Never heard of this club but Mt. Airy is just a little north of where I live. Seems like there is a lot of red tape required to cover a song. I would have never guessed the the venue would be responsible for what a live act played.
I can see asking for some compensation if anyone records and makes money directly off of that recording but I never thought that covering a song live required any rights. IMO, the original artist would sell more copies of their songs if someone heard them live and liked them.