Florida restaurants forgo expensive liquor licenses

Mixing martinis and serving scotch can make a big difference in a restaurant’s bottom line, but restrictions and expenses tied to liquor licenses keep many from reaping the extra revenue.

Several Southwest Florida restaurants and bars are opting for wine and beer licenses instead to recoup those potential sales, so much so that the growth of wine and beer licenses is outpacing the growth of liquor licenses.

More than half of existing wine and beer licenses for Lee and Collier counties have been issued in the past five years.

“Beer and beer and wine licenses are easier and less expensive than liquor licenses; thus one of the reasons there are more of the former,” said Tajiana Ancora-Brown, a spokeswoman for the Florida Department of Professional and Business Regulation.

Some restaurateurs, such as Sean Gavin at Crave restaurant in Fort Myers, recognized the potential of wine and beer early on as a way to please customers despite the lack of liquor.

Gavin and his staff have built up their breakfast, brunch and lunch by offering what he’s dubbed rocktails — a kind of mock cocktail using wine-based liquors. The Bloody Marys and Screwdrivers on the drink menu are becoming as popular as the blueberry pancakes and shrimp and grits the restaurant has built a reputation for.

Besides, getting a liquor license wasn’t an option, Gavin said.

“At my location, I don’t have the ability, I would have to purchase a private liquor license ... I mean the actual unrestricted liquor licenses,” he said. “You have to purchase those from private parties.”

Restaurant liquor licenses are relegated to restaurants with 150 seats or more and 2,500 square feet under one roof — plus the stipulation that 51 percent of sales have to come from food and nonalcoholic beverages, said Kathy Long, owner of Permitting Specialists of Food and Beverage in Cape Coral.

The less restrictive quota liquor license that Gavin mentioned — which doesn’t have the hassle of square footage, seating or percentage limitations — is much harder to come by, Long said.

“Those licenses are initially issued through a lottery depending on the increase in population on an annual basis,” she said. “If a particular county has increased in one given year by 7,500 people, one new license is granted.”

Because supply and demand drives the market, the cost of buying an existing quota license can skyrocket. When Long started tracking the value of licenses as far back as 16 years, quota licenses in Lee sold for $305,000 and for $400,000 in Collier. These days, due to the economic downturn, you can buy one in Lee for around $115,000 or one in Collier for $155,000.

The more restrictive restaurant liquor licenses are much cheaper, with an annual licensing fee of $1,820, Long said.

For new, mid-size restaurants such as Sumo Sushi Sake in Naples, the cost of getting a quota liquor license was prohibitive.

“They keep it tough to get a liquor license,” said Mike Zaccheo, owner of the sushi and Japanese joint. “Then you get into having heavier rent and you have to fill those seats.”

Gavin never considered a liquor license for Crave, but said many smaller restaurateurs look into wine and beer because of higher overhead costs that come with liquor. His wine and beer license costs him $392 a year.

Naples Flatbread at Miromar Outlets in Estero is one of the few restaurants in Lee County that is changing from wine and beer to full bar. State records indicate 23 Lee wine and beer license holders have upgraded over the past five years.

Naples Flatbread had an awning installed for the outdoor patio about two years ago, which met the seating under cover rule for the restaurant liquor license. Still, owner Ralph Desiano waited to make the switch, officially securing his temporary restaurant liquor license yesterday.

“When we first opened we wanted to keep things simple, and we wanted less moving parts,” he said. “That was part of the original design and thought process for this concept, both for myself and for potential franchisees. Beer and wine is easy; liquor adds another dimension.”

It meant changes from a labor perspective, such as getting qualified bartenders and training staff, but also meant the higher costs of stocking liquor and remodeling the bar and restaurant to suit liquor service as well as more inventory challenges, Desiano said.

“It’s easier to inventory bottles of beer and bottles of wine and know what you’re losing,” he said. “It’s a lot more difficult to figure out if an ounce of vodka was given away in some mixed drink.”

There’s also several approvals to get signed off from the health department, department of treasury and even zoning permissions to secure.

He estimates total costs of upgrading his license, from installing the awning to training his staff and retrofitting the bar, will reach about $15,000.

Desiano estimates the investment will pay off within a year, he said.

“We know that we’ve lost people or had people visit less frequently than they would have ... or potentially at all because we don’t or didn’t serve liquor,” Desiano said.