Nightclub Permits

by Jamie Zawinski
Created: 13 Jan 2000
Updated: 4 Dec 2007

There is an impressive array of permits that need to be obtained to operate a nightclub in San Francisco. I'll try and describe each of them here.

Liquor License (Bar, 48)

When people think of nightclub permits, this is the one they usually think of. The Liquor license is issued by the State of California Department of Alcoholic Beverage Control (the ABC.) Liquor licenses are transferable, and they can be issued to either an individual or a company. Sometimes there is a quota of how many liquor licenses can be issued in a particular area, so it is often easier to buy an existing liquor license from someone and transfer it, than it is to get a new one. This can be expensive (on the order of $50k), but is doable, since there is a thriving industry of ``liquor license brokers'' who specialize in moving these around.

There are several types of liquor licenses, but the two most interesting ones are the ABC Type 48 license (the ``bar'' license), and the type 47 license (the ``restaurant'' license.)

The bar license allows you to serve hard liquor on premises until 2:00 AM, in a facility that only admits entry to people who are 21 years of age and older.

Liquor License (Restaurant, 47)

The restaurant license is like the bar license, but lets you serve alcohol in a facility that admits minors. (You can't serve minors, of course, but they can be in the room.) So if you attend an 18-and-over nightclub in California, and they have a bar, then that nightclub is technically a restaurant.

The restaurant license is supposedly much easier to get than the bar license, provided you are actually a restaurant. There is a rather complicated definition of what constitutes being a restaurant: Basically it comes down to: you need to have a fully equipped kitchen, you need to serve a variety of full meals during normal meal hours (if you are open.) The ABC documents also go on to say:

    ``Incidental, sporadic or infrequent sales of meals or a mere offering of meals without actual sales is not compliance.''

    ``The Department will presume that a licensee is operating as a bona fide eating place if the gross sales of food prepared and sold to guests on the premises exceeds the gross sales of alcoholic beverages. `Prepared' means any processing preliminary to the final serving of food. Note: Some licensees have a `conditional' license that requires food sales to be 50% or more of the total gross sales.''

These licenses are defined in the California Consitution, Article XX Section 22; and the Alcoholic Beverage Control Act.

Place of Entertainment

This license is issued by the San Francisco Police Department. You need this permit if there is entertainment of any kind in conjunction with the serving of food or beverages. The definition of ``entertainment'' is very broad, so this is effectively a permit for public assembly.

Section 1060 of the San Francisco Police Code defines this permit, and the rules governing its issuance.

Dance Hall Keeper

You need to have this permit if you want to allow people to dance. You're allowed to play music whenever you want, but believe it or not, if you own a business (a bar, a restaurant, whatever) and some of your customers get up and start dancing, then you're breaking the law if you don't have one of these permits.

That's right, just like in ``Footloose.'' Right here in San Francisco.

It has even happened on occasion that clubs have had their Dance Hall Keeper licenses suspended, requiring the staff to prevent people from dancing. ``I'm sorry sir, you can't dance tonight, we don't have a permit for it.'' Imagine the incredulity of each customer when this is explained to them.

Sections 1022 through 1027 of the San Francisco Police Code define this permit.

One very interesting detail is section 1026(e), which says that if you have a Dance Hall Keeper permit, then you may not grant your patrons in-and-out privileges. This very much complicates matters for a nightclub operator, since, as of 1998, California does not allow smoking in any enclosed workplace, including clubs, bars, and restaurants. So if you can't allow your customers to smoke inside, and you can't allow them to go outside to smoke and then re-enter, then you're going to lose a lot of business from the tobacco addicts...

Section 6404.5 of the California Labor Code is the law that prohibits smoking.

Also note that the Dance Hall Keeper permit only allows dancing until 2:00 AM unless (as per 1026(a)) the Chief of Police, ``at his discression,'' chooses to allow dancing at other hours.

Update: After years of work on the part of the San Francisco Late Night Coalition and Supervisor Chris Daly, the Dance Hall Keeper legislation has been changed. I've not yet seen a copy of the final, revised legislation, but my understanding is that it exempts businesses who have a valid Place of Entertainment permit from also needing a Dance Hall Keeper permit.

The permit itself is still on the books, however: businesses that only have a Place of Assembly permit (not Place of Entertainment) would still need a Dance Hall Keeper permit to allow dancing.

All nightclubs have Place of Entertainment permits. I don't know whether bars would tend to have Place of Entertainment or merely Place of Assembly: I don't understand the conditions under which a business might have only Place of Assembly.

There's a little information about this on the SFLNC's site. (Or there was, until they reorganized their site again. Their sucktastic new design prevents me from figuring out where that page went.)

Extended-Hours Premises

This is the license you need in order to be open later than 2:00 AM. This license used to be called a ``Cabaret'' license.

This license is required for patrons to remain on site, or to be admitted, between the hours of 2:00 AM and 6:00 AM on any premises that serves food or beverages, or has entertainment.

Though this permit allows people to remain in the club, it does not automatically allow dancing after 2:00 AM! If you want people to be able to dance (instead of just standing around looking at each other) then you also need to have an ``Extended Hours'' annotation on the Dance-Hall Keeper permit.

Section 1070 of the San Francisco Police Code defines the Extended Hours Premises permit.

So you need a permit from the State, and several permits from the City. The State permit is transferrable, and can be issued to a company instead of an individual, but the City permits are effectively non-transferable, and can only be issued to an individual (not a company). If you have one of these permits, and you want to sell your business, the buyer has to apply for their own instance of this permit.

By ``effectively'' I mean that you could transfer them if the SFPD chose to allow that, but they won't. The permits are ``not transferrable except with the written consent of the Chief of Police.'' Which means that they could easily and legally transfer them, if they were so inclined. They have done so in the past, but today, their unwritten policy seems to be to never allow this.

All of the police permits can have arbitrary ``stipulations'' attached to them. These stipulations can be anything, from restrictions on hours of operation, to the number of employees that must be present, to other requirements like making a ``hotline'' phone number available to neighbors.

That's quite a collection of permits, isn't it? There are many more. For example, you need a different permit to have a pool table. There's a permit for everything.

To get the ABC permit, you fill out an application, telling them everything there is to know about your life. They fingerprint you. Then you post a sign on the door of the premises to be licensed, so that any interested parties have an opportunity to protest the issuance (or transfer) of the license. You are also required to place an ad in a local newspaper announcing the license application.

The public has 30 days to submit their comments, after which the ABC decides whether to issue the permit.

To get the police permits, you submit an application, and then eventually go to a permit hearing, to which the public is invited. (These permits are posted similarly to the ABC permits.) The agency that issues the permits is within each district of the SFPD, and the people making the decisions are police officers.

The permits must be approved by all of the following before the police will issue the permits:

If you are denied permits, or if you are granted permits with unacceptable stipulations attached, you have the right to file an appeal within 15 days. then you get to go to the Board of Permit Appeals. The Appeals board is appointed by the Mayor, and is city-wide.

If you still aren't satisfied after that, then your next recourse is to take your appeal to the Superior Court.

Since you need all of these permits in order to operate a nightclub, the police permits end up being the important ones, since they are the ones that are harder to get.

Update: In July 2002, the San Francisco Late Night Coalition had another victory: there is now an ``Entertainment Commission'' in San Francisco that handles all entertainment permitting city-wide. This moved control of permitting (which is a matter of public policy) from the police department (the executive branch) to the city government (the legislative branch.) This means the police are no longer be responsible for deciding who does and does not get permits, only that venues have the appropriate permits.

The rules have stayed largely the same, however: to run a club, you'll still need the same sets of permits, they are just issued by a different organization. They are however, now issued in a less biased, more even-handed manner.

There is detailed information about the Entertainment Commission legislation on the SFLNC's site.