November 01, 2017 GPSolo

A Taste for Pop-ups and Food Trucks

Diana Laskaris

When Matt Maroni lost his job as executive chef at a posh, private Chicago club in 2009, he knew he didn’t want to continue doing the same thing somewhere else. He took stock of his savings and his skills. His entrepreneurial spirit took over when he decided to start a mobile food operation, now commonly called a food truck. But back then, not only were food trucks uncommon in Chicago, his would be the city’s first. He bought a postal truck on Craigslist for $5,000 and fit it with heating units. He perfected his recipes for the “naan-wich,” a burrito-style wrap using naan bread informed by Indian flavors. Thus, the Gaztro-Wagon and the food truck movement in Chicago were simultaneously born.

But what sounds like an easy forward march was far from it. The city was very protective of its existing brick-and-mortar restaurants. Maroni knew he was prohibited from cooking on his truck. He also learned about a variety of legal and administrative hoops he would have to jump through, costing a lot of time and money. But when he finally launched his concept, the long lines and rave reviews made it feel worthwhile.

Culinary pursuits have taken on cultural prominence in the past decade or so. No wonder movable feasts offered by food trucks and pop-up restaurants have proliferated across the country as diners seek out new exciting and memorable food experiences. But purveyors of mobile food experiences and state and local regulators often clash over basic demands of this booming sector, creating a hodgepodge of laws that vary from one jurisdiction to another.

With this challenge in mind, we’ll explore the state of the food truck and pop-up restaurant industry, examine some legal requirements in various jurisdictions, and discuss how attorneys can help improve the future for food trucks and pop-up restaurants.

Food Trucks and Pop-Ups Today

An estimated 10,000 to 15,000 food trucks now operate in America. Annual sales are over $1 billion, with estimates that 2017 will see more than double that amount. Cities such as Denver, Houston, Los Angeles, San Francisco, Seattle, and Washington, D.C., are well-known for their vibrant mobile dining scenes, an important appeal for tourists as well as residents.

Pop-up restaurants also have taken on greater significance in the last several years. Providing an opportunity for chefs to test edgy new culinary ideas and experiences for diners, pop-ups can also attract investors through a cost-effective “proof of concept” for a potential restaurant’s viability. Pop-ups can range from stand-alone chef takeovers in underused spaces to temporary mini-restaurants within a larger restaurant or food retail space. Virtually unknown before 2009, the number of pop-up dining events grew by 82 percent in five years.

The Legal and Regulatory Environment

The often-competing interests of serving the public, protecting health and safety, and stimulating commerce and innovation while not disadvantaging existing market participants have led to several legal and regulatory issues affecting the operations of food trucks and pop-ups today. The most vexing issue is the inconsistency in municipal regulations.

Chicago may be said to have some of the most restrictive food truck operating laws in the country. Designated as a mobile food vehicle (MFV), a food truck in the city faces numerous requirements. Subject to routine sanitation inspections, including fire safety compliance evaluations, Chicago MFV operators also are limited in where they may park and how long they may stay there. Restrictions include remaining at least 200 feet away from any restaurant and staying only two hours in any one spot. Because few want to risk getting a fine of up to $2,000, trucks often stick to well-known stands occupying only two or three distinct areas around the city. The Municipal Code of the City of Chicago also requires that an MFV be equipped with a GPS device that is permanently installed, active, and “accurate no less than 95 percent of the time.”

In New York City, the Department of Health and Mental Hygiene offers extensive guidance for “mobile food vendors” regarding the many applicable laws in the Big Apple. As with Chicago, permits and licenses are required. In order to receive a mobile food vendor license, one must also successfully complete a food protection course. Once operators pass the requirements for licensing, they are issued a badge, which must be conspicuously displayed on the operator’s outer clothing. The mobile vending unit also gets a decal that is affixed by the inspector conducting the inspection.

If you’ve got an ice cream truck in New York, there’s more. No decal will be issued unless the vehicle has warning beepers and signage arms required by the New York Vehicle and Traffic Law. Whether selling hot or cold food, you must have a thermometer—and not just any thermometer. Only “metal stem-type, numerically scaled, indicating thermometers, thermocouples, or thermistors, accurate to plus or minus two degrees Fahrenheit (one degree Celsius).” There are many more rules and regulations for mobile food vendors in New York, and a 68-page booklet of regulations is available in some ten languages, including Urdu, Bengali, Greek, and Hindi.

My hometown of Los Angeles has its share of food truck rules. While one might argue that you can’t regulate common sense, these rules indicate otherwise. For instance, trucks must have a conspicuous litter receptacle (aka, trash can) that is clearly marked with a sign requesting that patrons use it. Food truck owners must also obey all street signs, such as parking limits and no stopping or loading zones. There’s actually an ordinance that requires dispensing food from the sidewalk side of the street. No truck may dispense food on the street side. Imagine the L.A. traffic jam that would otherwise arise.

While Miami may be appealing, the regulatory environment is a challenge. Any food truck in Florida must be built in accordance with the state’s own requirements, including refrigeration, storage, electricity, and sink specifications. Even if the truck is an expert custom build, it will still be required to meet Florida specs. Twice a year the truck will play host to random inspections to ensure all is still in order.

Like many jurisdictions, Miami has certificates of use, zoning district, and site restriction requirements. Trucks must be on improved property or vacant unimproved property only when approved as a special event. They must remain a minimum of 20 feet from the property line of an existing residential use or ten feet from the property line if the residential use is separated by a six-foot-high masonry wall.

Miami’s rules are demanding but straightforward. Step over to Orlando and discover that in response to some unhappy restaurant owners, the City Council instituted a requirement that food trucks obtain a mobile food–vending permit, a license from the Florida Department of Business and Professional Regulation’s Division of Hotels and Restaurants, and a business tax receipt. On top of that, they must stay away from rights-of-way, “unimproved” areas, and even the downtown core. While acknowledging that “Mobile Food Vending has become a local and national phenomenon, bringing activity and vitality to commercial districts and special events alike,” the Orlando City Council has made it much more costly and difficult for food truck operators to provide such vitality to the city through its patchwork of laws.

Fortunately, activism and concerted effort have brought relief to food truck operators in some cities. In New Orleans, for instance, multiple interests got together and hammered out more manageable laws. Originally, New Orleans issued only 100 permits for all mobile vendors, which included others such as flower and vegetable carts. After the city raised the number of permits for food trucks alone to 100, the food truck scene began to flourish.

As in many municipalities, the rules in New Orleans were complicated and confusing. But in 2013 the New Orleans Food Truck Coalition won the battle for harmonizing and simplifying the laws, which has served to make things easier for everyone. Some of the changes enable mobile food vendors to park in a spot up to four hours a day, though if the spot is metered, they still need to feed the kitty. There are no restrictions on food trucks parking near restaurants. During the special time of Mardi Gras, there is a separate permitting process, and plum parade route spots are assigned by lottery. Even so, the reasonableness and clarity of laws ensure that everyone knows the rules and how to play by them.

Out in the west, the folks of Montana are known for their MYOB (Mind Your Own Business) approach to personal autonomy. The city of Missoula keeps things pretty smooth for food truck owners, too. Costs to meet the requirements for getting up and going include a mobile plan review and health safety class that cost just a few hundred dollars. Additionally, if a truck has been approved in another Montana county and meets the state requirements, it can operate in Missoula, too.

When it comes to pop-ups in Montana, they can operate for a single day or have a recurring event for up to 45 days using permits that cost, at most, around $100. With more than two dozen mobile vendors in a population of around 70,000, Missoula even hosts a “Food Truck Tuesday” to promote the appeal of getting meals from wheels. All this is good for the town’s reputation, too, as it was named one of the 25 Best Towns of 2017 by Outside magazine for many advantages, including “drool-worthy food and drink scenes.”

Indianapolis is another city that has progressive ideas about the food truck business. In general, there are no limitations on where trucks can park—any valid parking space is okay. They can’t sell food on public property between 10:00 pm and 6:00 am but can move over to private property and sell away. Unlike some jurisdictions, cooking on board is allowed in Indianapolis.

The growth of food trucks in Indy has been astounding, with some 120 food trucks in the city now and well-attended “Food Truck Fridays,” a weekly gathering of food trucks on the Georgia Street Boardwalk, where diners have their choice of many different options. Similar gatherings of food trucks have become a popular form of festival or rally in places as disparate as Atlanta, Columbus, Oklahoma City, Scottsdale, and St. Petersburg. The one thing they all have in common is public appreciation for the variety of offerings and promotion of the local food scene.

Pop-up restaurants, like virtually all purveyors of food and drink, need to comply with the health and licensing laws of their jurisdiction. Insurance is another consideration for such venues. Variations arise from the specific requirements for permits and restrictions on operations in each jurisdiction. Some pop-ups are operating as a one-time event, others as a lease or sublease on a space. It’s often easier to piggyback on a space whose last tenant was a restaurant. Another approach is to rent out an existing restaurant when it’s closed or take over part of its space while it’s still operating. Utilizing an existing restaurant location can minimize costs and unexpected requirements. In general, though, pop-ups have fewer confusing requirements and greater consistency than do food trucks because, in essence, they’re temporary restaurants.

While Matt Maroni no longer has the Gaztro-Wagon, he’s embarked on a new approach that we may be seeing more of in Chicago and elsewhere. He’s launched a “virtual restaurant” called ChurriNaan that embraces his love of the Indian naan-wiches but within the walls of a conventional restaurant, Mrs. Murphy & Sons Irish Bistro. “We’ve got 12,000 square feet of space and two kitchens,” says Maroni. “It’s another revenue stream that we can run under the same retail food license we already have. It’s really a concepted menu,” he explains.

Having moved the idea from food truck to pop-up to virtual restaurant, Maroni has seen a lot of the challenges that food entrepreneurs face. “You still have to hustle, especially in today’s food world. People vote with their dollars. You have to evolve. You have to adapt,” he says.

Although Maroni believes that food trucks are here to stay, he says that streamlining the licensing, permitting, insurance, and inspection processes would go a long way to helping food entrepreneurs succeed. He contends that attorneys who could work with administrators on creating a legal package for food trucks would help micro-businesses start faster. Developing consistent requirements would help energize the business from city to city.

“The main requirement is that there is not a main requirement. It varies from state to state, county to county, and city to city,” says Eric Weiner of FoodTrucksIn.com, which is dedicated to providing food truck listings and information. “In many places there are state requirements and city requirements, and often from city to city they vary significantly.” In Rhode Island, for example, “Providence, Warwick, and Pawtucket have been proactive to improve and advance their rules and laws while Cranston still has some of the worst food truck rules in the country,” he explains.

The Role of Lawyers

Weiner believes there are ways that interested attorneys can help. “Municipalities do not seem to have the time and resources to look at their food truck laws and spend a lot of time revising or updating them. When attorneys have been able to go in with suggestions and legislation that has worked in nearby cities and towns and in other places, often it is easier to help get those changes adopted,” he says.

Taking time to point out and educate as many local officials as possible is also useful. When communities see events that are successful in other communities, they may be more open to seeking similar benefits by making positive changes. Some of the rules are there for the safety of the public, such as health inspection and food preparation and storage laws. But some, such as zoning and parking restrictions, are primarily designed to prevent food trucks from competing with other interests such as existing restaurants. While it may be important to take all interests into consideration, a cohesive set of rules, clearly articulated and fairly enforced, would go a long way toward ensuring the growth, vibrancy, and viability of food trucks and pop-up restaurants across the country.

Attorneys can help their culinary clients as well as the food lovers in their jurisdiction by getting involved in the movement toward cohesion and harmonizing of regulations in this area. The effort will benefit not only the food truck operators and their patrons but also the regulating bodies that must try to keep up with unwieldy, conflicting, and often nonsensical laws that are irrelevant and even potentially harmful to the progress and prosperity of their community.

Diana Laskaris is a solo business transactions attorney licensed in New York and Illinois and has previously served as president and managing director of several companies. She serves clients in many industries as their outside general counsel, strategic business advisor, and transactional attorney. Serving clients in the restaurant, hospitality, food, and travel industries with their legal and business strategy needs, she also works with destinations and brands around the world to attract consumers as cofounder of the online food travel magazine http://foodtravelist.com.