3 Va. Admin. Code § 5-50-220

Current through Register Vol. 41, No. 8, December 2, 2024

Section 3VAC5-50-220 - Interests in the businesses of licensees

Persons to whom licenses have been issued shall not allow any other person to receive a percentage of the income of the licensed business or have any beneficial interest in such business; provided, however, that nothing in this section shall be construed to prohibit:

1. The payment by the licensee of a franchise fee based in whole or in part upon a percentage of the entire gross receipts of the business conducted upon the licensed premises, where such is reasonable as compared to prevailing franchise fees of similar businesses;

2. Where the licensed business is conducted upon leased premises, and the lease when construed as a whole does not constitute a shift or device to evade the requirements of this section:

a. The payment of rent based in whole or in part upon a percentage of the entire gross receipts of the business, where such rent is reasonable as compared to prevailing rentals of similar businesses; and

b. The landlord from imposing standards relating to the conduct of the business upon the leased premises, where such standards are reasonable as compared to prevailing standards in leases of similar businesses and do not unreasonably restrict the control of the licensee over the sale and consumption of alcoholic beverages; or

3. The payment by the licensee of a management fee based in whole or in part upon a percentage of the entire gross receipts of the business conducted under the license where the licensee has contracted with a management company or promoter to perform operational duties on behalf of the licensee, provided that:

a. All payments to any management company or promoter are less than 10% in aggregate of the gross receipts of the business conducted under the license; and

b. The licensee provides the Alcoholic Beverage Control Authority (authority) a copy of the contract between the licensee and the promoter that identifies the management company or promoter as an agent of the licensee for the purposes of exercising the privileges of the license and holds the licensee liable for any violations of the Alcoholic Beverage Control Act (§ 4.1-100 of the Code of Virginia) or authority regulation committed by the management company or promoter.

3 Va. Admin. Code § 5-50-220

Derived from VR125-01-5 §22, eff. December 12, 1985; amended, Virginia Register Volume 4, Issue 6, January 21, 1988; Volume 5, Issue 2, eff. November 24, 1988; Volume 7, Issue 4, eff. December 19, 1990; Volume 8, Issue 6, eff. January 15, 1992; Volume 9, Issue 6, eff. January 13, 1993; Volume 10, Issue 11, eff. March 23, 1994; Amended, Virginia Register Volume 38, Issue 09, eff. 2/7/2022.

Statutory Authority: §§ 4.1-103 and 4.1-111 of the Code of Virginia.