The BATF used to be a lot looser about what constituted a "business" for the purposes of an 01 FFL, but times have changed. I have a friend in the free state of NH who just got inspected and had his 01 FFL lifted because he didn't have a "storefront" or other means of establishing that he was actually in the business.
Before Clinton admin, anyone and their brothers uncle could get a Type 01 if
they qualified. He "shook the tree" so to speak and now 80% of the small
dealers are gone.
I don't know if a full blown storefront is a requirement... but
profit motive and hours of operation definitely are. If his logbook is filled
up with mostly personal transfers, that's probably why they axed him on
it. I don't think full blown storefront is an absolute requirement... because
I still know of at least one or two hole in the wall dealers in MA that do
almost nothing but transfers. One I know of offhand keeps absolutely no
inventory.
FWIW, there are certain indicators they look for in terms of being in the
business... profit motive; established by things like having a company
bank account, maybe a corporation even; an insurance policy covering
your "company", etc. There should also be property, or a piece of
property (eg, an office with its own entrance) dedicated to, or soley
intended to, be used for the business. Failure to "express" this
properly often results in loss of license.
Another thing that keeps coming up post clinton is zoning issues... I dunno
wether that is caused by the ATF ratting on people to the locals, or wether
that there is some law that stipulates all FFLs must be in compliance with
whatever local zoning laws exist. Before clinton a bunch of people
used to run them out of their homes. (some still do... )
-Mike