The New York State Liquor Authority issued a revised draft Advisory today labeled “Contracts That Compensate A Third Party Provider (“TPP”) Of Good Or Services With a Percentage of The Licensee’s Sales, Profits or Revenues.” The draft is available at:
Replacing the failed draft Advisory issued in late 2019, this new version intends to cover all situations where a TPP shares revenue with a retail licensee, such as landlords, managers, delivery services, e-commerce, and internet platforms that provide advertising or accept or forward food and beverage orders, promotion companies, fulfillment centers, and others similarly situated. The draft confirms that in most cases a flat fee arrangement is compliant with the law and would not require any notice or filing with the SLA if it is commercially reasonable in the view of the SLA. Payment to the TPP of 10% or less also does not require any filing. All other TPP percentage agreements require the license holder to co-license the TPP. It contains a number of other notice and filing requirements. This Advisory, if passed, would be retroactive and apply to TPP percentage agreements already in place. The public has two weeks to comment on this draft, and it will be discussed by the SLA at its full board meeting on May 26, 2021.