In this episode, Sarah covers the basics of operating your mobile bar without a liquor license and best practices for setting yourself and your business up to mitigate risks. She speaks on legally handling alcohol, contracts, and insurance. If you're just getting started and feeling like getting a liquor license is an uphill battle, this is the episode for you. And the answer isn't to find the loopholes, trust us, there are no loopholes here.
Insurance Blog mentioned in this episode:
Mobile Bar Insurance - What You Need and How to Get It
JOIN THE MOBILE BAR ACADEMY
https://mobilebevpros.com/join-mobile-bar-academy/
WORK WITH SARAH
www.mobilebevpros.com
JOIN OUR FREE FACEBOOK GROUP
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CONNECT ON INSTAGRAM
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FREE MASTERCLASS FOR MOBILE BARS
www.mobilebevpros.com/masterclass
In this episode, Sarah covers the basics of operating your mobile bar without a liquor license and best practices for setting yourself and your business up to mitigate risks. She speaks on legally handling alcohol, contracts, and insurance. If you're just getting started and feeling like getting a liquor license is an uphill battle, this is the episode for you. And the answer isn't to find the loopholes, trust us, there are no loopholes here.
Insurance Blog mentioned in this episode:
Mobile Bar Insurance - What You Need and How to Get It
JOIN THE MOBILE BAR ACADEMY
https://mobilebevpros.com/join-mobile-bar-academy/
WORK WITH SARAH
www.mobilebevpros.com
JOIN OUR FREE FACEBOOK GROUP
https://www.facebook.com/groups/mbpgroup
CONNECT ON INSTAGRAM
https://www.instagram.com/mobilebevpros
FREE MASTERCLASS FOR MOBILE BARS
www.mobilebevpros.com/masterclass
Sarah: So today on the podcast, I have Dawn Hensley who is actually Mobile Bev. Pros COO and Chief Alchemist. And we're gonna talk today about a variety of different things, including risk mitigation, legalities. Insurance common mistakes people make during their startup phase in regards to all three.
But first I wanna introduce Dawn she's been around for a number of months, but she's never been on the podcast. So welcome to the Mobile Bev. Pros podcast, Dawn.
Dawn: Thank you so much. Hey guys it's such an honor to be here. I'm so excited. And today I'm gonna be interviewing Sarah and so I'm gonna be highlighting her genius for you.
Sarah: Yeah. I'm really excited about that. When you propose doing an interview of me on the podcast, I realized that I had never been interviewed on any podcast. And so this is an exciting opportunity for myself as well.
Dawn: Especially because you are the genius of all things, mobile beverage.
And so I'm super excited to highlight that genius for.
Sarah: I have actually very intentionally set a goal of being the most knowledgeable person in the world around mobile bars. It is a very intentional goal of mine to be the person who knows more than anyone else around this topic.
Dawn: And today you guys get to see that, so super exciting. Okay. So Sarah today we're gonna start with liquor license, because when we went to DC, it was really highlighted for [00:02:00] me that a lot of people who are new to the business, do not fully understand how to operate the business without a liquor license, nor do they realize that it's actually more common for mobile beverage businesses to operate without a liquor license, then it is for them to operate with a liquor license. And so I wanted to touch on that for the audience. If you could give us a little more information on what it looks like to operate without it and why it is more common to operate without it, than it is to operate with it.
Sarah: I'm actually gonna answer a third question first and then I'll go back and answer the other two.
So the third question is why do people assume you have to have a liquor license in order to operate successfully in the mobile bar sphere? I too, when I first started my mobile bar journey, thought that I had to have a liquor license and every time I would do the research as to how people were operating, it required a [00:03:00] license that wasn't available in any state.
They had very specific licenses. They had catering licenses, they had retail licenses and they had restaurants and on premise liquor licenses. There was nothing specific to mobile aside from catering, but catering required the service of food.
So it was like roadblock after roadblock as to how this was possible. So for two years, I kind of just sat on the idea. Then I saw a mobile bar in Australia on Instagram, and they were very specific in that Instagram post as to how they handled alcohol, which was, they helped facilitate the order.
They would give 'em a shopping list, but they would not take payment for the alcohol. And that completely blew my mind. That was the missing piece of how you could operate this legally. And that was not to have anything to do with the sale of alcohol, but [00:04:00] merely to provide the service of pouring as well as the equipment, the mixers, all the non-alcoholic components.
The vast majority of mobile bars in the United States operate with that model. Now, when I first started back in 2016, there weren't nearly as many mobile bars on the scene back then. So there were a lot of people that were in the market as caterers. So they had partnered, or they were an extension of a catering business.
And so the mobile bars that were in the field at that time, the vast majority of them did have access to liquor licenses. Further confusing the fact that you could do this, but without a liquor license. Now we have lots of examples out there of people who are operating successfully within almost every state.
Without a liquor license. Oddly enough, I've never met a mobile bar owner in West Virginia. So if you're out there West Virginia, reach out and say hi, because I've got Alaska [00:05:00] Hawaii. I've got every state in between, nobody in West Virginia. And it's possible that they have regulations that prevent the service of alcohol without a liquor license, which might be the reason why, but every other state does have provisions that allow for people to serve alcohol without a liquor license, as long as they're not the ones that have purchased it or are not selling it. And so that's why it's such a common misconception that people need a liquor license and the way in which you can operate successfully without a liquor license is to provide everything else associated with a successful mobile bar experience except for the alcohol.
And so oftentimes what that looks like is people putting together packages that include things like the bartenders, the ice, the cups, the napkins, the mixers, the rig [00:06:00] rental. The decorations, even in some cases, but no alcohol, but they'll help you put together the order they'll calculate your quantities for you.
They might even match, make you with a retailer that they have a relationship with and can provide delivery, but no funds from the sale of the alcohol ever pass through the mobile bar. And most states have specific regulations that flat out prohibit the transaction of alcohol, even if it's at cost.
So what that means is that if you say you want a hundred dollars worth of product, I go out and do the shopping for you and then I just invoice you for the exact cost. And I don't make a dollar many states, if not all, I'm not an attorney. So I can't speak to everybody's regulations. The ones that I know don't permit that. They basically say you can't even be a pass through entity at zero profit for [00:07:00] alcohol. They want all transactions for alcohol to be directly from the consumer to the retailer.
Dawn: So I'm fairly new to the mobile bar world. And I know that was really confusing for me initially because I would assume that because I'm a mobile bar that I would be absolutely handling the whole process. And so I think it really clears some things up to hear you say that I can collect zero funds for alcohol and I cannot be a pass through entity for alcohol.
And so all I'm doing is telling my client how much alcohol they're going to need for everything else that I've put together. And then my client has to be the one who pays for the alcohol from my favorite liquor store, potentially their favorite liquor store. And then do they bring it to the event?
How does that work? Like can I go pick it up or what does that look like?
Sarah: It's really [00:08:00] state specific. Some states are what we call ABC states, meaning you have to purchase all alcohol from a government regulated retailer. Those locations have less flexibility as to how you can do it, you can't go to a favorite retailer. You can only go to the retailer that exists. And so there are some states wherein you can offer almost like a concierge service where I'll put the order together, the quantities I will email the order in, they will then put together the total. You, as the customer will call the retailer and provide your credit card information, they will charge it.
And then the retailer will then pick up coordination with the mobile bar as to where it should be and what time it should be delivered. Other states retailers don't deliver or won't deliver. And then you have to have someone from the wedding party, pick it up. Most states don't allow the mobile bar to transport it.
And I say that [00:09:00] not knowing the actual individual legalities of every single state, but in my experience, most states require a specific license called a transport license. At least that's what it's called here in Tennessee, to transport alcohol, that is not your own. I think this is a holdover from prohibition. I've not looked into this. This is not fact I'm not an attorney. I dunno. Anything about where these laws came from. But I think it has something to do with during prohibition people were making moonshot in the mountains. They had no idea where, so they couldn't like nab 'em for that. And then the alcohol would be in people's hands all of a sudden.
And so they're like, well, how do we catch these people? Oh, let's make it illegal to transport the stuff. And then if we do find somebody that has possession of large quantities of this, then we can go through the legal process of, putting him in jail or whatever. But again, that is just that's my urban legend that I'm going to put out there into the world and maybe it'll catch on.
And someday, it'll become just common knowledge.
Dawn: So what are some of the common mistakes that you're seeing people [00:10:00] make? Let's start specifically with liquor. What are some common mistakes that people are making around having or not having a liquor license, transporting the liquor or even handling it? Are you seeing any super common mistakes there?
Sarah: Yeah. There are a number of things that come from the misunderstanding of how the liquor laws work and that is not the fault of the well-meaning mobile bar owners. In my opinion, the government does a very bad job of explaining in layman's terms, which let's be honest have you ever read through the legal code? It's mind numbing and they use terms and phrases that just aren't common knowledge to most people. And it's not our fault that we don't easily understand them.
I have this like little anecdotal story. There was a mobile bar owner who started selling... here in middle Tennessee, where I'm very familiar with the laws, I am married to an attorney so I'm very familiar with local [00:11:00] regulations and they were selling boozy popsicles. Now I happened to be friends with this mobile bar owner, and I thought that was one, an awesome idea, but two, I couldn't quite figure out how they were doing it.
And so I just reached out to her and I was like, "Hey, this is really cool. I would love to buy some Booy popsicles, but also how are you doing it?" And this was pre COVID. So we didn't have the like special regulations that have since been permitted in a lot of ways to do delivery of alcohol in a, single beverage way.
And she said, well, I read the code and it allows for you to sell alcohol as long as it's under 5%. And I asked her to please send me that code because I read through the code backwards and forwards, and I've never seen this provision. And so she sent me just the little like paragraph where it said that and that in that paragraph, it had the larger code number.
So If you've ever dug through the code, there's [00:12:00] one number. And then another number is like a sequence on number is almost kind of like a file you can go back so you can read the full code. So I did, I just looked up the whole code and this particular provision of the code was specific to onsite on premise license holders that were providing components of a larger dish that had alcohol in them. Think about pineapple upside down cake with a rum sauce now because they were selling something that was largely non-alcoholic, but it had a sauce that had a small amount of a alcohol in it. They had to make a special provision in the code to make that legal.
What she had overlooked was the fact that it was actually a part of the code that only pertained to people who had onsite on-premise licenses.
Dawn: Sarah you've said that a couple of times, and just for anybody else who may be wondering what is an onsite [00:13:00] license an on-premise license. What does that look like?
Sarah: So an onsite license or on premise license is a restaurant or someplace that does not move. We always only serve out of these four walls. And so you, in most states can't leave the four walls with that alcohol either. It's like you drink it here or you're done. I can't sell you a six pack up until after COVID, which they have this special provisions.
Like when all of these laws were made you couldn't just hand someone a six pack with their, leftovers and say have fun. In most states, there are some states like Louisiana where things are just, wild, but most of the states did not have that option. And so an on-premise license means you can drink it here. But you cannot take it outside the door, then you have retail licenses and those are the opposite.
You can take it home. You can't drink it here. And so the third liquor license option is catering. And so that was specifically designed to be provided to people who are serving food, doing things like [00:14:00] events, wherein you've got a full execution of an event outside of four walls, or that could be inside of four walls, but at a venue that wasn't necessarily set up for full-time service as a food and beverage venue.
So you were serving food just like you would at a restaurant. So you should be able to serve beverages just like you would at a restaurant too. And so they just continued to bundle that together. It's an onsite and an offsite license, right? You can do the same thing you do in a restaurant, but offsite.
And so those historically have been the common types of liquor licenses. Now, there are some states that have like a dozen different types of licenses that get super, super granular, but those are the main three types of liquor licenses. There's also permits that are available or single day licenses in many states that you can apply for and get, if you meet certain qualifications, most states you have to be either a political organization or a nonprofit.
Some states will allow you to do [00:15:00] just a single day license as whomever you want, like Oregon, for example, you can get single day licenses. You only need like four weeks notice. And I think like a notarized application that says food will be available, and this is the vendor who's going to be providing it.
But that's really the only state. I think Georgia, you can get a certain number of them too, but most of them, the single day licenses are pretty hard to get. So that leaves people with saying what license, should I get. And the reality is if you do want a catering license, you have to serve food.
In most states, you also have to have your own kitchen. You have to basically set yourself up as a caterer. And that's kind of expensive. And one of the reasons that people get into the mobile bar scene, I think is because the overhead on starting a mobile bar is so much lower than it is to become a caterer or to set up with a brick and mortar location. So it kind of makes that unachievable.
Other mistakes that I see people make [00:16:00] around alcohol in general in the mobile bar capacity is assuming that they can operate with what they perceive to be loopholes. There are no loopholes in the liquor laws. They've had a hundred years to close all the loopholes. There just aren't any left.
So, if you are operating with what you think is a loophole, you're probably doing it illegally, whether you know it or not, you might have the best of intentions. I know of a small operation, I think out of Kentucky, that during COVID started selling one of their, I can't remember what type of alcoholic beverage, but it was of their home country and it had alcohol in it and they started selling it on Instagram and I don't even know what their reasoning was.
Maybe they just didn't think about it at all, but they ended up getting busted and fined. It was definitely not worth however much money they made off of that beverage. I've also seen a lot of people try and sell pouches like the little [00:17:00] adult Sunkissed beverages on their Instagram.
Even if you have a catering license, you cannot sell off Instagram like that. Most of the provisions post COVID have allowed onsite on premise license holders to sell individualized portions of cocktails. Most of them also require every one of those sales to be accompanied by a meal or some sort of food.
So if you're just, willynilly selling capris on pouches with alcohol in them on Instagram, chances are, that's not legal. Another thing that I see people do is put a whole bunch of alcohol in a keg with a mixer at an event. And then take it home with them that, I mean, that's not necessarily legal, but it is kind of stealing because you don't own the alcohol.
So they're like, well, how am I gonna give it to them? It's in a keg. That's a [00:18:00] really good question. So if you ask them and they say, yeah, go ahead and take it then you can take it, but you really shouldn't. It should just go with the person who owns it, which is the person who purchased retail for the alcohol.
Dawn: So a few clarifying questions here because that's a lot for me to take in when I'm first starting my mobile bar. Now, I have to all of a sudden be a lawyer and be able to read codes that are not written for me to understand.
So obviously what I'm hearing is that best practice is that I am hands off the alcohol until it arrives at the event. But I'm curious if I don't have a liquor license and I do wanna know more about my state specific laws around the purchasing and use of, and distribution of alcohol, where would be the best place for me to find that?
Sarah: Yeah, ironically, the best place to find it would not be to call your [00:19:00] state's liquor board. Now that doesn't mean you shouldn't call your state's liquor board. You should. You absolutely should. However, they're very much about " we operate knowingly in the realm of the boxes that have been created, and those boxes look like license types that are onsite on premise licenses, offsite licenses, and catering licenses, and then whatever other, special event licenses, that sort of thing. When you start calling them and asking, "well, I'm a mobile bar." The minute they hear that, they're thinking you're driving down the road, like an ice cream truck and slinging margaritas.
And so everything is, "you can't do that. You can't do that." I've even heard stories of people who will reach out and say, the liquor board called me and said, I can't even pour without a license. And in most cases that's not true. But they're looking at such a [00:20:00] narrow part of the law that's like, they just don't know the depth of it. Even the people in the board.
And I know this because I'm married to an attorney who was an attorney for a state board. The people that were interacting with the customers that were calling, they weren't calling my husband the attorney for the board.
They were calling customer service agents that were, in charge of representing the customer and the board to the public. They didn't know the law, so they would regularly have to talk to him and he would have to clarify the depth and the complexity of the law.
So the vast majority of the people that you're gonna talk to when you call your local liquor board, don't know the details of the law, they know the most common questions that they get asked, and it's not from mobile bars, right? They vast majority of the questions that are getting asked are by people who want, are seeking, or have one of their very standard licenses. You probably don't have a license.
And therefore you probably won't be dealing with [00:21:00] what they're regulating, which is the sale of alcohol. So your best bet to get that information is to work with an attorney that is familiar with your local liquor laws. That person will have a vested interest in reading the entire code and the parts that are applicable and related to your intended operations.
You're paying them to care. Whereas when you call the board, they're regurgitating the information that they have at hand that is applicable to most of the people that reach out to them. So hire an attorney if you're really, concerned and interested in knowing exactly what your liquor laws are and how to function within them.
We've done that. Numerous times when it came to partnering with someone who had a liquor license. Now we don't have the license. We couldn't accept money in the sale of alcohol, but we wanted to work with them as their service arm. And so, we hired an attorney to tell us [00:22:00] how we could structure that contract so that if the ABC board ever was to like, look at our arrangement, they could say, yeah, that's above board.
Now, that's not a loophole. What they were doing is they're saying, yes, this entity can hire another entity for service. We were almost like a 10 99 scenario where we were staffing their events, so they would pay us and the customer would pay them. And so, but how we arranged the terms between the two of us, how would they pay us?
The ABC board was very clear in that it could not be a percentage. We could not be paid a percentage of what they were making, because then it was almost as though we were making money off of the sale of alcohol. And that's what the law says you can't do because we don't have the license.
One example they gave us was that like, we could get paid a dollar per drink that we served, but we couldn't make 10% of the revenue from that drink. So they're saying that we can be paid a [00:23:00] dollar, irregardless of what that drink cost or how much money was made off of that drink, but we couldn't get paid out a percentage of the revenue.
So, I mean, it feels very like why are you splicing these hairs, but the law very much has its rules as to how it would be interpreted. And some of it's kind of what I call squishy in that even an attorney or the board themselves, might say, yeah, if we were to look at that, this is how we would probably interpret it.
But five years from now, there's a different person in that board seat. They might interpret it different. And that's one of the downsides of the law is that it's all really interpretation.
Dawn: I'm curious about tips. Can we collect tips for our bartenders that has nothing to do with the alcohol?
So if I have a tip jar out front, my bartenders are pouring. That is not the service of providing any type of alcohol. So is it legal for me to accept [00:24:00] tips.
Sarah: Generally recognized, yes. And like I say this as I'm not an attorney, and this is not legal advice, and please don't rely on this to take any action within your own business, but generally. People can provide tips or gratuities for service. You don't typically tip people in exchange for alcohol.
Now what was handed to them might have contained alcohol, but I think if you were to look at the general concept of tipping, it's in gratitude for the service provided not the product provided.
Dawn: I see, this has been incredibly valuable. Do you have anything else that you wanna say around liquor licenses?
Sarah: I think just in, in summary, It's important for mobile bar owners that are just getting started and potentially are very overwhelmed with the concept of navigating all of these rules and regulations that they start off by establishing their packages, their pricing [00:25:00] and their service offering in a way that makes it very clear that you are a facilitator of bar experiences, that you don't provide alcohol, that you can serve what is provided.
You can help guide people through what a good bar experience would include, but that you do not accept money for nor do you purchase or provide any alcoholic, beverages, period.
Dawn: That actually opens up for me another question, a follow up question around if my uncle Joe wants to bring his own tequila to the event.
How does that look? Is he allowed to just drink it? Am I liable if he's just drinking it? Do I have to be the person who is serving all alcohol at the event? What happens if somebody sneaks it in their boot? What does that look like?
Sarah: That's a great question.
It's actually a really good segue into what I would consider like risk mitigation. [00:26:00] So I'm gonna pause on responding to that question, cuz I do wanna just tie a bow on the liquor specific conversation. So. Make it very clear to people that you are a service and you are not selling alcohol.
That includes and is not limited too. When you say as a mobile bar owner, that you have different packages and one of them is beer and wine, anybody who's spent any time trying to develop their packages and are looking at other people's packages and they'll say beer and wine service. If you're a consumer, it is very easy for you to assume that a beer and wine package includes beer and wine.
Even if you say like asterisks "does not include beer and wine", then you're like, well, why do you call it a beer and wine package? Any amount of phrasing that you utilize in your offering, your packaging or your pricing that references alcohol has the potential to confuse your clients. And make you a target [00:27:00] of the liquor board. And if you don't think that the liquor boards are out there, scouring websites, they are.
I very specifically have received phone calls from mobile bar owners who say the ABC board saw on my website that I offer alcohol delivery. And now they're saying I'm operating illegally. They're looking at your websites.
So I would change the verbiage of that to "pour service" instead of "beer and wine service" or a "pour package" instead of "beer and wine package". Because what you're trying to convey is that this package includes the service of anything that just requires me pouring something into a glass or popping the top off. You're just pouring.
And so like call it what it is instead of trying to utilize words like beer and wine, because it makes you a target. And it also muddies what you're trying to convey to the client, which is it does not include beer and wine.
Dawn: Yeah, I love that. Thank you for clarifying. And so, we will move on [00:28:00] to risk mitigation and I'm so excited to hear about my uncle Joe with his liquor bottle in his boots.
So tell us a little bit about risk mitigation and some of the most valuable pieces that we need to know. And then of course, like if there's any common mistakes you're seeing your mobile bar clients making.
Sarah: So first of all, I wanna say when it comes to risk mitigation, it's really important that every mobile bar owner recognize, that they are serving a controlled substance and that requires an elevated level of responsibility on your part. This is also why in most states they require you at the state level, if you are serving alcohol on behalf of any entity, to have a server's license or a server's permit. It really depends on what state you're in. It may be called a T-ABC license or an ABC license.
I also really detest that they call 'em licenses because it really confuses people. [00:29:00] And by people, I mean, bartenders or people who are hiring bartenders, that they have a license, therefore they can sell. You cannot. Because a server's license is very different than a liquor license. And it's so close. How would you as a normal person, not assume that a license is a license, but they're not. I would very much prefer that they call it a server's permit, just like a driver's permit.
I don't know. They also call 'em driver's licenses. So I don't know. I don't know. We need more words in the English language to say things. If you have a server's permit or a server's license, that means that you have been approved by the state to serve alcohol. And that means that they have instructed you the bare minimum of what you should know in order to serve alcohol to people responsibly.
They usually in those classes teach [00:30:00] you signs to look out for intoxication, about how many ounces of every type of spirit you can safely serve someone before you need to be like monitoring their behavior. Not everyone responds the same to alcohol. They talk about the fact that some people process alcohol faster, some people process it slower. Some people can be completely drunk and you wouldn't know it. And other people could not be drunk and look at or act it. And how we are basically the middlemen that have to use our very human discretion as to how we're gonna serve alcohol. They also teach you how to spot a fake ID and card people so that you're only serving alcohol to people who are legally of age.
And so the ABC, which is like in some states four or five hours, some states even less is just like, Hey, you can now become a bartender and go work for a restaurant or a caterer or something like that. It does not permit you to sell alcohol anywhere, on Instagram, in your packages. I've seen it a lot where people are like, but I have a license and I'm like, you have [00:31:00] a server's license, which is very different. And so the rule of thumb that I tell people is that if you are paying sales tax as a part of your license, then you can sell alcohol. If you're not paying sales tax as a part of your license, then you don't have a license to sell. You just have a license to serve.
Or conversely, if you can call a distributor and they will give you alcohol, then you have a license. If you call a distributor and they're like "let me see your license" and you send them your service permit and they're like, "no", then it's not a license to sell. So we're all on the same page that controlled substance is a highly regulated responsibility and that we have a responsibility to ensure that we're doing it safely. Most states require you to have that permit to say "Hey, we've taught them how to do this safely".
It also means that you are one of the three parties that'll likely get sued. If something is to go south with an event.
Let's say, either at the event or after the event, someone gets in a drunk driving accident or someone gets in a fight in the [00:32:00] parking lot, or somebody slips and falls and cracks their head open or is injured in some other way. They're probably gonna sue somebody because it's America and that's the what we do, sue people.
There are three people that they're gonna go after, not them, but the insurance company or their attorneys that they hire to go after you, it will be the venue cuz they provided a space for the alcohol to be consumed, they will likely sue the mobile bar because that is who served it and they will sue whoever paid for the alcohol and actually provided the alcohol.
So those three parties will likely get sued even if there was no liability by any of them or by one of them. It's the process of defending yourself that's super expensive.
And so to prevent you from being put in a position where somebody does injure themselves or to protect yourself in a situation where you do get sued and you have to prove that you did everything you could to act responsibly we can have and implement risk mitigation techniques.
The most common of those that we hear about are things like " I don't serve [00:33:00] shots. I don't serve anything neat." And if some bars will serve shots and they will serve things neat, there's nothing wrong with it. There's nothing illegal about that. And so oftentimes people will say, "oh, well, our insurance won't let us serve shots."
That's not true. Your insurance really doesn't care if you serve shots or not, they don't even ask if you serve shots, but you are increasing your likelihood of using your insurance. And we don't necessarily want that. So by saying we don't serve shots and we don't serve things neat it really sends a signal to your client that if you're looking to get crazy, I'm not the mobile bar for you. And that enables you to prevent in many ways of taking events that do turn into. raves or crazy t own. The other thing that you can do to increase your risk mitigation is to be very strict about cutting people off.
I can't tell you how many times I've cut people off. Probably 90% of the events that I have done, over 400 events, I've cut someone off. It's usually the best man. [00:34:00] Sorry, best men. You guys just, you don't behave. In one case I had to cut the best man off an hour into the event, cuz he was, pre-gaming so hard and he had a speech coming up and nobody could understand him.
He was like slurring so badly that it was very embarrassing for everybody involved. But we cut him off very quickly and he was great sport about it, but some people aren't, they aren't great sports about it. And so training your team, how to handle cutting someone off, especially when that someone that you're cutting off might be the person who owns all the alcohol. "I'm the father of the bride. I bought all this alcohol." I understand that. But if you continue to consume, we have to pack up and leave. That's just, that's a part of like our agreement. So making sure that you have that in your scope of work in your contract that we will not serve intoxicated people, you do cut people off who have been clearly served to the point of feeling happy. And that if anybody pushes back that you have the option of just leaving because your business is at stake if things are to go south.
Dawn: So I wanna circle back [00:35:00] to my uncle Joe and his tequila and his boot. And can you tell me how do I handle that? If I'm supposed to be cutting people off, when they look boozy and things are getting crazy. My uncle Joe, he has tequila in his boot. He bought the tequila. I'm not serving it. But I am responsible for the alcohol at the event. So how do I handle that?
Sarah: Yeah. Great question. So, I started off this by saying, like, recognizing that there's an immense amount of responsibility that we take on as bartenders serving and being responsible for controlled substance. And this extends to alcohol at the event that is not in our possession.
And so while we can't legally force anyone to give us their alcohol, I do like to put in my scope of work, that all alcohol at the event needs to be behind the bar. Now, if you have a liquor license and you're operating, then it is technically illegal for you to serve alcohol that is not something that you've [00:36:00] purchased.
So you would then take uncle Joe's tequila. You'd place it behind the bar and you'd promise to give it back to him after the event. It mitigates your liability to know that you have control over all the alcohol so that you can cut off uncle Joe when he is intoxicated, visibly. If you don't have a liquor license and you're serving, then you can just say, "Hey, uncle Joe, I will keep the tequila behind the bar and I will serve you whatever amount of tequila you want responsibly."
And that becomes the conversation. Now, if uncle Joe does not wanna give up his tequila, you can through your contract, actually protect yourself by saying that if you don't have full control of all the alcohol in the building, that you have the option of packing up and leaving. And that usually becomes a conversation with uncle Joe, where it looks like this, "hey, uncle Joe. I need to take possession of your tequila. I'll keep it behind the bar. I'm happy to serve you from the bar. But if you don't give me the tequila, then we [00:37:00] might have to shut down this bar and I'm pretty sure the host of the event is gonna be really upset about that. And it is a part of our contract that if there's alcohol at the event and not in our control, then we have the option of leaving because we cannot be responsible for what we cannot manage. And we're currently responsible for serving the alcohol and making sure that people are taken care of. And we can't do that if you've got tequila in your boot.
Dawn: Mmm. That's so good. Thanks so much for clarifying that.
That brings up another question because one of the most frequently asked questions that I've seen in the Facebook group and we have so many great questions that come through there. And this too is a great question. I would love for you to touch on it is when people are having the Facebook group review their contracts, and that happens, often people come in and they have questions about their contracts and they're just crowdsourcing that information. And that can be really dangerous, right?
Sarah: Oh my gosh. Yes. Now, I understand why people do this. I [00:38:00] do. I'm married to an attorney and before he was an attorney, I too was like, well, where do I get a contract? For my business. And so there are places like legal zoom. There are a number of like online places, but when you're first starting your business, it even like the $99 bucks or the $149, whatever it is, they're charging for, those seems like a lot.
So you're just like, well, I'll just go ask somebody who already does what I do, who has a contract. But what happens there is that we're perpetuating a bunch of shitty contracts over and over again, because they did the same thing. They just asked somebody and they got it. And they're like, but who originally had that contract?
And did they pay an attorney to look at it? And is it specific to your state and does it have all the necessary clauses that you need to protect your business? How good was that attorney? You don't know. You don't know who it was. It could be 10 mobile bars back.
And so, one of the biggest investments that people are gonna make in their business is hiring someone who is barred in the state that they reside and is familiar with [00:39:00] the laws of your particular industry and can support you in personalizing and customizing the contract so that you are protected.
The contract is potentially a life saver for your business. And it is an agreement of behavior almost between you and your client. And believe it or not, I've encountered many mobile buyers that don't even have contracts. They just kind of show up. And then COVID happened. And then everyone's like, well, I guess I should have had a contract because now , I'm in this really awkward position where I might have to refund all this money because I don't have an agreement in place. And so I think people are much better at getting contracts now, but they're still trying to cheap out on getting a contract that really applies to them and their needs. And so I do recommend very much having an attorney review it.
I do not recommend crowdsourcing legal advice because people are very good about giving bad advice, well-meaning advice. But I've literally had people tell me in the Facebook group, they're [00:40:00] like, this is what my cousin told me. And my cousin asked her attorney. Well, that's a game of telephone because we're really trusting that your cousin understood correctly and then communicated it correctly.
And in this particular case, it was absolutely 100% not correct in interpretation. You're starting a business, and again, this is the Mobile Bev. Pros podcast, so if you're out there and you're a hobbyist and you're just winging it, this is not the podcast for you.
Like, I will always be giving and recommending how to run this like you are meaning to take over your industry. Like you wanna be the top dog in your industry, I can't very well recommend you do that by skimping on the legal costs. And so whatever you're paying your attorney is going to be worth it.
Especially if they have specific knowledge around the industry and how to draft contracts in a way that's gonna protect you. So definitely do not crowdsource your legal advice.
Good to know. What are some of the types of insurance [00:41:00] that I should be investing in for my mobile bar when I'm just getting started?
Yeah. So I actually have an article on this, on the blog and see, we can link it in the show notes, but in general the types of insurance that you're gonna want, you're gonna want general liability, you're gonna want liquor liability, you might want inland marine, if you have a mobile bar that has a bunch of installed equipment, that if you were to get in an accident and it got destroyed, you'd really want help replacing. So if you've got like a large refrigerator in there or anything that's super expensive, you'd want inland marine, you're going to want commercial car insurance that really protects you when you are on your way to an event or on your way back from an event. And especially if you're towing a rig, you're definitely gonna want commercial car insurance on that.
Personal car insurance may or may not cover you on if you were utilizing your tow vehicle or the rig itself for business purposes and insurance companies are always looking for a reason [00:42:00] not to pay and that is a very easy one for them to say, "oh, this is for business purposes and you don't have a commercial policy, so we're not covering you". Lastly worker's compensation.
Dawn: And what if I don't have a rig? What if I'm just getting started? I have like a satellite bar an old dresser that I've converted.
And I'm not towing a Shasta. What does insurance for me look like?
Sarah: It looks exactly the same. You would just likely get away with having personal car insurance instead of commercial car insurance. But again, if you got in an accident using your vehicle for business purposes and you only had personal car insurance, they may not cover you.
Dawn: Awesome. And so are there any other tips that we need to know about when we're just getting started to mitigate risk?
Sarah: Well, to recap what we've talked about so far, have policies in place that ensure that you aren't serving irresponsibly. And those are policies not [00:43:00] necessarily laws. Like you don't have to tell people that it's illegal to serve you shots, but make sure you have policies in place that enable you and your team to serve responsibly.
Have a contract that protects you and is, an attorney reviewed contract. Even if you grab the one off the mobile bar academy, that's an attorney reviewed contract, but we very specifically say use this as a template to take to your attorney because every state's different and they may want different words.
They may wanna add clauses. They may wanna take things away. So you can use it as a template. And I can't tell you how many people come to me and say, "Hey, I provided your attorney reviewed the contract to my attorney, and he literally thanked me. He's like, this is exactly what I needed." And instead of me paying for three hours of attorney time, I only had to pay for one hour of attorney time, so it saved me a ton of money.
So it's okay to start with a template, but definitely make sure that it, you have it reviewed by an attorney before you use it. And then three have the proper insurances because you can't mitigate [00:44:00] all risk. But if you do have to go through a lawsuit or something like that, having insurance will help you cover the expense of that so that you're not having to pay out of pocket and potentially have to close down your business.
The other thing that I would say that helps mitigate risk is to form as an LLC. Now, I'm not gonna go into all the craziness about like tax code and like laws and everything. But in general, an LLC creates what they call a corporate veil. And that means that the law has to treat your business as a separate entity than yourself.
And so if you do get sued, they can't take your house because your house is owned by you, the individual, and the business does not own your house. And so, as long as you have that corporate veil and you haven't, blurred the lines too many times, then they can only sue the LLC. Because you were operating under the capacity of your business and not your person.
So if you are a hobby bartender, and you're just out there as [00:45:00] Sarah Murphy slinging drinks and something happens, they can come after me and my house, my business, because my business, is owned by me. Like they can come after it all. Whereas if I'm out there operating as, Bar Magnolia and something happens they can only come after Bar Magnolia.
Dawn: That's awesome. I don't wanna lose my dog in the lawsuit. So this has been super valuable, Sarah. Oh my goodness. Do you have any last words for us before we close?
Sarah: Yeah. In closing, if you are left at the end of this and going, man, I wish I could know more about this, or I wish that she had gone deeper into that, I highly recommend joining the mobile bar academy. It includes in depth lessons on every single one of these topics, insurance risk mitigation, the laws.
And not just me talking about it. We have lessons in there where insurance brokers are talking about insurance and attorneys are talking about the laws and contracts.
We actually have an in depth, [00:46:00] potentially boring webinar that talks about every single clause that you should have in your contract and why it's there. So we go super granular in the mobile bar academy and there's just no better resource in the world for mobile bars than the mobile bar academy.
So, I do highly recommend checking that out if you haven't already. And then aside from that, I'm just excited to kick off season four of the Mobile Bev. Pros podcast.
Dawn: Definitely worth the investment into the academy. Super excited for season four. And thank you so much, Sarah, for covering liquor licenses and risk mitigation for us today.
This has been super helpful and I'll see you on the next one.
Sarah: Yeah. Thanks for co-hosting Dawn.