 25 years. The existing owner has non-transferable rights based upon history, and based upon his rights that existed prior to certain laws taking affect. He is granfathered in. He may have certain things that are considered "pre-existing non-conforming" (that is the legal term) under the law.
He is not breaking the law. But he cannot transfer those rights. He may not even know about the new law because it would not affect him.


Some of these rights can be transferred if you actually buy the corporation.
That has its own liability to worry about and I would not suggest that you do that.
Just buy the assets. Someone could come back around with a lawsuit for something that happened years ago against the coroporation, and you are then liable.

A good business lawyer can split those hairs for you.
Buying the assets is the cheapest way to go legally.
Buying the corporation can be done with a pretty significant legal contract that makes the previous owner liable for historic things.
the reality is that if he is dead or broke, another good lawyer can get to your money via the corporation...so I would not so it.

Do a good amount of due dilligence around what you want to do with the place to make sure you can in fact do it. You, the new owners will be required to get the permit, or no live music. You may find these types of issues with food, live music, hours of operation etc.

Expect to put three to four time your initial projections of capital outlay for permitting...new owners get stung for all sorts of new fees.

Rich