How to run a bar or brewpub in the US: licenses, training and liability

A bar can lose its license in one bad night, and a brewpub carries two sets of rules at once: one for making beer and one for serving it. There is no national liquor license in the United States. Every state runs its own system, many cities add theirs, and the details change the moment you cross a border. Here is how to read the landscape before you sign a lease.

How does liquor licensing work in the US?

After Prohibition ended, the states took control of alcohol, and most still run a three-tier system: producers, wholesalers and retailers are separate license holders. A bar sits in the retail tier. The things to settle first are the same everywhere:

• Which license type fits what you sell: beer and wine only, or spirits too, and whether you serve on the premises.
• Whether the state caps the number of licenses, which makes them scarce and costly in some states and cheap in others.
• Whether the city or county must approve you before the state will.
• The hours you may sell, which the state or the locality sets.

Because the costs and wait times vary so much, read the guide for your state before you fall in love with a space. Start with the liquor license basics for US food businesses, then your state: Texas, Florida, New York, Tennessee, Minnesota or Utah.

What is different about a brewpub?

A brewpub makes beer and sells it where it is made. Most states have a license class for exactly that, but the rules differ on how much you may brew, whether you may sell your beer to go or to other bars, and whether you may serve other producers' beer and spirits. Some states require a food menu. Some treat the brewing side and the bar side as two licenses, with two applications, two fees and two sets of inspections.

Ask the state alcohol agency three questions before you buy equipment: what license class covers brewing and serving on the same site, what the production limit is, and whether you can sell packaged beer to take home. Keep your tax records for the two sides separate, because beer excise tax and retail sales tax are different taxes with different forms.

Is server training required?

In some states, yes. In others it is voluntary, but it can lower your insurance cost or give you a defense if a customer harms someone after leaving. Where it is required, it usually applies to every employee who serves or sells alcohol, and the certificate may expire. State guides cover the main programs: TABC seller-server training in Texas, BASSET in Illinois, the Oregon alcohol service permit and Louisiana alcohol permits.

What is dram shop liability?

Dram shop law lets an injured person sue a bar that served alcohol to a customer who was visibly intoxicated or underage and then caused harm, such as a crash. It comes from state statutes, from court decisions or from both, and most states have some version. The scope differs: some states limit claims to service to minors or to people who were clearly drunk, some cap damages and some set short time limits for a claim.

You cannot know your exposure from a map, so do three things. Read your state's rule. Train staff to refuse service and to write down what happened when they do. Tell your insurer exactly what you sell, because liquor liability is usually a separate line on a policy.

What are last call and the food rules?

The state or city sets the hours you may sell, and last call is a legal cut-off, not a courtesy. A few states or cities also require a share of sales from food, or a kitchen open during service. Arizona's Series 12 license is the best-known example, with a food percentage test. Some states also limit happy hours and drink specials, and a recent change in Pennsylvania eased them. See the Massachusetts happy hour rule and Pennsylvania's 2024 liquor law changes.

How does a large-party gratuity work on a bar tab?

Many bars add an automatic gratuity for big groups, and that is fine if it is on the menu and the check. What the charge is called decides how it is treated. A compulsory charge for service is not a tip under federal wage law, and the IRS treats a service charge you add and pass to staff as wages. Some states also tax it. Look at your state's guide: Texas, Florida, Illinois, Tennessee or New York City's rule for parties of eight.

What should a first-time owner do before opening night?

• Get the license in hand before you buy stock. A pending application is not permission.
• Train every server and bartender, and file the certificates.
• Post the hours, the cut-off for last call and your refusal policy where staff can see them.
• Ask your insurer for a written quote for liquor liability.
• Keep every liquor invoice. Inspectors ask for them.

More guides for your business:

• How to run a bakery in the US
• How to run a hotel restaurant in the US
• How to run a food hall stall or market stand in the US

More in the US guides for food businesses.