Requirements & Benefits of Holding a TABC Food and Beverage Certificate

Holding a Food and Beverage Certificate (FB) can be beneficial for certain permit holders. An FB Certificate can attach to the following primary retail permits: MB, BG, BE, N, NB & NE. 

Requirements to hold a TABC Food and Beverage Certificate.

There are 2 options to qualify for a TABC Food and Beverage Certificate:

1. The business meets the definition of a “Restaurant” – defined under §1.04(29) of the Texas Alcoholic Beverage Code as a business with permanent commercial cooking equipment on the licensed premise; or 
2. The business has a food preparation facility on the licensed premise and maintains more than 40% non-alcohol sales (less than 60% gross alcohol revenues) generated at the licensed premise, 

In addition to meeting the requirements of either option 1 or 2 above, the business must also have at least 2 entrees available for customers anytime alcohol is available for sale. See, i.e., Tex. Admin. Code, Rule 33.5. 

Prior to January 1, 2022, businesses had to maintain less than 60% alcohol sales at a location to maintain their FB. However, the Texas Legislature amended the Texas Alcoholic Beverage Code (See 87(R) SB 911) and effectively eliminated the 60% alcohol sales cap for Food and Beverage Certificate Holders with permanent commercial cooking equipment at their licensed premises. Some of the benefits of an FB are discussed below.

Areas that are wet for “the legal sale of mixed beverages in restaurants by food and beverage certificate holders only.”  

In Texas, voters decide what types of alcoholic beverages can be sold in their communities through local option elections. Some counties, cities, or justice precincts are wet only for the sale of mixed beverages at businesses that also hold subordinate Food and Beverage Certificates. Holders of a Mixed Beverage Permit (MB), Wine and Beer Retailer’s Permit (BG), and Retail Dealer’s On-Premise License (BE) can operate in these areas if they obtain and comply with the requirements of an FB Certificate. See Tex. Alco. Bev. Code §§ 25.14, and 69.17.

Eligibility to sell alcohol To-Go for Mixed Beverage (MB) and Private Clubs (N and NE). 

Mixed Beverage permit holders with an FB certificate can sell alcoholic beverages to go if it is included with “take out” food orders and the food is prepared at the permitted premises. Private club permit holders with an FB certificate have the same privilege, however, the sales can only be made to members of the private club. Both permit holders must also comply with other rules, including but not limited to packaging of the alcoholic beverages, age verification of the person picking up or delivering the alcoholic beverage, and locations where the alcoholic beverage may be delivered. See Tex. Alco. Bev. Code §§ 28.1001 and 32.155.

Elimination of the “Red” sign Posting Requirement. 

A business that derives 51% or more of its income from the sale of alcoholic beverages for on-premise consumption must post what is commonly referred to as the “Red” sign, warning persons that possession of a firearm is unlawful on the premises. Permit holders with an FB certificate are not required to post this sign, even if alcohol sales are over 51%, which is an important consideration in being able to service concealed handgun and open carry customers. See Tex. Govt Code § 411.204(e).

Exemptions from Performance Bond and Conduct Surety Bond requirements. Performance bonds are required in Bexar, Dallas, Harris, and Tarrant Counties for applicants and holders of Wine and Beer Retailer’s Permits (BG), and Retail Dealer’s On-Premise License (BE). Performance bond exemption is a big deal, because if your performance bond is revoked for the third time, your license or permit is cancelled by operation law. See Tex. Alco. Bev. Code §§ 11.61(b-1) and 61.71.

Conduct Surety Bonds are required for new applicants of a Wine and Beer Retailer’s Permit (BG), Mixed Beverage Permit (MB), and Private Club Permit (N). A conduct surety bond is $5,000 or $10,000, depending on whether the location is within 1,000 feet of a public school. If you receive an FB certificate, you may be eligible to have the bonds discharged or released. TABC has a form you can file with licensing for return of your bond(s). See Tex. Alco. Bev. Code §§ 11.11, 11.61(b-1), 61.71(l), 69.16(e) , 28.18(f), 32.23(f), 61.13.

Exemption from 300’ minimum distance requirements from private schools and day-cares in home rule cities. 

The Texas Alcoholic Beverage Code allows local officials to enact ordinances banning the sale of alcoholic beverages in certain areas, including the sale of alcohol within 300 feet of private schools and, with some exceptions, day-care or childcare facilities. Holders of an FB certificate are exempted from this ban. See Tex. Alco. Bev. Code §§ 109.33(h)(1) and 109.331(a).

Exemption from automatic 3-year disqualification to hold a license or permit, if an applicant’s prior license or permit was cancelled or refused due to a shooting, stabbing, or some other violent act. What this means is if you are an (MB), (N), (BE), or (BF) holder who settles a violation for permitting a breach of the peace which involves a shooting, stabbing, or some other violent act, see, i.e. Tex. Alco. Bev. Code §§ 28.11, 32.24, 69.13, 71.09, for cancellation, or the aforementioned permit is cancelled at hearing, the applicant is not automatically disqualified from reapplying for a permit. See Tex. Alco. Bev. Code §§ 11.481(b) and 61.42(c).

Exemption from nuisance statutes in the Texas Alcoholic Beverage Code. While the Emergency Order of Suspension has been making a lot of news lately, see Tex. Alco. Bev. Code § 11.614, the agency has a much more powerful tool to regulate and punish on-premise establishments by seeking a finding that the establishment constitutes a common nuisance. The agency can request an Administrative Law Judge to impose conditions on continued operations of an affected business and/or suspend a license or permit until an administrative case has been resolved,. see Tex. Alco. Bev. Code § 81.007. As a practical matter, if your license or permit is subject to a temporary order of suspension during the pendency of a proceeding, that suspension can last six months or more, depending on how quickly the administrative case moves through the appeals process internally at the agency, and through the courts. In contrast, an emergency order of suspension has a maximum limit of 90 days. See Tex. Alco. Bev. Code § 11.614(a). On-premise permit holders with an FB certificate are exempted from the common nuisance provisions. Tex. Alco. Bev. Code § 81.002.

Exemption from prohibition of use of cashiers under the age of 18. Holders of a permit or license for on-premise consumption of alcohol who also hold an FB certificate may employ cashiers under the age of 18. Although the person is still prohibited from serving, dispensing or delivering  alcohol, they would still be able to ring up the sale and serve food. Tex. Alco. Bev. Code § 106.09(e)

Extension of an (MB) premises to a secured area on adjoining public sidewalk

With certain exceptions, a mixed beverage permittee may only sell alcoholic beverages for consumption on the permittee’s licensed premises. However, the addition of an FB certificate allows the permittee to extend the premises to a secured noncontiguous area on a public sidewalk adjoining the premises if permitted by city ordinance. Tex. Alco. Bev. Code § 28.10(c).

Exemption from mail notification requirements of residents and neighborhood associations for original applications. Tex. Alco. Bev. Code §§ 11.393 and 61.382. While an application for an FB certificate does not exempt all sign posting requirements, see Tex. Alco. Bev. Code §§ 11.391 and 61.381, bypassing mail notification requirements offers an applicant to apply more discretely. Mailing an application to nearby residents may prompt more attention, and increase the chances of a protest. See, Tex. Alco. Bev. Code §§ 11.431 and 61.313.

Discrete benefits to applicants and holders of an (N) permit. 

This includes exemption from publication requirements, see Tex. Alco. Bev. Code § 11.392, exemption from one year disqualification of the premises for issuance of a new permit following a cancellation for a place or manner violation, see Tex. Alco. Bev. Code §§ 11.61(b)(7) and 11.612, and limitations on the ability of large counties and municipalities to regulate private clubs, see Tex. Alco. Bev. Code § 109.57(e).