Tenn. Comp. R. & Regs. 0100-01-.03 - CONDUCT OF BUSINESS

(1) Business Management Restricted.
(a) Every licensed business shall be managed by the holder of the license, if an individual, or by a partner or corporation officer or by a manager designated to the Commission in the event that the business is operated by a partnership or corporation (or by a manager in any case who has been designated to the Commission). The Alcoholic Beverage Commission is to be notified in writing, by certified mail, of any change in management within seven (7) days of the actual change.
(b) Each on-premise manager, assistant manager, and/or any individual working in such capacity, whether paid by salary or hourly and/or in training, and having duties which directly or indirectly impacts on the selling and dispensing of alcoholic beverages, must complete and submit to the Tennessee Alcoholic Beverage Commission a questionnaire within seven (7) days of assuming their managerial duties.
(c) Each on-premise manager, assistant manager, and/or any individual working in such capacity and having duties which directly or indirectly impacts on the selling and dispensing of alcoholic beverages must have a valid server permit subject to the provisions of T.C.A. § 57-3-707.
(2) Consumption on Licensed Premises. Except as provided for in 0100-01-.08 below, no licensee shall permit alcoholic or malt beverages to be consumed and/or sold on the licensed premises between the hours of 3:00 a.m. and 8:00 a.m. on Monday through Saturday or between the hours of 3:00 a.m. and 10:00 a.m. on Sunday unless the local jurisdiction has opted out of the expanded hours. If such is the case, then the consumption and/or sale of alcoholic beverages may begin at 12:00 p.m. on Sunday.
(3) Free Access to Licensed Premises Without Warrant. Immediate access, without a warrant, to all parts of a licensed premise shall at all times be accorded agents of the Tennessee Alcoholic Beverage Commission.
(4) Refusal of Cooperation. Any licensee, his agent, or employee who refuses to open or disclose his records to, furnish information to, or who furnishes false and/or misleading information to an agent or representative of the Tennessee Alcoholic Beverage Commission upon any matter relating to or arising out of the conduct of the licensed premises shall subject the license to revocation or suspension.
(5) Licensees Not to Combine. No combination of licensees shall be permitted to purchase merchandise in the name of the licensee and subsequently distribute merchandise which they have purchased in combination with each other to any one of the combination, and no licensee shall be permitted to transfer goods from one to another. If any member of the combination is apprehended violating this regulation, every member shall likewise be guilty of a violation, and it shall also be a violation for the wholesale distributor to furnish merchandise to any combination of licensed dealers.
(6) Licensee Responsible For Law and Order on Licensed Premises. Each licensee shall maintain his establishment in a decent, orderly, and respectable manner in full compliance with all laws of Tennessee, Commission rules and regulations, federal statutes, and ordinances and laws of the municipality and/or county where licensed premises are located at all times. The renting or leasing of the licensed premises for an event to a non-licensed entity, person, or corporation is specifically deemed not to be a defense for a violation of this rule and does not diminish the licensee's responsibility to comply with this rule.
(7) Sanitary and Fire Standards. All licensed premises shall be kept in clean and proper sanitary condition, and in full compliance with the provisions and regulations of all duly authorized health authorities whether state, county, or city.
(8) On-Premise Sale By Bottle Restricted. On-premise licensees shall not sell or give away distilled spirits by the bottle or package, open or unopened. Licensees shall have the right to sell wines, champagnes, or malt beverages by the bottle or container for consumption on the premises only, and said bottle or container must be opened prior to its being served to the consumer, except as specifically provided in T.C.A. § 57-4-203.
(9) On-Premise Employees' Activities Restricted ("B-Girl" Activity). It shall be unlawful for any person who is an employee of an on-premise licensee or any other person on behalf of the on-premise licensee to solicit alcoholic beverages for public consumption by the employee or any other person, and it shall be further unlawful to dispense or consume any beverage under the pretense that it is an alcoholic beverage for public consumption but is not. However, nothing in this section shall preclude an industry member and/or its employees or representatives from promoting products as permitted under Rule 0100-03-.11.
(10) Restriction As To Age Of Dispensing Employees. No person under the age of eighteen (18) years shall be permitted to dispense, serve, or sell alcoholic or malt beverages in any establishment licensed under the provisions of T.C.A. §§ 57-4-101, et seq.
(11) Dual Interests Prohibited. Except as provided in Rule 0100-03-.16:
(a) No licensee holding a license issued pursuant to T.C.A. §§ 57-4-101, et seq. and no person owning an interest, financial or otherwise, in a partnership or corporation holding such a license, shall have any interest, directly or indirectly, in any business licensed under the provisions of T.C.A. §§ 57-3-202 or 57-3-203.
(b) No person having any interest, financial or otherwise, directly or indirectly, in any business licensed under the provisions of T.C.A. §§ 57-3-202 or 57-3-203 shall have any interest in any business licensed under T.C.A. §§ 57-4-101, et seq.
(12) Restrictions on License After Surrender or Revocation.
(a) No license will be issued to the spouse, child or children, son-in-law or daughter-in-law, employee, or other person having any interest in the business of a licensee whose license has been revoked, for the privilege of doing business at the same location or in close proximity to the location of the establishment whose license was revoked.
(b) The Commission may refuse to reissue a license to the same person, firm, or corporation whose license has been revoked for one (1) year from the date of said revocation.
(c) The Commission may treat a surrender of a license as a revocation under the restrictions contained in this paragraph.
(13) Licensee Must Surrender License If Business Discontinued. Whenever any licensee discontinues business for any reason, he shall immediately notify the Commission in writing and surrender his license.
(14) Prohibited Practices. No licensee, employee, or agent of a licensee shall give away any sealed package, or any drink, of wine or alcoholic beverages except as permitted by T.C.A. § 57-3-404 and Rules 0100-03-.11 and 0100-06-.03. "Give" for the purpose of this paragraph, shall include:
(a) Offering or delivering any free alcoholic beverage or wine to any person or group of persons;
(b) Offering or delivering unlimited drinks of wine or alcoholic beverages for a fixed price if the actual cost of all ingredients, including the alcohol and all applicable taxes, of the drinks actually served to a customer exceeds the fixed price charged; or
(c) Awarding any wine or alcoholic beverages as a prize or free drink or encouraging or conducting any game or contest which involves drinking or uses wine or alcohol as a prize or free drink.
(15) Happy Hour Restrictions. No licensee, employee, or agent of a licensee shall engage in any of the following promotional practices during the period beginning at 10:00 p.m., prevailing time, until the time set by law for closing of such licensed establishments:
(a) Serve two (2) or more drinks or containers of alcoholic beverages to a consumer at one time.
(b) Increase the volume of alcohol contained in any such drink during any calendar week without increasing proportionately the price regularly charged for such drink.
(16) Business Name Change. At least seven (7) calendar days prior to any change in its business name or "d/b/a" name, a licensee must submit the proposed change in writing to the Commission for approval. Upon approval, the Commission will amend the license to reflect the licensee's new business or "d/b/a" name.
(17) Display of License. Any person, partnership, corporation, or other legal entity holding an on-premise consumption liquor-by-the-drink license issued under Chapter 4 of Title 57 of Tennessee Code Annotated, shall prominently display and post, and keep displayed and posted, in the most conspicuous place in the licensed premises, the license so issued.
(18) Server Permits. On-premise consumption licensees should maintain and have available for review on the premises documentation of the date of hire for anyone working in a capacity to serve alcoholic beverages. Acceptable documentation shall include a dated application for employment or a dated W-4 form. If the licensee does not have acceptable documentation of the date of hire for the employee, then it will be deemed that the employee has worked at the licensed premises greater than sixty-one (61) days.
(19) Seating. All on-premise consumption licensees licensed as a restaurant shall maintain a minimum seating for forty (40) people at tables and all on-premise consumption licensees licensed as a hotel shall maintain a minimum seating for seventy-five (75) people at tables during business hours with the exception of wine-only restaurants as defined at T.C.A. § 57-4-101(c), or any other statutory exception. Seasonal seating (i.e. outside patio seating) shall count toward total numbers, but not toward the minimum seating requirements at tables.

Seats at bars will be counted toward the minimum number of seats at tables if the bar is at least twenty (20) inches in depth and meals may be served and are regularly served at the bar. Those bars containing less than twenty (20) inches in depth will be looked at on a case by case basis with such factors as the type of menu served, placement of the bar, and whether food is regularly served at that bar.

(20) Minors in Possession of Alcohol. All on-premise consumption licensees are required to insure that minors are not in possession of and/or are not allowed to consume any alcoholic beverage - including malt beverages or beer - on the licensed premises.
(21) Employer Responsible for Employee's Action.
(a) Licensees are at all times responsible for the conduct of their businesses and are at all times directly responsible for any act or conduct of any employee which is in violation of the state statues, the rules and regulations of the Commission, and/or any local ordinance or federal statute whether the licensee be present at any such time or not. This section is defined to mean that any unlawful, unauthorized, or prohibited act on the part of a licensee's agent or employee shall be construed as the act of the employer, and disciplinary actions will proceed as though he were present and had an active part in such unlawful, unauthorized, or prohibited act, and as if having been at the employer's direction and with his knowledge.
(b) In any disciplinary proceeding, it shall be no defense that an employee or agent of a licensee acted contrary to order, or that a licensee did not personally participate in the violating action or actions. However, disciplinary actions related to sales of alcoholic beverages to minors, intra-industry violations, and trade violations are subject to the provisions of Rule 0100-05-.07, the Responsible Licensee Program.
(22) Application Process for On-premise Consumption Licenses.
(a) Applications, in duplicate, shall be submitted to the nearest office of the ABC. In addition, the following documents must be submitted in support of an application for license to sell alcoholic beverages for consumption on premises:
1. Completed application;
2. Questionnaire for anyone having at least five percent (5%) ownership in the business, for any officers of a corporate applicant, and for any manager, assistant manager, and/or any individual working in such capacity and having duties which directly or indirectly impacts on the selling and dispensing of alcoholic beverages;
3. Lease agreements, assignments, subleases, and/or deed to property;
4. Current Certificate of Occupancy;
5. Inspection by the Tennessee Alcoholic Beverage Commission;
6. Acknowledgment of the rules and regulations;
7. Menu;
8. Price Schedule of Drinks;
9. Proof that applicant entity, if a corporation, LLC, LP, etc., is registered with the Tennessee Secretary of State's office, and the submission by said applicant entity of a Certificate of Existence/Good Standing issued by the Tennessee Secretary of State's Office within thirty (30) days of applicant's application for a new license or renewal of an existing license. If the applicant entity was formed in another state or foreign jurisdiction, the applicant must submit a Certificate of Authorization issued by the Tennessee Secretary of State's Office within thirty (30) days of the applicant's application for a new license or renewal of an existing license.
10. Corporate charter/Articles of Organization;
11. List of Officers/Owners/Members/Partners;
12. Sales & Use Tax Certificate of Registration;
13. Bond Posted with the Department of Revenue;
14. Application fee;
15. Completed declaration of citizenship form to be submitted by owner(s), officer(s), and/or principal(s) of the applicant or others as required by T.C.A. §§ 4-58-101, et seq.
16. Any other information that the Tennessee Alcoholic Beverage Commission may request.
(b) In addition, any of the following documents which exist must also be submitted:
1. Management agreements;
2. Bill of sale.

Notes

Tenn. Comp. R. & Regs. 0100-01-.03
Original rule certified June 7, 1974. Amendment by Public Chapter 261 effective July 1, 1983. Amendment filed May 10, 1983; effective August 15, 1983. Amendment filed July 8, 1983; effective October 11, 1983. Amendment filed November 14, 1983; effective February 13, 1984. Amendment filed January 14, 1986; effective February 13, 1986. Amendment filed June 12 1988: effective August 5, 1988. Amendment filed December 4, 1996; effective April 30, 1997. Amendment filed December 29, 2000; effective March 14, 2001. Amendment repealing and replacing the rule was filed March 10, 2010; effective June 8, 2010. Amendment filed May 22, 2014; effective August 20, 2014. Amendments filed January 11, 2018; effective April 11, 2018. Repeal and new rules filed January 25, 2019; to have become effective April 25, 2019. However, the Government Operations Committee filed a 60-day stay of the effective date of the rules; new effective date 6/24/2019.

Authority: T.C.A. §§ 4-58-103; 57-1-207; 57-1-209; 57-3-104; 57-3-104(c); 57-3-406; 57-3-406(b); 57-3-704; 57-3-710; 57-4-101; 57-4-102; 57-4-102(29); 57-4-104(c); 57-4-201; 57-4-201(a)(2); 57-4-203; 57-7-223; Chapter 649, Public Acts 2008; and Chapter 371, Public Acts of 2017.

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