Advice from a hospitality attorney on navigating the complex legal grid
In a difficult economy, discounting and promotions have become important tools for restaurants. These days, “happy hour” is no longer limited to a special price on drinks and may include a food and beverage combination at a set price during specified times or an event or drink special at the bar targeted at a specific group of customers. Though some of these don’t sound like traditional happy hour specials, operators should be aware that in many jurisdictions these activities fall within the scope of happy hour laws, regulations and local ordinances.
Happy hours may be regulated on the state, county or even the city level. If planning a promotion in a state like Georgia, which has happy hour city ordinances, you will need to make sure that your promotion is regulatory compliant. The many local, state and county regulatory layers for happy hours may prove frustrating for those trying to plan multi-state promotions.
One way to ensure a successful promotion is to avoid certain elements of happy hour that are common restrictions in many jurisdictions. The fewer of these elements included, the greater the likelihood your happy hour will be legal and successful.
Basic Legal Guidelines
Avoid traditional “happy hour style” events that target particular demographics or aren’t available to all legal drinkers, such as “ladies night” or “college night.” Also operators are advised not to offer food and drink or combination specials only available in one part of the restaurant. Restaurants should stay clear of “two for one offers” or any other combination where multiple drinks are sold together as part of the special and avoid offering free beverage alcohol drinks.
While these are common restrictions, this is by no means an exhaustive list. Some states prohibit discounts on food as a means to entice the purchase of beverage alcohol and others do not allow any deviation in price during the course of a day.
Illinois, for example, is a state with relatively restrictive happy hour rules which has adopted some of the common restrictions set forth above, as well as others. The state’s happy hour rules are contained in Section 5/6-28 of the Illinois statutes, Regulation 100.280 of the rules promulgated by the Illinois Liquor Control Commission (“ILCC”) and ILCC Trade Practice Policy #22. They state that when planning a happy hour promotion, Illinois retailers may not, among other things: serve two or more drinks at a time; sell an unlimited number of drinks for a fixed price; sell drinks at different prices during the same day; and give away alcoholic beverages to promote the sale of non-alcohol products. They may offer the following, however: Free food and entertainment, meal packages including beverage alcohol, increased drink prices in lieu of a cover charge for entertainment not regularly available at the premises.
Illinois is a good example of the care that must be taken when developing a promotion, so make sure to evaluate any common restrictions in the jurisdictions where the promotion will run. Try to avoid the prohibitions discussed above, be mindful of liability issues that might arise from promoting overconsumption and consult with an attorney if possible.
But happy hour can be done well with a little forethought. Happy planning!