Utah Admin. Code R82-1-208 - Percentage Lease Agreements

(1) The authority for this rule is Section 32B-1-208

(2) This rule establishes the following:

(a) the maximum percentage of revenue from alcohol sales a percentage lease agreement may require; and

(b) the procedure for submitting a percentage lease to the department.

(3) As used in this section, "Percentage lease" means the same as in Section 32B-1-208.

(4)

(a) The maximum percentage of revenue from alcohol sales allowed in a percentage lease is 19%, whether that percentage is:

(i) described through a rent-sharing or profit-sharing agreement;

(ii) calculated in part on the gross sales or profits of the licensee, including profits from the sale of alcoholic beverages; or

(iii) described in the percentage lease in some other manner.

(b) Parties to a percentage lease must submit a copy to the department for review as part of the application for licensing.

(c) If during the review process, the Department cannot determine how alcohol sales in a percentage lease agreement are being shared, based on the language in the percentage lease agreement, the department staff shall return the lease agreement and license application, and the Commission may decline to act on the application.

(d) An applicant may resubmit a lease once the language in the lease is sufficiently clear for the Department to determine that no more than 19% of profits from the sale of alcoholic beverages will be distributed to a lessor.

(e) The lessor cannot control or acquire an ownership interest in the business of the lessee.

(f) An industry representative is prohibited from profit-sharing and ownership of retail license operations.

Notes

Utah Admin. Code R82-1-208

Adopted by Utah State Bulletin Number 2020-21, effective 10/27/2020 Amended by Utah State Bulletin Number 2022-24, effective 12/1/2022 Amended by Utah State Bulletin Number 2024-01, effective 12/22/2023