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Non-monetized Liquor Licenses?


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#1 joechartreuse

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Posted 12 April 2018 - 05:30 AM

        Though not a restaurateur, I have have been associated with the business most of my adult life.  Bartender, manager entertainment, part owner, and way back when- a provisions broker.   

       I have owned a few successful businesses besides as well.   The one firm rule that I have always followed is "If an asset isn't monetized, it's not an asset."

      All of that being said, I am hoping for a bit of an education from those in the know.

     We all know that full liquor licenses can be extremely expensive here in NJ.  An investment of this sort would seem to need some justification.   Of course I have seen and actually participated in the saving of restaurants on a shaky start by these licenses.

   A full license can be a huge second income  ( or even first, considering that the profit margins on liquor are so much higher than food) for a restaurant.

    OK, my question:    I have seen a disturbing trend wherein restaurants with full bars are closing at the end of service.   This is not a decision based on town regulation.   None of them  require a ten o'clock closing.     

    This would seem to be extremely counter-productive as not only are they taking much longer to hit a break-even point, in some cases said license is running at a constant loss to the restaurant.

     Why- with proper marketing- would anyone take a pass on several hours of high profit sales?   I have seen several of these places fold - in my opinion, just because of this.  

   What am I missing here?  I truly cannot come up with a logical answer.  Help?


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#2 Sneakeater

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Posted 12 April 2018 - 05:33 AM

I can't speak to New Jersey, but I feel that all the restaurants in New York are doing this just to spite me.


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#3 Tubbs

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Posted 12 April 2018 - 04:27 PM

Are there enough customers to support a bar scene? You still have to pay a couple bartenders, electricity, etc.

#4 joechartreuse

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Posted 12 April 2018 - 09:22 PM

Are there enough customers to support a bar scene? You still have to pay a couple bartenders, electricity, etc.

    

     There are always plenty of customers out there.  If marketed properly, they come in and spend.  As I stated, it's a matter of letting people know that you are open, and giving them a reason to come in.

      One owner of a newly defunct restaurant told me that "This town rolls up it's sidewalks at 9".   I grew up nearby and knew that this was not so. The town had no other full bar open late, so they just didn't get have a reason to stay in town for cocktails and went elsewhere.

     Having grown up in the area I know many of the residents and often see them out late at other venues  ( Remember, I work in multiple venues on various nights) - they DO want to go out after dinner.

      This place had a nice atmosphere, decent food, and a great location.  One of the nicest bars that no one had ever heard of.

I would add that the previous restaurant at that location did the same thing and failed as well.  The one before THAT stayed open and was successful until they sold it.

       I simply can't find a logical answer for spending thousands upon thousands of dollars for the license and not using it for the income that it could generate.


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#5 Orik

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Posted 12 April 2018 - 09:32 PM

So, buy a license and monetize it!

sandwiches that are large and filling and do not contain tuna or prawns


#6 joechartreuse

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Posted Today, 12:17 AM

So, buy a license and monetize it!

    This thread wasn't about me.  It is about owners with what seems to me a lack of business sense.  That is why I was asking in the first place.


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#7 Orik

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Posted Today, 01:45 AM

 

So, buy a license and monetize it!

    This thread wasn't about me.  It is about owners with what seems to me a lack of business sense.  That is why I was asking in the first place.

 

 

I understood what you were saying, just that as already mentioned, when you consider the fixed costs, additional risk (most sting operations, drunken folks, theft, etc. happen later in the evening) you end up needing a lot of customers... And then a cold, snowy night or in the case of this winter, a cold, snowy month, can be very expensive.


sandwiches that are large and filling and do not contain tuna or prawns