Which TABC Permit Fits a Restaurant, and How Does the Alcohol-to-Food Sales Ratio Drive That Choice?

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Texas has no single restaurant permit. A restaurant that pours spirits needs a Mixed Beverage Permit (MB); one that serves only wine and beer can operate on a Wine and Malt Beverage Retailer’s Permit (BG); a beer-only restaurant uses a Retail Dealer’s On-Premise License (BE). The alcohol-to-food sales ratio does not choose among those three. It decides whether the restaurant can add a Food and Beverage Certificate (FB), and in some parts of Texas the FB decides whether a full bar is possible at all.

Start with what the restaurant will pour

Service model Permit or license Code chapter
Full bar, spirits by the drink Mixed Beverage Permit (MB) 28
Wine and beer only Wine and Malt Beverage Retailer's Permit (BG) 25
Beer only Retail Dealer's On-Premise License (BE) 69

The BG covers wine and malt beverages for consumption on or off the premises (Section 25.01), so a wine-and-beer restaurant does not need the MB. The BG does not cover spirits; cocktails require a Mixed Beverage Permit.

What the ratio decides

The ratio matters at two fixed points, and a restaurant should project it before choosing a structure.

  1. Qualifying for the FB. Under Section 28.18 of the Alcoholic Beverage Code and its counterparts for the other permits, a business qualifies either by meeting the statutory definition of a restaurant (its own permanent food service facility with commercial cooking equipment, preparing and offering multiple entrees) or by keeping alcohol at 60 percent or less of receipts at the location. Since January 1, 2022, a restaurant that meets the definition qualifies whatever its ratio. A concept without a full kitchen depends on the 60 percent line.
  2. The 51% firearms sign. A business on one of these permits that derives 51 percent or more of its income from on-premises alcohol sales must post the 51% sign, unless it holds an FB.

Put together, the kitchen and the ratio sort food businesses into three practical groups:

  • Commercial cooking equipment and multiple entrees, any ratio: qualifies for the FB through the restaurant definition.
  • Permanent food service without commercial cooking equipment, alcohol at or below 60 percent: qualifies through the receipts route and has to keep showing the ratio.
  • The same kitchen, alcohol above 60 percent: no FB; if TABC finds on-premises alcohol at 51 percent or more of income, the sign requirement applies.

What the address allows

The permit also has to fit the local option status of the address. One ballot issue matters especially to restaurants. Election Code Section 501.035(b)(9) lets voters approve “The legal sale of mixed beverages in restaurants by food and beverage certificate holders only.” Where that is how mixed beverages became legal, a full bar is available only to a business that also holds an FB. TABC treats this as a distinct designation, the Mixed Beverage Permit With FB Required, and lists it on its license and permit types page. In that kind of area, the kitchen and the ratio are no longer optional planning inputs; they are conditions of having a bar.

An address can also be legal for wine and beer but not for mixed beverages. There, the BG is the ceiling regardless of the kitchen.

What the FB part of the application asks for

TABC’s Rule 33.5 (16 Texas Administrative Code Section 33.5) lists what a first-time FB applicant furnishes:

  • the menu or, without one, a list of the food and beverage items;
  • the hours of food service and the hours of alcohol sales or service;
  • for the 60 percent route, sales data, including complimentary drinks, or a projection of sales broken down into food, alcohol, and all other categories such as tickets or merchandise;
  • for the restaurant route, a list of the commercial cooking equipment used in food service; and
  • floor plans showing the licensed premises and the permanent areas devoted mainly to food service.

A new restaurant has no sales history, so the receipts route starts with a projection. The projection, the menu, and the floor plan describe the same business and should agree with each other.

Deciding in the right order

  1. Service model first. Decide between spirits, wine and beer, or beer only, since that fixes the permit.
  2. Address second. Confirm the location’s local option status covers that service, and whether mixed beverages there are limited to FB holders.
  3. FB route third. Choose between the restaurant definition and the 60 percent route based on the kitchen that will actually be built and a realistic sales projection.
  4. File together. Prepare the FB documents with the permit application, so the kitchen list or the sales projection is ready when TABC asks for it.

This article is general information about Texas alcoholic beverage law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and TABC rules change; confirm current requirements with the Texas Alcoholic Beverage Commission, the relevant city or county, or a licensed Texas attorney before acting.

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