Food Truck Regulations Drive Controversy

6 Min Read By: Keith H. Berk, Alan D. Leib

IN BRIEF

  • The rise in popularity of food trucks has led to tension between fostering entrepreneurship and protecting the interests of those with significant investments in established brick-and-mortar businesses.
  • Cities have imposed state and local health and food safety regulations on food trucks as well as more controversial public property bans, restricted zones, proximity bans, and other restrictions.
  • But civil liberty groups have taken up the cause of the food truck vendors and have become emboldened by successful litigation.

 Are food trucks the underdog of the food industry or are they a force to be reckoned with? In recent years, food trucks have been hitting city streets in record numbers. This trend is driven, not only by the food industry's desire to provide new and innovative dining options, but by individuals' desire to achieve economic independence. For many, mobile vending is an entry point to entrepreneurship and a way to establish a living.

Social media tools, such as Facebook and Twitter, have greatly impacted the way that many food trucks market to customers. Food trucks rely almost exclusively on social media to advertise their brand, maintain customer relationships, and increase their accessibility. It is now possible for a food truck to tweet locations in advance so that customers can be waiting when the trucks arrive.

The rise in popularity of food trucks has not gone unnoticed. Opponents have attacked the mobile vending industry by arguing that food trucks are unfairly stealing customers away from brick-and-mortar businesses. To many opponents' delight, various cities have imposed a myriad of regulations on food trucks. In some cases, these regulations make mobile vending an impossible or unprofitable business. The purpose of this article is to provide a brief general overview of the types of regulations imposed on mobile vending operations as well as to highlight some recent developments surrounding these regulations.

Overview of Mobile Vending Regulations

Food truck operators must comply with a variety of regulations. Not surprisingly, food truck operators are typically subject to a variety of state and local health and food safety regulations including (1) approval of food truck design, (2) approval for in-truck cooking equipment/configuration, (3) vending permits, (4) requirement for food truck personnel to obtain food safety certification, (5) periodic health inspections and (6) food safety requirements for depots where food stocks are replenished. More controversial, however, are local regulations that dictate how, where and when food trucks can sell food. These types of sale regulations include:

  • Public Property Bans. More than 10 major cities ban vending on public property, such as on streets and sidewalks. Vendors subject to such bans must contract with private property owners to vend on their property.
  • Restricted Zones. Many cities restrict the areas in which food trucks may operate. Restricted zones often include potentially lucrative areas, such as downtown commercial districts.
  • Proximity Bans. Proximity bans limit how close street vendors can park to certain types of businesses, typically brick-and-mortar restaurants. Proximity bans address the complaints of certain businesses who do not wish to have food trucks park near their place of business.
  • Stop-and-Wait Restrictions (Ice Cream Truck Rules). A handful of cities make it illegal for food trucks to stop and park in order to wait for customers. Instead, food trucks must be flagged down by a customer before they can park and serve the customer. Stop-and-wait restrictions make it difficult for food trucks to establish regular stops and develop relationships with customers.
  • Duration Restrictions. Food trucks that are allowed to stop and wait for customers may be limited in the amount of time they can remain in one spot. For instance, in Chicago, a food truck may not sell food for more than two hours on any one block.

 

Recent Developments in the Mobile Vending Industry

Lawsuit Against the City of El Paso

In Castenada v. City of El Paso, No. 3:11-CV-00035-KC (W.D. Tex) (Jan. 26, 2011), four food truck vendors sued the City of El Paso's regulations over a regulation that banned food trucks from operating within 1,000 feet of restaurants, grocers, and other food-service establishments. These vendors argued that the regulation made it nearly impossible to operate profitably anywhere within El Paso. As a result, many mobile vendors in El Paso faced the possibility of losing their primary source of income. The food vendors argued that the regulation's only purpose was to protect established businesses, which is not a legitimate government interest that would allow the government to infringe upon the constitutional rights of food vendors. As a result of the lawsuit, El Paso agreed to repeal the regulations.

California Bill Prohibiting School Trucks Near Schools

A proposed California bill recently sparked intense debate over the mobile vending industry. (California Assembly Bill No. 1678.) The bill, spearheaded by Assemblyman Bill Monning, would have prohibited food trucks from vending within 1,500 feet (approximately three blocks) of any elementary, middle, or high school. Opponents of the bill argued that it would eliminate the food truck industry in populated urban areas, where almost the entire city is within 1,500 feet of a school. On the other hand, supporters argued that the presence of mobile food trucks at schools would undermine state efforts to establish nutritious school food programs. On March 29, 2012, after intense pressure from industry groups, Monning released a statement taking the bill out of consideration.

City of Chicago Regulations

The food truck industry has thrived in cities like Los Angeles, New York, San Francisco, and Austin. This is not the case in Chicago where food trucks are subject to a wide array of legal restrictions imposed by the city. These restrictions include prohibitions on preparation of food on a truck or cart, serving customers before 10:00 a.m., and stopping within 200 feet of a restaurant. A bill, which was introduced in the city in June 2011, would lift the ban on food preparation in mobile food vehicles. Mayor Rahm Emanuel originally supported the bill but has recently equivocated on his support. The bill has been tied up in various committees for nearly a year and its future is uncertain at this point.

Impact of Regulating the Mobile Vending Business

Supporters of the mobile vending industry view food trucks as an avenue to entrepreneurship and a way to provide consumers with innovative products. Opponents, on the other hand, cite two primary arguments as reasons for eliminating the industry: health concerns and unfair competition to brick-and-mortar restaurants. For instance, critics of the industry question whether food can be prepared safely and whether health regulations can be properly enforced on a food truck.

Health concerns can be addressed by appropriate regulations. The real issue is whether food trucks unfairly steal customers from brick-and-mortar restaurants. This issue has become a political football in a number of municipalities as politicians attempt to regulate to protect brick-and-mortar restaurants that often have political clout and generate significant sales tax revenues. On the other side, civil liberty groups have taken up the cause of the food truck vendors and have become emboldened by their successful litigation in El Paso. In light of these competing interests, we expect that the regulation of food trucks will continue to generate controversy and litigation. Hopefully, the result will be that regulations strike a balance between fostering entrepreneurship and protecting the interests of those with significant investments in established businesses.

ABOUT THE AUTHORS

Chicago, IL

Keith H. Berk

Keith H. Berk devotes his practice to serving middle-market businesses, oftentimes acting as part-time general counsel. Keith emphasizes a business approach to the practice of law focusing on growth…

Chicago, IL

Alan D. Leib

Alan D. Leib devotes his practice to serving closely held and middle-market businesses. Alan is involved in all aspects of business planning and has significant experience in a variety of commercial…

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