Types of Business Licenses & Permits Needed for a Lounge

by Eric Miller; Updated September 26, 2017

There are several types of permits one must obtain to open a lounge. Some are steps that all businesses must take. Other types of licensing may be required depending on the type of lounge you want to open. This usually means whether or not the lounge will serve alcohol. It’s important to know which licenses are necessary and to follow the proper processes to prevent moderate to severe business headaches, especially when pursuing a license to serve alcohol at one’s place of business.

Defining Lounge

A lounge is a casual environment that often serves alcohol, but may or may not serve food. While the idea of a bar or restaurant that serves alcohol springs immediately to mind, there are other establishments such as cigar lounges that require the same permits to conduct business.

Beer Permit

A beer permit is often handled at municipal levels. Some cities may even have a beer board. This board determines not only who obtains beer permits, but also handles disciplinary matters that arise when the requirements to maintaining a beer permit are not met. These requirements can be as difficult or as easy to meet as the city dictates. For example, a more conservative city may require beer permit holders maintain their food sales at a minimum of 60 percent of overall business. Such a requirement is designed to make it difficult for certain types of bars or lounges to thrive and thus encouraging the growth of more family-oriented establishments.

Liquor License

For a lounge that wants to sell liquor and mixed drinks, a liquor license is required. Called an ABC License, these are handled at the state level and often have requirements for food sales not unlike those found with beer permits. In Tennessee, for example, an establishment with an ABC License is required to have a minimum of 50 percent of overall business come from food sales.

Business License

This is a standard form filed with the local city or county government. For most businesses, this is easy to obtain. Some cities even give businesses a grace period to file for the permit after the establishments open for customers or clients.

Use and Occupancy Permit

For people who are not only opening a lounge, but are building out a leased space or an entire structure to house the business, a use and occupancy permit is required once all inspections have been complete. After this step, the business license can be pursued, as can beer permits and liquor licenses.

About the Author

Eric Miller is a newspaper reporter based in Middle Tennessee. His crime and government articles appear regularly in several publications in Sumner County and the Nashville area. He has a natural thirst for knowledge and enjoys sharing what he learns.