Applying For An FFL – Five Things Not To Do
A word on terminology.
Readers will find throughout this guide I use phrases such as “the proposed firearms activity”; and “the firearms business in which the applicant will engage”, or “the proposed business”; as well as other like terms. The reason these terms and phrases are used is because it tends to confuse the issue when words and phrases such as “gun business”, “firearms store”, “gun shop”, “gunsmith shop”, and others are used in certain contexts. These terms, although common vernacular, are not used in the regulations or the law, and can cause confusion if not applied properly.
So the long broad phrases are used throughout this article in order to avoid confusion that could be created as a result of a misunderstanding of the application of certain phrases, as well as the words Dealer, Manufacturer, Gunsmith, etc. Using these words in some contexts tends to confuse the issue as well, if the reader does not accurately understand the definition and all its implications.
Five Common Mistakes FFL Applicants Make Leading to Withdrawal of an Application
The withdrawal of an Application for a Federal Firearms License (ATF F 7) is not an uncommon occurrence. A number of things can go wrong during the licensing process causing an applicant to withdraw. Some are as simple as the applicant just changing their mind, not having the funds to continue with the enterprise, or as complex as the inability to qualify for a zoning permit based on the square footage of the premises or lack of bathroom facilities. These examples are based on first hand knowledge of actual cases. ATF does not keep this type of record to my knowledge.
Application withdrawals are generally the result of poor planning, lack of knowledge, or lack of effective communication, and are typically associated with not having a proper premises from which to conduct business.
1) YWhat Are You Doing?
One of the most common mistakes made by applicants for a federal firearms license, is not having a proper business plan and understanding the exact nature of the business in which they plan to engage. It’s not uncommon for an applicant to have to withdraw an application because they’ve failed to properly analyze the local permitting and licensing requirements for the particular business they planned to engage in.
For example, someone seeking a license to deal in firearms may also have in mind activity which requires a license to manufacture firearms. Regulations regarding the need for manufacturers license in certain circumstances can be complicated. Furthermore, occupational licensing and zoning issues are complicated further by the need to qualify as a manufacturer or as a gunsmith.
Applicants at times do not understand activities such as assembling firearms can be considered manufacturing and usually are. Sometimes this fact is not realized until the applicant is sitting in front of the ATF investigator who is conducting the qualification inspection. Dealing with this type of situation at that point will usually lead to a withdrawal of the application.
It is possible to overcome the situation, if the applicant is properly advised and understands the licensing process. ATF has certain obligations in accordance with regulations and must abide by them. Applicants for a FFL are typically unaware of these obligations and how to use regulations to their advantage.
The applicant should keep in mind that it is not ATF’s responsibility, nor their duty to guide applicants through the licensing process. ATF’s job is to simply investigate whether the applicant is qualified under the GCA or other applicable law.
Therefore, applicants for a federal firearms license should critically analyze their wants and needs, and determine the exact nature of the business they intend to conduct. The applicant should consider all possibilities and likely probabilities. The applicant can then properly address any local issues relative to zoning or occupational license requirements, as well as possible issues related to lease agreements or other restrictions on private property.
2) When Is Yes Really No?
What occurs frequently is an applicant will contact local authorities to ensure the proposed firearms activity is not prohibited by local ordinances. The applicant will get an “ok” from someone who is theoretically qualified or able to give the opinion that the firearms business is not prohibited.
Under most conditions, this is perfectly fine but not ideal. In theory, the applicant has done their due diligence and verified the proposed firearms business is not prohibited, and certified as such on the ATF F 7 prior to submitting to ATF. However, as anyone can see here there’s plenty of room for things to go wrong. The applicant actually has no proof, other than the word of the individual they spoke to, that the business will be approved. Many times, this individual is a clerk and not someone who has authority.
We are assuming a number of things here.
1) The proposed firearms business structure was explained fully and properly
2) The person hearing the information actually understands all it’s implications
3) The person actually has authority and is correct in their assessment.
There are other possible problems to list here, but one can see that the applicant has left room for things to go wrong very fast.
The result at times is a miscommunication of the business plan to the official, or the official made assurances without having accurate information. There may be zoning restrictions on the property the official was not aware of at the time and are now being discovered. The official may not have accurately understood the type of business to be conducted., etc.
We expect government officials to always be accurate and speak to issues for which they have the authority to make decisions. Unfortunately, this is not always the case, and as business people we have to position ourselves to be on the right side of these issues, with clarity and accuracy to the greatest extent possible.
3) Do I Really Need Those Permits Now?
It is not absolutely necessary to receive all permits authorizing the business prior to submitting an application to ATF. It is not absolutely necessary for ATF to examine those permits prior to issuing the license. However, it is usually in the best interest of the applicant to secure these permits and ensure that documentary proof is available for ATF during the qualification inspection.
It’s is always best to ensure the business is approved by securing the proper zoning permits and occupational license prior to submitting the ATF F 7 if at all possible. Having the documentation and proving to ATF the type of business proposed does not violate local codes or state law is the preferred position to be in.
At best, not having secured the permits will delay the licensing process. At worst in may bring the process to a halt if a complicated issue is discovered which should have been identified and addressed prior to submitting the application to ATF.
4) Because Joe1975 Said So?
Relying on hearsay, internet blogs and forums or even the local FFL for advice on getting licensed is a mistake. There’s just no other way to say it. The internet is full of wrong and sometimes outright dangerous information about the FFL licensing process. Even in instances when advice is essentially correct, you are only getting half truths at best; and a half truth is usually a whole lie.
Licensing situations are always unique, and an experience had by another person, although similar to your situation, is likely not the same at all. I’m speaking to the average small business owner here. Just because something is legal or advisable in one zip code, doesn’t make it so in another. At the end of the day, the person on a forum has no vested interest in your company’s success, and is probably nowhere near qualified to be rendering such advice.
Another issue with many internet boards and forums is some of the advice is based on hubris, emotion, and the desire to make the law fit into somebody’s own needs and wants. This will likely not help you in getting licensed as a federal firearms licensee. Be cautions when reading and taking advice from these sources.
5) ATF And Murphy’s Law
It’s not uncommon for FFL applicants to have a proposed business location in mind, but not have actually secured the location prior to applying. Obviously, this is generally associated with a commercial location and not a home FFL. Applicants at times will submit applications without having a lease or other agreement indicating the applicant has control of the proposed business premises. The decision to do this is likely based on the need to expedite the licensing process and get the business in place as quickly as possible. The applicant is essentially taking a chance that they can secure the location quickly; probably based on conversations with landlords or property owners.
What frequently happens is that the deal falls apart and the applicant is left to look for another location. Based on the needs of the applicant, looking for a brand new location from which to conduct business may turn into a long process. Meantime, ATF has to act on the application submitted and may not be amenable to prolonging the process. ATF may request the applicant withdraw the application and apply again when they have an actual premises secured. ATF will generally not put an application on hold while applicants resolve this type of problem.
As with anything related to the FFL licensing process, this situation has a number of possible solutions and alternatives to withdrawing the application. However, as previously stated, it isn’t the government’s function to advise applicants on the licensing process, or to guide and council them on possible options. So withdrawal of the application becomes the narrow alternative presented to the applicant.