Mailing Date: October 28, 2009
Jennifer D. Berwick
Conroy Catering, Inc.
RE: Request for Agreement to Lease a Liquor License
Dear Ms. Berwick:
ISSUE: This office is in receipt of your October 13, 2009 e-mail correspondence, wherein you request a standard boiler plate agreement for the leasing of a liquor license to an outside company. You describe that the company will need authority to purchase liquor under the license, provide all bartending personnel and charge patrons for beer, liquor, wine, etc.
Pennsylvania Liquor Control Board (“Board”) records indicate Conroy Catering at Knowlton Mansion, Inc. is the holder of Restaurant Liquor License R-6697 (LID 43815) for the premises located at 8001-8101 Verree Road, Philadelphia, Pennsylvania.
OPINION: Section 468 of the Liquor Code prohibits the assignment of liquor licenses. [47 P.S. § 4-468(a)]. Additionally, licenses may only be issued to the applicant and no other person is to be pecuniarily interested in the license. Thus, you may not lease your liquor license to another entity. Therefore, no such “boiler plate” agreement language exists. However, a licensee may enter into a partnership agreement or joint venture with another entity, or a management company may operate the premises on the licensee’s behalf, under certain circumstances.
With regard to management companies, the Board has traditionally permitted management companies to operate a licensed premises on behalf of a licensee, provided that such companies do not have an unlawful pecuniary interest in the license. A pecuniary interest has been defined as substantial control of the licensed business, evidenced by participation and profits, assumption of liability, decision making authority and purchasing or equipment or other elements of ownership. Appeal of E-J Westside Inn Corp., 449 A.2d 93 (Pa. Cmwlth. 1982). Section 102 of the Liquor Code defines management company as “any entity employed or otherwise contracted by a licensee to operate, manage or supervise all or part of the operation of the licensed premises.” [47 P.S. § 1-102]. Agreements between licensees and management companies are reviewed by the Board’s Bureau of Licensing (“Licensing”) on a case-by-case basis to ensure that no unlawful pecuniary interests exists in such agreements.
To transfer your license to another person or entity, a transfer application must be filed with Licensing. For additional information, contact Licensing at 717-783-8250.
Should you have any further questions, please feel free to contact this office again.
THIS OPINION APPLIES ONLY TO THE FACTUAL SITUATION DESCRIBED HEREIN AND DOES NOT INSULATE THE LICENSEE OR OTHERS FROM CONSEQUENCES OF CONDUCT OCCURRING PRIOR TO ITS ISSUANCE. THE PROPRIETY OF THE PROPOSED CONDUCT HAS BEEN ADDRESSED ONLY UNDER THE LIQUOR CODE AND REGULATIONS. THE LAWS AND POLICIES ON WHICH THIS OPINION IS BASED ARE SUBJECT TO CHANGE BY THE LEGISLATURE OR THE PENNSYLVANIA LIQUOR CONTROL BOARD.
Very truly yours,
FAITH S. DIEHL
cc: Pennsylvania State Police,
Bureau of Liquor Control Enforcement
Jerry Waters, Sr., Director, Office of Regulatory Affairs
Jane Melchior, Director, Bureau of Licensing
Tisha Albert, Assistant Director, Bureau of Licensing
LCB Advisory Opinion No. 09-419