Florida restaurant liquor license: quota licenses and the SRX

Florida caps full liquor licenses by county population, at one quota license for each 7,500 residents, which makes them scarce. A restaurant that meets the size, seating and food-sales tests in section 561.20 can apply for a special restaurant license instead, which is not subject to the quota. The tests are specific, and the percentage is audited after you open.

What is a quota license?

Section 561.20 limits the licenses issued under section 565.02(1)(a) to (f) to one for each 7,500 residents of a county. A new license is issued for each increase of 7,500 residents above the April 1, 1999 baseline, using the most recent population estimate, and a county that allows alcohol sales gets at least three. No single vendor may hold an interest in more than 30 percent of the licenses in a county. The result is a scarce license that owners buy on the open market, so a new restaurant usually asks whether it qualifies for the special license first.

What is the special restaurant license?

The statute provides a special license for a restaurant, often called the SRX, that does not count against the quota. To qualify, the restaurant must meet all of these:

• A minimum of 2,000 square feet of service area.
• Equipment to serve 120 persons at one time, with at least 120 physical seats available during operating hours.
• It holds itself out as a restaurant.
• At least 51 percent of its gross food and beverage revenue comes from food and nonalcoholic beverages, measured over the first 120-day operating period and the first 12-month period after that.

If your space is smaller than 2,000 square feet or has fewer than 120 seats, this license is not open to you, and you would look at other license types or a quota license.

How is the 51 percent test checked?

The state audits you after opening, and how often depends on how far above 51 percent you are:

• Level 1 (51 to 60 percent): every year
• Level 2 (61 to 75 percent): every 2 years
• Level 3 (76 to 90 percent): every 3 years
• Level 4 (91 to 100 percent): every 4 years

Failing the required percentage results in revocation, or denial of a pending application. The licensee, and anyone required to qualify on the application, cannot have an interest in a new application for 120 days. Treat the percentage as a number you track every month, not a figure you check at the audit.

How do you track food and beverage sales?

Set up your point of sale so that food, nonalcoholic drinks and alcohol sit in separate reporting categories, and review the split monthly. A bar program that grows faster than the kitchen can push a restaurant toward the line. If you are near it, consider whether happy hour pricing, a late-night bar menu or an events calendar is changing the mix.

Can you deliver alcohol with a food order?

The statute allows a licensee to sell or deliver alcohol in a sealed container for off-premises consumption only when food is sold in the same order. It does not allow sales of manufacturer-sealed bottles of distilled spirits. Delivery drivers must be at least 21, and sealed containers and dated receipts are required. Before you add alcohol to a delivery menu, confirm your license class covers it and that every driver, including a third-party driver, meets the age rule.

What about caterers and culinary programs?

Subsection (2)(a)5 covers caterers that derive at least 51 percent of revenue from food and nonalcoholic beverages at each event, and subsection (2)(a)6 covers culinary education programs. Different tests apply, so read the statute for your model.

What should you do before you sign a lease?

1. Measure the service area and count the seats you can legally hold.
2. Ask the Division of Alcoholic Beverages and Tobacco which license fits.
3. Model the food and beverage split from your menu.
4. Check zoning and distance rules with the city, since local rules apply as well.
5. Put a license condition in the lease, so you are not committed to rent before the license is approved.

What does the process cost in time?

Expect the application, the state review and the local approvals to take weeks or months, and plan your opening date around the longest step. A restaurant that signs a lease and starts construction before it knows its license class can end up with a bar it cannot use. Many owners open with food only and add the license later, but the 51 percent test is measured from the first 120 days of operation, so an early start with no alcohol sales is part of the record, and you should ask the state how it will treat that period.

What if the numbers are close to the line?

Imagine a 130-seat restaurant that sells $70,000 of food and soft drinks and $60,000 of alcohol in a month. Food is 54 percent of the total, which clears 51 percent with little room. A busy month of private parties with an open bar could take it under. A cushion is worth building: a food-led happy hour, a dessert and coffee push, or a lunch service that adds food revenue without adding drinks. Check the ratio every month, and talk to the state before the audit, not after.

More guides for your business:

• Florida food handler training and food manager certification
• Florida restaurant inspections and the food service license
• Florida dogs on restaurant patios law

More in the US guides for food businesses.