Movies and mixology: Alcohol at the cinema brings licensing challenges


During the past decade, the moviegoing experience has evolved in numerous ways from high-tech advances in motion picture film format and projection display standards to in-theatre motion-simulation effects. Aside from technology advancements that enhance the visual and sensory effects, many motion picture theatres have gradually advanced and expanded amenities and services in order to create a more inclusive and social entertainment experience.

The main focus for many theatres is centered on food and beverage services. Specifically, many now offer expanded food menus with seated dining options and, as an added premium service, even alcoholic beverages and mixed cocktail drinks. The addition of these amenities, however, is not just an upscale jump in comfort and convenience for patrons. Expanded in-theatre food and beverage services merge the often diverse business needs of the theatre, restaurant and alcohol industries. Essentially, theatre owners are entering new markets that require not only attention to preferred product inventory and promotion, but also to the complex regulatory requirements of food and alcoholic beverage services.

Theatre owners are slowly discovering that realizing their merged business concepts requires a full exploration of the various regulatory requirements adopted on a state-by-state basis, and even on a local level within the jurisdiction of each theatre location. Prior to expanding food and alcohol services, theatre owners, like any other restaurateur or bar owner, must obtain proper state and local license approvals. Oftentimes, the most complicated area of amenity expansion for exhibitors pertains to alcohol licensing and consideration of the various liability issues that are common to any alcohol licensee. While alcoholic beverage services are becoming more common to the theatre industry, most state alcoholic beverage regulatory agencies and local government jurisdictions have not adopted regulatory licensing provisions that deal specifically with the modern concept of multi-use facilities. Accordingly, many regulatory agencies continue to either permit or prohibit alcohol service in movie theatres based on traditional licensing models that do not necessarily consider the entertainment needs of movie theatre locations. For example, various state and local jurisdictions required food service for approval of on-premise consumption alcohol licenses. The type and percentage of required food service varies by state as well as local jurisdiction, but at any level, such statutory requirements often neglect the fast-service concession type of food-service models that are essential for the operation of most theatre establishments.

Another example of traditional licensing regulatory requirements that neglect the typical theatre operation model concerns the prohibition of minors and adults commingling in on-premise alcoholic beverage establishments, even where such establishment is a multi-use facility and not an adult bar or lounge. Overall, however, our general recommendations on operational models include some form of expanded food service or dining where possible and adoption of policy guidelines for preventing alcohol sales and consumption by minors.

Despite the various state and local licensing obstacles associated with dining and alcohol beverage services, the theatre industry remains on a progressive track toward creating all-inclusive theatre entertainment destinations. The addition of responsible alcoholic beverage sales and services along with expanded food menus or dining options is an obvious progression for the theatre industry and often less expensive than investing in additional advanced technology. Those theatres that are able to mold their operational models to succeed in the restaurant and alcohol business can attract a new generation of moviegoers that prefer to combine their movie viewing with the social ambiance of dining and enjoying cocktails. In order to assist theatre owners and operators in modernizing the theatre industry and considering the various obstacles with licensing and business operation, our presentation at ShowEast will explore various critical discussion points including:

* State alcohol licensing consideration and options;
* Local government approval processes and obstacles;
* Common regulations governing the purchase, delivery and promotion of alcohol including happy hour and drink special regulations;
* Additional licensing consideration for expanded food service or restaurant dining services; and
* Liability concerns common for alcohol licensees including alcohol service to minors and liability arising from overconsumption of alcohol by theatre patrons.

We hope that session attendees will gain an understating of the complexities associated with merging alcoholic beverage sales into their theatre operation as well as an appreciation for the possible benefits.

Robert Lewis is chairman, alcohol beverage industry practice, at Akerman Senterfitt. Marbet Mier Lewis is shareholder, alcohol beverage industry practice, at Akerman Senterfitt. Their presentation on movies, mixology and the law will be part of a breakfast seminar at ShowEast on Tuesday, Oct. 22, at 8:30 a.m.