Why Chicago BYOBs Like Nobody’s Business

Why Chicago BYOBs Like Nobody’s Business

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Editor’s note: This story has a whopper of an update! The story describes corkage fees as disallowed in a good number of Chicago restaurants. This determination had been made from several city of Chicago websites and its online Restaurant Guide, a manual to business owners. The update is that, more than a week after publishing this story, the city announced that it had posted incorrect information about its policy for many years. The actual policy had been changed in 2007 or 2008, but not updated publicly until late May of 2016. As it stands now, corkage fees are legal in the city, and business owners can apply them at-will, regardless of whether the restaurant has its own liquor license or not.

Ian Adams is a big fan of BYOB restaurants. Like many Chicagoans, he started factoring in whether or not he could bring his own booze to a restaurant in his early twenties, when every little bit helped stay within his dining budget. But over time he realized there was something different about “Bring Your Own Bottle” restaurants — something beyond the lower price tag.

“They tend to be friendly, family-owned or single-proprietor restaurants who are generally really receptive to folks from the neighborhood,” he says. “Just great spots to go and eat and enjoy others’ company.”

But it wasn’t until he moved from Chicago to Washington, D.C., for a few years that he really came to appreciate BYOBs. He found just one such restaurant there and, after a while, it got a liquor license and stopped allowing the practice. When he travels he notices the same thing, too: Most cities don’t have many BYOB restaurants.

Now that Ian’s back in Chicago he wants to know:

Why does Chicago have so many BYOBs compared to other cities?

Ian’s question seems simple enough, but the basis of it — that Chicago compares favorably to other cities — requires firming up before we get to the heart of the matter: What’s made BYOB such a Chicago phenomenon?

What do we mean by BYOB?

Let’s define some terms, because — in Chicago and beyond — BYOB can mean many things.

One type involves a restaurant that actually has the ability to serve alcohol; it’s just that it chooses to also allow patrons to bring their own. In Chicago, say, a fine-dining restaurant with an extensive wine list may be BYOB, but it usually charges patrons for that privilege. These “corkage fees” sometimes hit as much as $75 per bottle. Many of these restaurants also check your label against their list to make sure it’s not a wine they stock. If they sell it, you have to buy it from them and take your BYO bottle back home.

Ian, though, is talking about the other type of BYOB experience, one where the restaurant doesn’t sell alcohol but allows patrons to bring and consume their own. The key term here is “allow,” because BYOB policies up to the owner and goals can change from day to day.

As for corkage fees at these places? The city’s Restaurant License and Zoning Reference Guide makes BYOB guidelines plain as day: “Fee: no direct or indirect fee may be charged for the allowance of alcohol consumption without a City of Chicago liquor license; this includes corkage fees.” (Of course, complaints about illegal corkage fees abound!)

How many Ian-style BYOB places are there in Chicago? Data on licensed restaurants that have no liquor license suggest the city could have as many as 5,905 BYOB restaurants, but that’s assuming every one of those spots would allow it. If we remove places unlikely to allow BYOB (think fast-food or coffee-shop chains such as McDonald’s, Burger King, Dunkin Donuts, etc.) we still have 4,797 contenders spread across the city. And not a single one is legally allowed to charge a corkage fee!

Above: These are the nearly 4,800 Chicago restaurants that have BYOB potential, meaning they do not have a liquor license and — if BYOB is allowed by the owner — are precluded from charging corkage fees. Most national chains (e.g., McDonald’s and Dunkin Donuts) have been excluded, as have university-based food services.

How does Chicago stack up?

We can go ahead and knock Washington, D.C., San Francisco, New York City and Los Angeles off our list of cities that might rival Chicago’s number of BYOBs. That’s because in those cities, Ian-style “bringing your own” isn’t legal unless the restaurant has a liquor license. That doesn’t mean it never happens, but it’s only a matter of time before they’re shut down.

We have, however, found two major cities where BYOB regulations are on par with Chicago’s: Houston and Philadelphia.

Houston is the nation’s fourth-largest city and, like most cities in Texas, it allows BYOBs with no liquor license. But searching for BYOBs in Houston brings back scant results. That’s likely because in Texas liquor licenses are easy to come by. In some cases, applications can be started online, and there are 70 different types available to accommodate different business types and sizes. The bottom line: If a Houston restaurant is interested in allowing booze at all, it’s easy to get a license and take advantage of that revenue stream.

Philadelphia, the fifth-largest U.S. city, also allows BYOBs. In foodie circles it often comes up alongside Chicago when discussing BYOBs.

Philly treats liquor licenses like taxi medallions or casino licenses; there’s a set number based on the county’s population. A license’s current going rate is $140,000. For many new restaurant owners in Philly, there’s either no liquor license available or they can’t afford one. In either case, BYOB is their only way to go.

Why is BYOB so prominent in Chicago?

The takeaway from Philly is that tough regulations can provide fertile ground for BYOB joints. It turns out that Chicago also exerts tough regulatory pressure, but it differs in the details; Chicago doesn’t limit the number of liquor licenses, but City Hall still makes them hard to come by.

According to Chicago Tribune restaurant critic Phil Vettel, Chicago’s strict about its liquor licenses because of the city’s experience during Prohibition.

“Organized crime got into liquor distribution and liquor sales during that era in a big way,” he says, adding that when Prohibition ended in 1933, the city was “determined not to let that happen again — or at least control it.”

A Chicago liquor license might have a lower price tag than one in Philadelphia, but it involves jumping through quite a few hoops.

“Not only do you have to be inspected on this [health department] level, but a lot of other departments have to sign off before you can get close,” says Vettel. “The bureaucracy is considerable.”

Don’t worry, though; the city made a simple 93 minute video walking you through the application process.

And if that doesn’t clear things up, there’s a cottage industry of liquor license expediters eager to help.

Manny Hernandez, co-founder of The Tamale Spaceship, hired one of these for his storefront location on Damen Avenue in Wicker Park.

“We hired that person, we followed instructions, we went through the whole thing,” says Hernandez. “The disappointing part of it is just the last inspection we weren’t able to do it.”

In that final step, an inspector noticed the building next door was functioning as a church, even though it looked like a regular apartment building. Since the church’s entrance was less than 100 feet from The Tamale Spaceship’s, Hernandez wasn’t granted a liquor license.

Restrictions are not limited to land use. For a restaurant to secure a liquor license, any investor with more than a five percent stake must get fingerprinted. Same goes for their spouses. And felons are banned for life from holding a Chicago liquor license.

Beyond that, owners must submit floor plans, property surveys, menus and documentation of the restaurant’s business structure.

And if you’re deemed “a person who is not of good character and reputation in the community” the City of Chicago can say, “no.”

Again, when you add up these requirements, you wouldn’t be surprised to learn that restaurant owners do what they can to avoid a liquor license.

Consider the example of Bite Cafe, which is located adjacent to the The Empty Bottle music venue on Western Avenue. The two businesses have the same owner; Bite Cafe has no liquor license, while the Empty Bottle does. Rather than apply for a stand-alone liquor license for Bite Cafe, the owner has a hallway between the two, which allows Bite’s diners to bring over unopened beer and even bottles of wine from the Empty Bottle. 

Why deal with twice the inspections, headaches and costs when you don’t have to?

A value in and of itself

In Chicago the conditions are perfect for BYOB restaurants to flourish because liquor licensing is so onerous. This theory’s a good starting point, but it doesn’t tell the whole story.

Let’s look at Yuzu Sushi and Robata Grill. It’s one of our questioner Ian Adams’ favorite places to BYOB. And the reason they allow BYOB has little to do with regulations.

Restaurant owners Bua Bun and brother-in-law, Chef Yut Wang, use BYOB as a core marketing component. They had once worked in other restaurants but didn’t feel good about the standard mark up on alcohol, especially for wines that their customers could buy in any grocery store. When they opened their own place, they wanted it to be different.

“If we’re going to sell liquor it’s got to be something the customer cannot get or else the customer is going to feel like we cheated on them,” says Bun. “So that’s why we chose to go with BYOB.”

Asked if she would accept a liquor license if one fell into her lap — no strings attached — Bun pauses.

“I would have to think long and hard about that,” she says. “It would probably give me a month or two of no sleep.”

This adds a new wrinkle to the Chicago BYOB theory: Yes, they’ve spread around Chicago because liquor licenses are hard to get, but over the years people have come to embrace the fair deal BYOB represents.

I think there’s a lot of BYOB because we feel how the customer feels if we were the customer,” says Bun.

It might sound optimistic or even naive, but Ian agrees. He trusts that a BYOB place gives him a good deal, and that you focus on the food — not a price tag inflated by expensive booze.

“If you have a really nice steak dinner, but it’s the most expensive meal you’ve had, you might be thinking more about how you spent too much on the meal and not the fact that it was a pretty good steak,” says Ian. “And I think that it’s almost like the flavor-enhancer of Chicago eateries where BYOBs just make the experience that much more enjoyable.”

More about our questioner

Curious Citizen Ian Adams moved from the West Loop to Ukrainian Village to be closer to BYOB restaurants. (WBEZ/Logan Jaffe)
Ian Adams works for a green tech accelerator and loves eating at BYOBs. So much, in fact, that he moved from the West Loop to the Ukrainian Village neighborhood in part because there are more BYOB dining options there.

He met his fiance, Liz, working on Barack Obama’s 2008 presidential campaign in Chicago. She met Ian and Curious City producers at Yuzu during an investigative BYOB crawl. It was her third time at the restaurant that week.

Andrew Gill is a digital producer at WBEZ. Follow him on Twitter @andrewgill.