Craft Beverage Law
As avid homebrewers ourselves, we are passionate about the craft beverage industry. Our clients range from the smallest of farm breweries to those that distribute to more than a dozen states. We can help you every step of the way: with the formation of your corporate entity, drafting your operating agreement, helping negotiate your lease, securing federal registration of your trademarks, obtaining your federal permit, submitting formulas and labels for TTB approval, negotiating distribution agreements, and more.
photo by Brian Kaider at Waredaca Brewing Co., Laytonsville, MD
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Getting the Business StartedThe story almost always begins the same way. A group of people sit around a table or a firepit drinking each others homebrews and having a good time, when someone says it... "We should start a brewery!"
But, making the transition from homebrewer to starting a professional brewery is scary and there are many issues to consider. One of the first is what kind of corporate entity to create. For most start-ups, a limited liability company or LLC gives you the most flexibility. But, we will discuss your plans and help you decide on the best structure for you. Because breweries are often started by a group of friends, they sometimes forego the step of drafting an Operating Agreement. This is a big mistake. Starting a brewery is hard and it takes the full commitment of everyone involved to make it successful. An Operating Agreement is like a prenuptial agreement for your business. While everyone is still on good terms, it is the best time for you to discuss how the business will be run, who will have a say in key decisions, and how to handle the departure of a partner if that should become necessary. We will sit down with you to discuss these and many other issues and draft an agreement that best fits your needs. |
Getting to Opening DayIf you've come this far, congratulate yourself. You're already farther into realizing your dream than the vast majority of homebrewers who want to open a commercial brewery. Now take a deep breath, because there is a lot to do.
We strongly encourage breweries at this point to talk to an attorney about trademarks. We know, it's the last thing on your mind when you're worried about getting a location, getting zoning approvals and permits, and equipment, etc. But, you will be spending the better part of the next year getting your brewery up and running. The last thing you want is to open your doors and then get a cease and desist letter forcing you to change your entire branding strategy. It's a kick in the gut. It's much better to find out early whether there are going to be any roadblocks for your brand and, if not, to protect it by filing for trademark registration right away. For more information about our trademark services, click here. Next, you need a location. A local commercial real estate broker can be extremely helpful. But, when it comes to negotiating the lease, there are many issues particular to breweries, distilleries, etc., with which a broker or even a real estate attorney may not be familiar. For example, if the lease does not allow you to punch through the walls or ceiling, you may not be able to properly vent your equipment, rendering the property effectively useless for you. We can edit and help you negotiate your letter of intent and the final lease to ensure your needs will be protected. The federal, state, and local licenses, permits, and approvals required to open a brewery can be quite confusing. We can develop a strategy for the sequence and timing of applications to ensure the process occurs as efficiently as possible. |
photo by Brian Kaider at Grgich Hills Estate Winery, Napa, CA
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photo by Brian Kaider at Waredaca Brewing Co., Laytonsville, MD
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Moving the Business Forward
You've done it. You've successfully brought your dream of opening a brewery to reality. The doors are open and people are streaming in to drink your beer.
Now is the time to begin building and strengthening your brand. If you have not already filed for trademark registration of your flagship beer names, that should be your next priority if you plan to do any distribution of your product. You will find that in a crowded market filled with many great beers, it is difficult to get shelf space. Once you do, and consumers begin to recognize your product and pick it up repeatedly, it would be an immense set-back to have to rebrand that product over a trademark dispute. We can help you develop a strategy and budget for protecting your brand. In the beginning, you may only be selling your product on draft in your taproom, but eventually you will probably want to start canning/bottling your beer. When you do, you will need to get approval of your labels from the Alcohol and Tobacco Tax and Trade Bureau (TTB). Some of your products may also require you to submit formulas to the TTB for approval. Depending upon the state in which your brewery is located and the volume of beer you are making, you may have to engage a distributor in order to sell your product outside of your taproom. We can help you with all of these issues. |
Your Partner in Craft
We love the craft community and want to see you succeed. While we are happy to assist you with as few or as many issues as you need, our goal is for you to view us as a partner that helps clear your path to success. Give us a call and let's get the conversation started. Better yet, we would love to sit down and discuss your needs over a couple of homebrews!
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NOTE: Are you going to the Craft Brewers Conference in Indianapolis? Come see Brian at the KaiderLaw booth!
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See our articles in Beverage Master Magazine and The Grapevine Magazine, click here!
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