How much is the licence? It sometimes appears to me that people are going to a lot of trouble to try to avoid a fee which may not really be that much. In the UK the PRS fee for holding spontaneous and unpromoted sessions by customers is under £90 a year. If it's a promoted performance with no entry charge it's about £10 a time. If the venue is reluctant, a whip-round among the musicians should cover it, and it's a small price to pay for the opportunity to play.

I get the impression that the US music rights organisations are more rapacious, but is it actually worth the trouble of ensuring that everything you play is PD? As this thread shows, this can be tricky to determine. Once it's licensed, you can play what you like.