 It's a business in Hawaii with Reg Baker. Re-broadcast live every Thursday afternoon from 2 to 2.30 in the downtown studios of Think Tech Hawaii in the Pioneer Plaza. We are a show that focuses on positive and motivational stories about businesses and their owners in Hawaii. There are challenges, there are challenges anywhere you go, but there are ways around the challenges to overcome them and to be successful regardless. We also have guests on the show periodically that support small businesses and help them through the minefields of doing business in Hawaii. Today is one of those guests. We've got Mia Abciana, who is an attorney, covers a lot of different areas of law, but what we're going to be talking about today is law specific to the restaurant and bar industry, which has a lot of nuances and challenges and Mia is going to explain some of this to us today. Welcome to the show, Mia. Thank you. Before we jump into the details of all these challenges in the bar and restaurant industry, tell us a little bit about yourself. You've been in Hawaii for a while. Were you born here? I was. I was born and raised in Cragmula, went to school at Punahou from kindergarten until I graduated. Congratulations. Thank you. I survived. I did. Then from Punahou, did you stay here to go to school or did you go to school in the mainland or what happened then? I initially went away to Seattle and I went to college at Seattle University for two years and ended up returning home to Hawaii to finish college at the university. At UH Manoa? Yes. All right. Then did you go right into law school after that or was there a break? I did. I went straight into law school. I went to Santa Clara University. Really? So back to the mainland? Yeah. And then you finished law school there? Yes. Very good. And did you work in California at all? I did. I lived and worked in Orange, California for a few years. I think about four years. Now, Orange, California, is that different from Orange County? It is in Orange County. But the city's name is Orange. Interesting. I never knew that. I could see the fireworks from Disneyland from my office window, which was great and depressing at the same time. Well, I guess. You could have been there to participate and have some fun. Yes. Well, that's very interesting. And how long did you practice in California? I practiced for about four years in California. Very good. And then what motivated you to come back home? I always planned on coming home to raise a family. So as soon as I had my first son, my husband and I decided to move home. Oh, well, we're very lucky that you did. Thank you. Thank you for coming home. And you've been home for how long now? Since 2008. Wow. Okay. So we're going on to almost 10 years. Almost 10 years. Very good. And when you came back, did you open your practice right away or how did that transition happen? My first job coming home, I was a deputy prosecutor with the City and County of Honolulu. Really? Good for you. That was a very interesting experience. Yeah. And how long did you do that? I did that for about almost three years. Three years. So you must have had some pretty interesting cases during that three year period. It was never boring. Good for that school. That's a good job to have then. Definitely. Yeah, I guess in that capacity too, and from some other people I've talked to, I guess it can get exciting, but I guess very stressful too. I mean, people can be upset with you. A little bit. Right. When I left, I was in the domestic violence unit, which is particularly difficult. You see a lot of very upsetting things every day. Disturbing. Disturbing things. And occasionally, everyone was upset with you. The defendant was upset with you. Your witness was upset with you. The lose-lose situation. A little bit. That's too bad. Well, but I guess you were there for three years, and then what motivated you to go and open your own firm? What happened next? I joined corporation council with the city and county, so I stayed in the city. That was when my old boss Peter Karla became the mayor. I worked for the department of corporation council. That was a city attorney for a few years. So when he became mayor, was that an opportunity that he saw for you and he wanted you to work with him or did you do that on your own? I did that on my own, but it did work out pretty well because a lot of the same players were working for the mayor's office. You knew who they were. Yeah. Good. So I made for a good working environment and nice relationships. Yeah. Yeah, that's important in Hawaii. That's important anywhere, I guess. Yeah. And so, boy, you've got some good experience. You've got the city prosecutor, then you had the corporate council. I mean, you've had some good background experience. And then what did you do after that? So after working for corporation council, which included an assignment with Lebanon liquor commission. After I was presented with the opportunity to work for a private law firm in town, it was then called Bronster Hoshibata. Bronster. That's a familiar name. Yeah, Marjorie Bronster. She's amazing to work for. She's one of the smartest people I've ever met. Good. One of the hardest working people I've ever met. So it was a great opportunity. And so I worked for that firm for a couple of years and then opened my own practice. All right. So you've had some good opportunities with some steep learning curves to learn a lot of good information that you're now able to, I guess, utilize for the benefit of your clients. Definitely. It definitely helped a lot. Very good. And so you've been having your own practice. You've been in practice now on your own for how many years? Since July of 2015. So two years now. Two years, all right. And it's been going well, I assume. I guess there's always challenges, you know, and I get, let me just share or ask you to share. What was your biggest challenge of starting your own practice? The fear, I think. It's terrifying being on your own, being the one person responsible for making sure there's more every month. Yeah. And bringing in the money and just handling the everyday talk to bottom. And this is coming from a previous city prosecutor, right? I mean, you're used to dealing with fear, but this was even more scary. It was. It's incredibly daunting to go out on your own and be your own boss. Yeah, there's a lot of, I guess, stress, not only for yourself, but you also have to make sure that you're taking care of your family, your employees, your clients. You know, there's a lot of components that weigh on you. Yeah. That you've got to really deliver. Otherwise, a lot of people will be disappointed. Definitely. Yeah, and I guess that could be pretty daunting, but, you know, it's something that I think all businesses generally have to deal with when they're first starting out. But you've gotten through that. Was there, you know, you had a family too. So was there any tricks to, you know, getting through this? I mean, what helped you get through this fear or phase? It's one of those things that you just, you do it because you've helped you. So you get through it and you just try to get from day to day. And you're surprised at how you're able to overcome these challenges along the way. Attitude is important. Sure. Being disciplined. Yeah. You know, almost having to force yourself to do it even when it's a little scary. You know, you got to have the discipline, the fortitude, you know, having the attitude and accepting rejection. Yes. You know, that was something I always had a hard time with. Is it because I generally like to have people like me. Right. And when I go out and try to sell my product or service or whatever it is that I'm trying to do and they say, no, it's hard not to take that for me anyways, personally. You know, what did I do wrong? How come this isn't working for them? And so handling rejection is a challenging part of it. Sure, it is. But I think the more experience you get with dealing with clients, you understand that there's usually a reason why. If it's not the right fit for the client, it's not going to be a right fit for you. And that would have turned into a problematic relationship in the end. You know, and what's interesting is I think once you get past that initial phase of a year or two years, now you're in a position of maybe being a little bit more selective. And, you know, when you're first starting out, you have to take almost whatever comes along to help pay those bills and keep the practice going. But once you've been doing it for a while, you can be a little bit more selective. And so if that fit isn't there, you're able to say no. Right. That was the other thing that I had a real hard time with is saying no. You know, I always wanted to help people and having some revenue come from it was always nice. But saying no can be difficult, but could be the best thing to do sometimes. Definitely. Now, I guess as an attorney, that's probably something you advise your clients on sometimes, is that you've got to be able to say no before it gets too much out of control. Of course, yeah. You need to learn to identify the red flags along the way and avoid some of these problems. Before they become problems. That's right. And we were talking a little bit earlier that one of the areas that you have noticed that your clients have a particular challenge in, or some of them have the same kind of problem, is not documenting or not having a contract when they're trying to, I guess, close a deal or take advantage of an opportunity. How often do you see that? More often than I care to. I've had more than a few clients who have come to me with big problems that started because they got into some kind of business arrangement or business deal with someone without a written contract. Everyone's obligations were unclear. And then there was a dispute and inevitably they end up looking at lawyers. And sometimes memories aren't always the best. And sometimes people tend to remember what they want to remember or what they would prefer to remember. And just having it in writing is always, I guess, the most prudent thing to do. And that's something that you help clients with. Yes. We're going to be taking a break shortly. And when we come back, what I'd like to be able to do is get more specific. Now there's a component of your practice and because of your liquor commission days, I guess you've got particular experience with this. But, you know, restaurant and bar industry has a lot of rules and regulations. And there's some challenges and issues there that maybe we can talk a little bit about after we come back from break. Sure. All right. This is Business in Hawaii with Reg Baker. We're here today talking with Mia, who's got some real good experience in restaurant and bar industry. And we're going to go on short break. We'll be right back and we're going to dig down into that. Aloha. My name is Steven Phillip Katz. I'm a licensed marriage and family therapist and I'm the host of Shrink Rap Hawaii where I talk to other shrinks. Did you ever want to get your head shrunk? Well, this is the best place to come to pick one. I've been doing this. We must have 60 shows with a whole bunch of shrinks that you can look at. I'm here on Tuesdays at 3 o'clock every other Tuesday. I hope you are too. Aloha. This is Business in Hawaii with Reg Baker. Today I'm sitting with our guest, Mia Oceana. And we are talking a little bit about some of the legal issues in the restaurant and bar business. She has some experience working with the liquor commission and she's going to give us some of the do's and the don'ts and maybe some of the flags that people have to watch out for. Mia, what are some of the issues that you're currently dealing with in the restaurant and bar business? I mean, it's a fairly complicated area from a legal standpoint, isn't it? It is. And I think a lot of people get into the industry without understanding beforehand some of the issues that might come up along the way and they're constantly surprised by how often they're going to need the advice of a lawyer. Well, and what's interesting is not only do you have, if you've got food preparation, there's a whole set of rules related to that and this is on top of just general business. And then if you've got liquor, there's another whole set of rules and I see you have a couple of books here on some of the rules and it looks like there's probably a couple hundred pages there of different types of rules and regulations that people have to be familiar with. Yes, so there are two sets of rules that govern establishments that have a liquor license. There are the liquor laws of the state of Hawaii which covers the entire state from Hawaii to the big island. And then there are specific liquor rules for the city and county of Honolulu. So each county has their own liquor commission that has their own set of administrative rules that regulate each license establishment on that island. And I have heard that sometimes the rules of the liquor commissions on the different islands aren't always the same. That's true. They are not always the same. So that can lead to some confusion for licensees who have businesses on more than one island. You have to be knowledgeable of the rules for the island on what you're operating. Right, and that's just an additional layer of complexity. I mean, if you've got a restaurant that's located on different islands, not only do you have the challenges of managing a various or multiple office type operation with all the staff, but then there's also rules and regulations that are different depending upon that island. And so it just gets another layer of complexity. And how often do these rules and laws change? It depends. There is a rulemaking process that each commission needs to follow that's spelled out by the statewide statutes. And each commission will undertake a rule change or other amendments along the way during the year. But they don't tend to change that dramatically from year to year. Every once in a while, there's a big change. For example, this year, the Honolulu Liquor Commission got rid of what's called the stacking rule, which used to mean that you could only serve one drink to a customer at a time. They couldn't buy more than one. That used to only be true of what's called a concession. So for example, when you're at Aloha Stadium, you could buy more than one drink at a time. But now that applies equally across the board to restaurants and bars. So in other words, I can be a true two-fisted drinker if I want to be, and it's legal now. You could. Hey, what a deal. But even if they don't change that often, you need to stay on top of it. Because once you set up and get your license and you're operating, you can't just forget about it because these rules are going to be changing occasionally. And somebody has to be keeping an eye on it and let the owners know what is allowed or not allowed anymore. Definitely, definitely. Is that one of the services that you do? I mean, do you help your clients? If they're a client, says the law has changed, do you reach out and let them know some of these different things and how to react to it? Yes, I try to keep my clients surprised as to different rule changes, and not just rule changes but policy changes within the liquor commission. Do they tend, does the liquor commission tend to look at different elements of the rules and laws? Or, you know, for example, I'm knowledgeable a little bit with the IRS. And they tend to rotate their focus to different aspects of the code and the regulations, you know, as a point of focus. Does the liquor commission do the same thing? Do they rotate things around, or do they just kind of look at everything across the board? I think they take a pretty good look across the board at everything. And they focus on issues that they see as problem areas. The administration there is pretty good at identifying issues that become obstacles for certain types of licensees or other administrative problems along the way, because they see it all. I'm sure. What do you see, and from your experience, what are some of the big issues that if you had to pick maybe the top two or three that tend to trip people up the most, what do you think those would be? So one would be for operating establishments, being familiar with all of these little administrative rules that don't necessarily have anything to do with the way that they're operating, but have to do with the way that their business is governed. So for example, there are different business entities that you can form when you're running a business. There are incorporations, there are LLCs, there are partnerships, right? And each entity has their own set of rules. Even within the liquor commission, there are different rules that are applied to LLCs versus a corporation. Really? Wow. So if you're, for example, going to be adding a member, deleting a member, changing who are officers within your organization, you need to know that the liquor commission has to be apprised of it. And in certain instances, they're required to approve it before it happens. And so many businesses are not aware of that, and that becomes then a potential violation. So hypothetically, if I was a business, a restaurant that served liquor, and I wanted to bring in an investor to help me grow a little bit, take it to the next level, expand, whatever the reasons, and that investor wanted an equity. Maybe they weren't going to be involved in the business, but they wanted to have an equity interest in the business. Would that be the type of situation that you would have to take a look at to inform the liquor commission and maybe even get their permission? And it's a permission, not so much of having the investor, but approving the individual who is the investor. Is that right? Yes, it is. So again, depending on what type of entity the business is, you may or may not need advance approval from the liquor commission. You may simply need to inform them, but I'm always interested in who is becoming an equity shareholder in that entity, because by law, none of these shareholders or equity members can be a convicted felon, for example. That would automatically disqualify someone for a liquor license. And there are other restrictions that apply to the individuals. So that's something that you definitely need to take a look at. Right. If that person just wanted to lend money to that company and not take an equity position, then that would be less of an issue. Yes. Okay. So that's one of the issues. What are some of the others that you've encountered? The other big issue that I've seen happens when you're selling or transferring your business. If you're giving up your current location and because the liquor license is tied to the physical location of your business. So it's not with the person, it's with the physical location. Correct. So when you're transferring that business, I have seen it become an issue where two business owners will try to conduct the transfer themselves and they'll do it without any written agreements. And then they run into trouble not only with the business transaction but with the liquor commission side because the only person allowed to operate under the liquor license is the names licensee. If someone else comes in and operates under that liquor license, that's a violation. They could lose the license that way. So there are certain agreements and papers that need to be set up before the transfer takes place in order for that smooth transition of the business. You know, that makes a lot of sense. And even without the complexity of the liquor commission's, you know, oversight, anytime you sell a business, I mean, you're talking about some fairly large dollars here and potential liabilities. And so you need to make sure that it's done correctly. And as we talked earlier, having a contract that's written actually can prevent a lot of problems from occurring down the road. That's right. So if there's any restaurant or bar out there that's got any thoughts about selling the business or bringing in an investor, they should be talking to you to make sure that it's done correctly. Definitely. I mean, it sounds like a simple proposition on its face, but when you get down to the details, it's very, very complicated. And it would be great if someone could navigate that on their own, but it's not a good idea. Inevitably, something will get missed and you really do need someone with some knowledge of not just the liquor rules, but the other applicable rules and laws to that transaction to step in and make sure that it's done correctly. Well, any sale of a business requires certain filings to be done, which is separate from the liquor commission. And a plug for CPAs, I guess, is also tax implications. So there's a lot of moving parts and they all got to be analyzed to make sure that they're all structured properly. Exactly. Yeah. Now, we've got probably about a minute left. Is there anything else that's like a big flag that you want to warn people about? I think anytime you're making any type of change in your business, whether it's a physical change to your premises, a staffing change, I think it's always just a good idea to run that by someone who has a working knowledge of all of the liquor rules and laws just to make sure that you're not running a foul of any of them. Right. You know, spending a little, you know, a few hundred or a thousand dollars in preventative medicine could save you a whole lot of tens of thousand dollars of fixing it later. It could save your business. Well, and that could be a lot more. So it's always prudent, I guess, to get that good advice. Yeah. Thank you, Mia. I appreciate you being on the show today. I think we probably have enough to talk about that we could fill another show about some of the other issues that go on in a restaurant and a bar environment that attorneys just need to be keeping an eye on. So maybe we'll have you come back again soon. This is Business in Hawaii with Reg Baker. We were here today talking about the Liquor Commission and some of the rules and regulations in that industry, and there was a lot of them, a lot of warning flags. We broadcast live every Thursday from 2 to 2.30. We'll see you next week. Until then, aloha.