There are 75 counties in Arkansas and more than half of them are “dry.” This means that normal alcohol sales are prohibited. However, the legislature has provided an exception for restaurants and similar businesses which are set up as private clubs. For example, once your private club is in place, your patrons can join the private club by signing in at the front of your restaurant. After that, they will be able to purchase food and alcohol from your business. By adding alcohol to your menu, your revenue should increase through alcohol sales and increased foot traffic to your establishment. Keep reading to see how this works under the current statutes and regulations.
What is a Private Club?
Arkansas law defines a private club as:
“a nonprofit corporation organized and existing under the laws of this state, no part of the net revenues of which shall inure directly or indirectly to the benefit of any of its members or any other individual, except for the payment of bona fide expenses of the club’s operations, and which is conducted for some common recreational, social, patriotic, political, national, benevolent, athletic, community hospitality, professional association, entertainment, or other nonprofit object or purpose other than the consumption of alcoholic beverages.”
This means that members of the club (restaurant patrons) cannot receive any of the money made by the private club. Also, the purpose of the private club must be for something other than the consumption of alcohol. For example, a valid primary purpose could be something like: to operate as a restaurant, with the sale of alcohol being used to supplement the dining experience, and where the majority of sales will be food related.
Other Requirements of Private Clubs
- The nonprofit corporation shall have been in existence for a period of not less than one (1) year before applying for a permit.
a) We can form a non-profit corporation for your restaurant and then wait the 1 year period before applying for the liquor permit or
b) We can find a non-profit which has been in existence for more than 1 year for you to purchase. Once you purchase the non-profit, we can apply for your liquor permit immediately. These non-profits can be found for anywhere from $500-$4,500. While you end up spending a bit more on the front end, you do not have to wait 1 year to apply for your liquor permit, and the cost of purchasing the non-profit should be made up by liquor sales during the first year.
- At the time of application for the permit, the nonprofit corporation must have one hundred (100) or more members and at the time of application must own or lease, be the holder of a buy-sell agreement or offer and acceptance, or have an option to lease a building, property, or space therein for the reasonable comfort and accommodation of its members and their families and guests and restrict the use of club facilities to those persons.
- The non-profit must have a certain number of directors and must follow the Arkansas liquor permit application process.
Members of your community may object to your application for a liquor permit. If an objection is filed, there will be a hearing in front of the Alcoholic Beverage Control Division (ABC) Board, where witnesses would be called and evidence presented. The Board will issue a decision as to whether your permit should be approved and then the case can be appealed to the court system. Most likely, there will not be any objections to your application, but you never can be sure. Our attorneys can represent you and guide you every step of the way through that process should it come down to it.
While it is more time consuming and more expensive to get a liquor permit in a dry county, it can be and is done all the time. If you own a restaurant or other similar business in a dry county, give us a call at (479) 782-1125 or email us at firstname.lastname@example.org to get started on the process.
Here is an unofficial map of all the wet/dry counties in Arkansas: