Howard Goldstein

Howard Goldstein
'The New Jersey Liquor License Expert" - click on picture to go to my web site

Friday, September 21, 2012

Common misconceptions about New Jersey Liquor Licenses

1. Buying a New Jersey liquor license is a "good investment".

It can be, but the primary purpose of buying a license is to increase the value of the underlying business. One should not speculate or invest in buying a license unless his purpose is to use that license in creating value in either a package store or restaurant venture.

2. The value of New Jersey Liquor Licenses always goes up.....completely untrue.

In 2008, restaurant 33 plenary  retail consumptions licenses in one New Jersey community, sold for $450,000. Two years later the same license sold for $75,000. Now five years later, the NJ restaurant 33 license is selling for $275,000.

3. I can always sell my 33 restaurant license or plenary retail distribution 44 license.

Yes you can sell it.
The question is, who is going to buy it?
What is your exit strategy?
I have seen investors and owners sit for many years with a New Jersey liquor license before it trades. Before investing in the license, one must critically analyze the market in terms of license availability, competition, and population demographics.
REMEMBER, a NJ liquor license is an ill-liquid investment.

4. The New Jersey liquor license, once purchased, is good forever.

Yes, the 33, 32, 44 NJ liquor license can be renewed forever.
The caveat is that it must be in use in a location.
The New Jersey Alcoholic Beverage Commission, better know as the NJ ABC, has very specific rules on how long the liquor license can be renewed.
See my BLOG from January 2012 for more information on "pocketed" liquor licenses, or click on this link: 

5. Transferring a NJ liquor license is a "quick" process.

Rubbish....allow 4 to 7 months to transfer a license through the approval system.

There are a million reasons for this:

1. Background checks on the state, local, federal level
2. Searches for liens and encumbrances
3. Approval of local municipalities by their city administration
4. Notice in local newspapers
5. Under-staffing and budget cuts in municipalities, fewer workers to do the paperwork

All this add to the time frames.

Howard Goldstein, in the office

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Call me at 908-403-2718