Remember when food trucks were the new threat to “traditional” restaurants? Or how about the fast-casual concept that was sparked by the likes of Chipotle? Even reminiscing on sentimental moments, childhoods were forever changed with the invention of the ‘Happy Meal.’ The dining industry is everchanging, yet the Sunshine State is handicapping innovative restaurant owners’ by prohibiting the selling of items not contained within six outdated categories, established at a time when Forrest Gump was number one in box office sales.
Big names TopGolf, Walmart, and Target have recently taken issue with Florida’s old-fashioned “Restaurant Rule” that is affecting restaurant owners across the state. These entities and the State are at odds over what may be sold at a licensed restaurant, specifically, those trying to sell liquor on the premises. Directly at issue is the validity of a state agency’s rule attempting to define “Items Customarily Sold in a Restaurant.” The State contends that the rule’s fixed list sufficiently outlines all items that are customarily sold in a restaurant. That list is limited to the following:
- Ready to eat appetizer items;
- Ready to eat salad items;
- Ready to eat entrée items;
- Ready to eat vegetable items;
- Ready to eat fruit items; or
- Hot or cold beverages
What the State fails to see with this antiquated list, ironically, is that the only thing customary about restaurants, and dining in general, is perpetual innovation. In recent years, it has become increasingly customary to see a blend of grocery and restaurant concepts better known as “grocerants.” In a grander scheme, major grocery retailers such as Wholefoods have adopted this concept to counter the decline of in-store customers due to the rise of online grocery shopping. However, Florida’s aversion to hard liquor, since the days of Prohibition, are hindering the grocerant and similar concepts.
It is this hinderance that has caused the aforementioned companies to challenge the agency rule’s validity due to its vagueness. Other than the list attempting to define “items customarily sold in a restaurant, the rule includes a provision allowing for other items to possibly be sold if, and only if, one could successfully petition to the agency that the item is, wait for it . . . customarily sold in restaurants. This is somewhat circular in nature, and the rule is unclear as it seems the limited guidance could have been similarly effective if reworded to simply ‘food and beverage.’ The companies argue that the rule itself operates in part as an admission of its’ own vagueness with the inclusion of this provision. If a consumption on premises liquor license holder or a licensed restaurant wanted to sell something other than food and beverage, they have to seek approval with no standards whatsoever.
The companies also contested that due to the arbitrary and vague nature of the rule, even the agency itself “routinely ignored and/or refused to apply [it].” It is the companies’ assertion that due to the lack of guidance or parameters, the agency granted several applications for consumption on premises licenses for entities that sell items beyond those specifically listed in the rule, without the applicants being required to separately petition to establish that the items are customarily sold in restaurants. In fact, one of the petitioners, TopGolf, was only recently informed that its Florida locations, which are licensed for consumption on premises, are prohibited from selling items other than those listed in the rule, despite the agency being fully aware of the selling of these items at the time it issued the licenses. This form of selective enforcement is exactly what the companies are striving to prevent.
For close to a century, Florida’s Prohibition-era law has limited the market for distilled spirits to designated areas, i.e., a building separate from grocery items, a la, Publix Liquors, or administratively with liquor licenses only being granted to restaurants or other special areas. Businesses and applicants seeking a consumption on premises license are being put in an extremely compromising position. They are being given no guidance with how to comply with a rule, that purports to provide just that, guidance. Therefore, consumption on premise liquor licensees, such as TopGolf in this case, may suddenly be told that they are not in compliance with this rule. Even worse, restaurant owners may forego potential profits and business strategies, by not trying to obtain a consumption on premises license in fear that they may not be able to comply with unknowable standards.