Running a cabaret in Michigan requires a cabaret license at two levels: a state entertainment permit issued by the Michigan Liquor Control Commission under the venue’s on-premises liquor license, and a separate local cabaret license from the city or township where the venue operates. The state permit governs the activity itself. The local license governs whether that activity is allowed at your address. Skip either one and you are operating illegally, no matter how carefully you handled the other.
What the State Permit Covers
MCL 436.1916 sets up the state side. Any on-premises liquor licensee that wants to host performances or customer dancing needs the matching permit before those activities begin.1Michigan Legislature. Michigan Code MCL 436.1916 – Entertainment, Dance, or Topless Activity Permits The categories are narrow and specific:
- An entertainment permit is required before a liquor-licensed venue can host performances, contests, motion pictures, or other entertainment for public viewing.
- A dance permit is required to allow customer dancing on the premises.
- A combination dance-entertainment permit covers both under one document.
- A topless activity permit applies only in counties with a population of 95,000 or fewer, and local governments retain authority to ban topless activity entirely within their jurisdiction.
All activity under these permits has to occur during legal alcohol hours unless the venue also holds an extended hours permit. That extended hours permit lets patrons stay for entertainment or dancing after last call, but alcohol cannot be sold or consumed during those extra hours. Running a DJ set an hour past closing without the extended hours permit is a violation even if the bar itself is dry.
The Local Cabaret License
The state permit gets you legal with the Liquor Control Commission. It does not get you legal with your city. Most Michigan municipalities require their own cabaret or entertainment license under a local ordinance, and the categories and fees vary widely.
Detroit is the clearest example. The city splits cabaret licenses into three tiers:
- Cabaret A: open to the public, three or more live entertainers performing simultaneously, customer dancing allowed. $268 per year.
- Cabaret B: private club format. $99 per year.
- Cabaret C: open to the public, up to two entertainers, no customer dancing. $161 per year.
Booking a third live performer at a Cabaret C venue puts the venue in violation, even if the correct state entertainment permit is in place.2City of Detroit. Nightclub – Cabaret Sections Other municipalities set flat rates. Mount Clemens, for example, charges $150 per year regardless of venue type.3City of Mount Clemens. Cabaret License Application Before you assume anything, pull your own municipality’s ordinance and read it.
How the Application Process Works
You are running two applications in parallel. The state permit attaches to your on-premises liquor license, so if the venue does not already have a liquor license, that comes first. Under MCL 436.1501, applications for on-premises liquor licenses must receive approval from the local legislative body where the business sits before the commission will issue the license.4Michigan Legislature. Michigan Code MCL 436.1501
The local cabaret license runs on its own track. Requirements vary, but Tyrone Township’s ordinance is representative of what most Michigan municipalities ask for:
- A completed application to the township or city clerk with the application fee.
- Written proof from the zoning administrator that the premises meet all zoning requirements.
- Passing inspections from the fire department, health department, and building department. No license issues until the venue clears them.
- Evidence that the venue holds the proper state liquor license and entertainment permit.
- A clean criminal history for the applicant. A state or federal criminal conviction within the two years before the application can disqualify you outright.5Township of Tyrone. Tyrone Township Ordinance 18 – Cabarets; Licensing and Operation
The application then goes to the local governing board for a vote. In Detroit, the required clearances are fire, food safety, certificate of compliance, and treasury, and applicants must submit the state liquor license activity document, proof of ownership, articles of incorporation, and valid identification.2City of Detroit. Nightclub – Cabaret Sections
The two-year criminal history lookback is a hard cutoff in the ordinances that use it. If you have a qualifying conviction inside that window, waiting it out is the only option.
Fees and the Costs That Ride Along
Local cabaret license fees typically run from around $100 to several hundred dollars per year depending on the municipality and category. Fire, health, and building inspections carry their own fees on a per-inspection basis, and those vary by jurisdiction. A rejected application costs you the non-refundable filing fee and delays your opening, which is why many owners bring in an attorney or consultant familiar with the dual state-local process.
Music Performance Licensing
The cost that catches new owners off guard is music. Any public performance of copyrighted music requires permission from the copyright holder, which in practice means blanket licenses from ASCAP, BMI, and SESAC. Each organization represents different songwriters and publishers, so most venues need licenses from all three.6ASCAP. ASCAP Music Licensing FAQs
Fees scale with venue size, occupancy, and whether you have live performers. A small bar with a 50-person capacity might pay $600 to $900 per year for an ASCAP license alone. A larger club with 150-plus capacity and live music can run $1,500 to $2,500 or more. Venues that charge a cover often pay a rate tied to a percentage of door revenue, which climbs quickly on a busy night. There is a narrow exemption for small eating and drinking establishments that only play radio or television broadcasts through a limited number of speakers, but it does not cover live performances or DJ sets. Most cabaret-style venues will not qualify.
Zoning and the Alcohol-Hours Boundary
Two things trip up more cabaret operators than any single licensing rule: zoning and the alcohol-hours limit on entertainment activity.
Zoning comes first, before the lease. Local zoning ordinances dictate where cabaret activities can happen, typically limiting them to commercial or mixed-use districts. A location that looks perfect commercially may sit in a zone that prohibits entertainment uses. Operating in a non-compliant zone risks an injunction that closes the venue until the issue is resolved, and in most cases the venue does not reopen at that address. Verify zoning with the local administrator before you sign anything.
The alcohol-hours limit is the other one. An entertainment or dance permit does not, on its own, let you keep the venue running after last call. Under MCL 436.1916, all activities covered by these permits must stop when legal alcohol hours end unless the venue holds a separate extended hours permit.
Penalties for Operating Without the Right Permits
Enforcement comes from three directions at once.
State
The Michigan Liquor Control Commission can suspend or revoke any liquor license, including the associated entertainment permit, for violations of the Liquor Control Code or its administrative rules. It can also impose administrative fines of up to $300 per violation, either instead of or on top of suspension or revocation.7Michigan Department of Licensing and Regulatory Affairs. Michigan Liquor Control Code, Administrative Rules and Related Laws Under MCL 436.1501, a local legislative body can request that the commission revoke a venue’s liquor license entirely. Losing the liquor license eliminates the foundation the entertainment permit sits on.
Local
Municipalities enforce their cabaret ordinances independently. A venue operating without the required local license or in violation of zoning can face injunctions to shut down, fines under the local ordinance, and legal costs that grow the longer the dispute continues. Once a venue is flagged, it becomes a target for repeat inspections, and the added scrutiny alone disrupts operations.
Federal Copyright
Playing copyrighted music without proper ASCAP, BMI, or SESAC licenses exposes the venue to federal copyright infringement claims. Statutory damages run from $750 to $30,000 per infringed work, and willful infringement can push that to $150,000 per work.8Office of the Law Revision Counsel. 17 USC 504 – Remedies for Infringement: Damages and Profits A single evening of live music can involve dozens of copyrighted works, so a venue playing without licenses is stacking exposure by the song.
Federal Obligations That Come With the Territory
A few federal requirements apply to cabaret-style venues on top of the Michigan licensing structure.
Under Title III of the Americans with Disabilities Act, entertainment venues are places of public accommodation and must be accessible, including wheelchair-accessible entrances, restrooms, and seating, plus admission of service animals in all public areas. A service animal under federal regulations is a dog individually trained to perform tasks for a person with a disability; emotional support animals do not qualify.9ADA.gov. Americans with Disabilities Act Title III Regulations
Venues that handle significant cash, including cover charges, VIP bottle service, and private event bookings, must file IRS Form 8300 whenever they receive more than $10,000 in cash in a single transaction or a series of related transactions. The form is due within 15 days of the transaction that crosses the threshold.10Office of the Law Revision Counsel. 26 USC 6050I – Returns Relating to Cash Received in Trade or Business
Michigan’s minimum wage as of January 1, 2026 is $13.73 per hour. Tipped employees must be paid at least $5.49 per hour in direct wages, which is 40% of the full minimum, with the employer making up any shortfall if tips do not bring the employee to $13.73.11Michigan Department of Labor and Economic Opportunity. Michigan’s Minimum Wage Set to Increase on Jan. 1, 2026 Performer classification is a separate question. If you set the schedule, dictate the playlist, and require attendance at specific times, the relationship looks like employment rather than an independent contract, and misclassification creates liability for back taxes, penalties, and benefits.
One boundary worth naming: not every entertainment event requires a full cabaret license. The Liquor Control Commission can issue temporary daily dance, entertainment, or combination permits to existing licensees for short-term events, and some non-profit organizations qualify for special event permits under different rules. These still require their own application and local approval, so they are not a workaround for last-minute planning.