Concession Agreements

What is a Concession Agreement?

A concession agreement is an agreement between certain licensees and an unlicensed entity to be able to sell alcoholic beverages at their business. This does not include extending gambling activities to the unlicensed business.

Which Licenses Can Have Concession Agreements?

  • On-premises consumption beer and wine licenses (16-4-105, MCA) may have up to three active concession agreements. Excludes veteran and fraternal licenses issued on or after January 1, 2021.
  • All-beverage licenses (16-4-201, MCA) may have up to three active concession agreements. Excludes veteran and fraternal licenses issued on or after January 1, 2021.
  • Resort licenses (16-4-213, MCA) located outside a quota area as defined in 16-4-201(1) or (2), MCA, may have up to one active concession agreement.

How to Apply

  • The licensee and concessionaire must fill out a concession agreement request form for each concession agreement.
  • For each concession agreement request the form must be sent to the Department for approval before commencing.
  • The concessionaire must pay a $500 application fee for each concession agreement.
  • The concessionaire must pay a $100 processing fee for each concession agreement.

What the Agreement Must Include

The concession agreement must demonstrate that the licensed premises is a contiguous premises that includes the space used by the concessionaire. An alteration of the existing licensed premises may be needed to incorporate the space used by the proposed concessionaire. 

The agreement must also stipulate that the licensee retains ultimate control over and responsibility for operating the license, including:

  • ordering, purchasing, sale, and service of alcoholic beverages;
  • the right to discipline or otherwise sanction any employee in relation to the service of alcoholic beverages;
  • reconciling the proceeds of alcoholic beverage sales at least monthly;
  • terminating the agreement with cause. Cause includes includes but is not limited to any violation of Title 16, and the sale or transfer of the license; and
  • exclusive operation of all gaming activities, if the licensee offers any gaming.

Concession Agreement Rules

Allowed

A licensee may:

  • Share employees with the concessionaire.
  • Enter into a management agreement.
  • Compensate the concessionaire for alcohol sales as a percent of gross alcoholic beverage sales, a percent of employee overhead, a fixed dollar amount, or some combination of these.

Not allowed

Concessionaires may not sponsor catered events. Exception: licensees with a Guest Ranch designation.

Modifying an Existing Agreement

  • Other than changes to compensation, the licensee must submit any proposed modifications to the department for review and approval. Changes can include, but are not limited to, license ownership and parties of an existing agreement choosing to operate under 16-4-418, MCA.
  • The $500 application fee does not apply to modifications of existing agreements that do not elect to operate under 16-4-418, MCA.

Canceling an Agreement

  • Licensees must notify the department when a concession agreement has been canceled.
  • The department will review the notification and determine if an alteration form is required.

Annual Renewal

Concessionaires with new agreements received or approved after January 1, 2021, must pay an annual renewal fee of $100.

  • Annual renewals are due June 30th.
  • Does not apply to concession agreements in effect or submitted to the department for approval before January 1, 2021, unless the licensee and concessionaire have elected to operate under the provisions of 16-4-418, MCA.

Grandfather Clause (pre-January 2021 agreements)

Licensees with approved concession agreements in effect or concession agreements submitted to the department for approval before January 1, 2021:

  • May have more than 3 existing concession agreements if they were previously approved or applied for unless they choose to elect to comply with 16-4-418, MCA.
  • Concessionaires are not required to pay the $100 renewal fee as long as they continue operating under the original concession agreement.
  • May submit an updated concession agreement to change the structure of the compensation agreement to be able to operate under the new provisions.
  • May remain in effect until a licensee applies for and receives department approval to change ownership or location of the license.
  • May have the terms of the concession agreement extended indefinitely.
  • May be assigned to new concessionaires operating in the same premises as long as the provisions of the concession agreements are otherwise unmodified with Department review and approval.

Allows veteran and fraternal organizations that had a license under 16-4-201(8), MCA and concession agreement in place on or after January 1, 2016, to use or obtain a veteran or fraternal license and enter into concession agreements.

Legal References

All licensees must comply with all federal and Montana alcoholic beverage laws and rules. See sections 16-4-213, 16-4-406, 16-4-418, and 16-6-306, MCA, and ARM 42.12.133.

Updated September 2024. Please note the information in department communications may have been modified, superseded, or made obsolete by changes in federal or state law or the Administrative Rules of Montana. To verify the current validity of any Department of Revenue communication, please contact us at DORCARDEducation@mt.gov.