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Glover Law is a boutique law firm that helps businesses and individuals navigate complex corporate and government affairs matters. The firm works with members of the hospitality industry on issues relating to state licenses, alcohol beverage sales, and potential franchise agreements.

Special Food Service Audits: What to Expect

 

If you hold a Special Food Service (SFS) liquor license, you will eventually be audited by the Florida Division of Alcoholic Beverages and Tobacco. Here is what you can expect.

As you know, the SFS license allows restaurants with at least 2,500 square feet of service and the ability to serve 150 people to obtain a full liquor license. To ensure that only bona-fide restaurants can take advantage of this affordable liquor license, 51% of food and beverage revenue must be from the sale of food and non-alcoholic beverages.

Importantly, the business must be in compliance during their first 60 days of operations and for each 12 month period afterwards. The state conducts audits to determine compliance, with a failed audit generally leading to administrative charges and revocation of the license. This is an important matter.

The Division's Bureau of Auditing will contact the licensee in writing to inform them that they have been selected for a routine audit. The firm has obtained copies of the Division's audit letters in order to provide readers more context on the process. 

The letter will direct you to produce the following records:

  • Income Statements: Monthly income statements should reflect a separation of the income derived from the sale of food, non-alcoholic beverages, alcoholic beverages, and other sources.

  • Point-of-Sale Register Report or Equivalent Sales Records: If your business uses an electronic point-of-sale (POS) register system with exportable transaction data, provide the monthly summary report for each month of the audit period. If a monthly POS system report is not available, provide the daily logs, ticket slips, or transaction receipts which
    represent the equivalent record of sales during the audit period.

  • Invoices for Food and Beverage Inventory Purchases: All invoices reflecting the purchases by your business of any food, non-alcoholic beverages, and alcoholic beverages during the dates of the audit period.

  • Florida Sales Tax Return Filings: All sales tax return filings as reported by your business to the Florida Department of Revenue during the months of the audit period.

  • Current Food and Beverage Menus: All current menus reflecting the prices of food and beverage products offered for sale.

The letter will also identify the "audit period" (the time period the state will examine) and set a deadline for your compliance with the request. Please note that the licensee is responsible for maintaining records of each purchase and each sale of food, alcoholic beverages, and non-alcoholic beverages for a period of 3 years

New SFS licensees should prepare for their first audit from the beginning.  For that reason, the firm shares the state's audit letters with its SFS clients. 


Please note that this page is made available by the law firm for educational purposes only, and that it is not intended to provide specific legal advice. Visiting this page does not create an attorney-client relationship between you and the firm.