Michigan Liquor Control Commission Adopts Policy Change on Concession Agreements
In February 2012, the Liquor Control Commission adopted a change in policy that impacts Class B hotel-licensed operators and applicants, as well as other licensees who provide space within their licensed premises for "concession style operations". Under the current regulations, a licensee shall not sell, lease or transfer possession of the licensed premises, in whole or in part, to an unlicensed party, for purposes of operating a concession style business, without prior consent of the MLCC. For those of you familiar with Michigan's investigation process, this request could only be satisfied if all such licensing or franchise agreements were first reviewed and approved by the Commission prior to adoption by the parties.
Under the new guidelines, certain concession agreements may be permitted by the State of Michigan without prior state approval. However, before licensed parties or their operators assume that the revised policies no longer require the parties to submit any proposed concession agreement for review, caution must be exercised. If the agreements are incorporated within a lease or other agreement that transfers possession to an unlicensed party, the request must still be reviewed in advance by the MLCC.