Page 23 - Beverage Master_AprMay2022

Craft Brewery
Craft Brewery
The costs to obtain federal trademark registration loans, through investors, or some combination
can vary significantly. In most cases, the application thereof, having a knowledgeable CPA involved is
can be filed online using pre-existing descriptions of essential. In addition, if funds will be raised from
the associated goods and services. The filing fees investors, an attorney should be part of the team,
for such applications are $250 per class of goods to ensure that the owners do not run afoul of secu-
and services (i.e., international class 032 for beer, rities laws.
class 043 for taproom services, etc.). Additional
government fees will depend on whether the appli- Lease
cation is filed as “actual use” versus “intent-to-use,”
whether extensions of time are requested before Most breweries are built on leased property.
filing a Statement of Use, etc. Also, attorneys’ fees Often a commercial landlord will have a “standard”
for conducting a clearance search, filing and pros- lease that they want the brewery to sign. But,
ecuting the application can vary dramatically. As unless a landlord has already had a brewery tenant,
a very general guide, one should anticipate about they are likely unfamiliar with the particular needs
$2,000 total cost per trademark, but discuss each of a brewery and their standard lease will reflect
mark with an attorney for a specific estimate. this lack of understanding. Having an attorney that
not only understands commercial leases, but is
Operating Agreement familiar with brewing equipment and operations,
can prevent the costly mistake of signing a long-
All LLC’s should have a written operating agree- term lease for a property that will not meet the
ment. For single-member LLCs, they help to distin- brewery’s needs. Some of the issues that should
guish the business financial interests from the own- be addressed include water and electrical supply,
er’s personal financial interests. For multi-member puncturing walls and ceilings for ventilation, sloped
LLC’s they are critical; they are essentially a “pre- floors and trench drains, noise levels, odors, use of
nup” for the business owners. outdoor space, etc. It is impossible to estimate the
cost of an attorney’s involvement in this process as
There are three reasons why breweries should every lease and situation is different. But, getting
hire an attorney to draft an operating agreement the attorney involved in the beginning is the most
from scratch. First, online or “standard” operat- cost effective option as it is easier to prevent a dis-
ing agreements are generally drafted very poorly. agreement than to resolve one.
Second, states vary in terms of what is required to
be included in an operating agreement, so using Equipment Purchasing
one from the internet may not satisfy the law in a
particular state. Third, and most important, draft- Breweries have a lot to buy: a brew house and
ing and negotiating an operating agreement forces fermenters, furniture, glassware, grain and hops,
the owners to discuss issues that might otherwise and much more. Generally, owners make these
be left unaddressed. The resulting document is tai- purchases on their own, but for large expenses or
lored to the owners’ specific needs and can prevent long-term supply agreements, it’s never a bad idea
unnecessary expense, disagreement, and hardship if to have an attorney review the terms.
problems develop in the business relationship down
the line. File Brewer’s Notice with TTB

The legal fees for drafting the operating agree- Some breweries have their attorney prepare and
ment will depend on the number of members and file the Brewers Notice and accompanying docu-
the level of agreement between the members on mentation with the TTB and certainly that can take
important issues. Five to ten hours of attorney time some weight off the owners’ to-do list and ensure
is a good starting estimate. things get filed correctly the first time. But, for
those looking to save on legal fees, this is one area
Financing that it makes sense to DIY. The forms are long and
detailed, but they are not especially difficult. The
Given the expense, very few breweries are built TTB has excellent online resources and guidance
purely from the owners’ savings. Whether the proj- and the personnel at the TTB are quite friendly and
ect will be funded by friends and family, through helpful on the phone.

BEVERAGE MASTER April - May 2022 21

BM040522 Main Pages.indd 21 3/25/22 1:25 PM