chevron-down Created with Sketch Beta.
June 23, 2021 Feature

Pop-Ups and the Pandemic: Is That Delicious “Pop-Up” Restaurant Legal?

By Diana R. H. Winters

Chances are that you have ordered takeout since the beginning of the COVID-19 shutdowns. With restaurant dining severely curtailed, people tired of preparation and cleaning, too busy to cook, or eager for new experiences in a housebound time have been ordering food for pickup or delivery in huge numbers. Established restaurants have pivoted their food to be amenable for home consumption,1 and “pop-ups”—food businesses created, often informally, for pickup and delivery by chefs laid off or furloughed as restaurants were forced to curtail in-restaurant dining—have proliferated.

The pop-up has become a media darling. Several pop-ups were highlighted in the L.A. Times’ 2020 101 Restaurants, Dishes, People, and Ideas That Define How We Eat issue, where the editors wrote, “[w]e complement the list of 101 by featuring some incredible pop-ups—mostly finding their audience through social media—in which we glimpse the next generation of L.A. dining talent.”2 An article in the New York Times discussed the phenomenon, explaining that “[d]uring the pandemic, entrepreneurial chefs have reshaped food culture across the country with tiny, homegrown pop-ups that thrive on social media.”3

Why have pop-ups captured the food media’s imagination? They tell a compelling story: Talented but struggling chefs use social media and informal networks to create and distribute innovative food. It is success built out of hardship, scrappy energy beating the odds. And for the consumer, especially the “foodie” consumer, it’s a little bit of excitement and fun in an otherwise stressful yet monotonous pandemic existence. If you know how to work the social media system, you can get a limited-edition meal straight from the chef’s hands. So cool!

However, is the sale of this beautiful and delicious food legal? In this realm, innovation and entrepreneurship have outpaced regulation, as is so often the case.

Restaurants are regulated to protect the consuming public, the individual restaurant, and the restaurant industry. Regulation, in the form of licensing, inspections, or other mechanisms, allows consumers to trust that a restaurant provides what it purports to provide. This protects the consuming public’s health and its pocketbook. Think, for instance, of a study done a few years ago that showed that seafood is often mislabeled at stores and at restaurants: “21% of the fish researchers sampled was not what it was called on the label or menu.” This mislabeling can affect both health—for example, substituted fish may have higher mercury levels than the named fish—and cost—substituted fish was often less expensive and considered to be of lower quality.4 Regulation also protects the individual restaurant and the restaurant industry by maintaining a competitive market and preventing establishments from using fraud to charge lower prices and draw customers from competitors.5

The pop-up appears informal and impromptu, often operating out of home kitchens and using social media as publicity. However, as long as these businesses are selling food to consumers, the consumer protection issues of health and competition are present. And for these reasons, regulation, albeit scaled and flexible, is necessary. Here, I will outline the regulation of home cooking in California, including its history and current state, and sketch a path for its future.

Regulation of the Sale of Homecooked Food in California

Cottage Foods

California has several laws allowing food made in home kitchens to be sold directly to individuals. The California Homemade Food Act, passed in 2012, exempts “cottage food operations” from some state food safety requirements.6 To fall under the purview of this law, the seller must be preparing a “cottage food,” which is a “non-potentially hazardous food” listed on the state’s approved foods list.7 These foods include baked goods without cream fillings, bread, dried pasta, and more,8 and a prospective cottage food operator can self-certify, or choose to apply for certification if they plan to sell food more indirectly.9

Cottage food certification is a great option if one plans to make and sell foods that fit within the narrow category of low-risk approved foods, but the law excludes the sale of most foods that usually comprise an actual meal and is thus inapplicable to most pop-ups. In 2014, a tech start-up called Josephine began to offer a web-based platform to home cooks to facilitate the sale of full meals—think Uber for homecooked meals. One of the founders of Josephine, Matt Jorgensen, explained that Josephine tried to work “‘in the gray area’ of existing laws” by changing the structure of its business and consulting with local and state health departments, but the company’s founders and some of its cooks had continued clashes with law enforcement.10 One of its cooks received a cease and desist letter from the local health department, as did Josephine itself, advising the company that it was “aiding and abetting illegal food sales.”11

The founders of Josephine turned their attention to legislation, forming the C.O.O.K. (Creating Opportunities, Opening Kitchens) Alliance to encourage the California legislature to pass a law allowing home cooks to sell their food.12 C.O.O.K. Alliance was not the only organization working for home cook sales legislation. Other organizations, such as the Sustainable Economies Law Center, expressed wariness about the nature of start-ups like Josephine, and made policy proposals that required “that ownership and governance of the web platforms designed to facilitate sales of homemade food lie within a community of stakeholders, not absentee investors.”13

MEHKO Permits

And in early 2019, these organizations succeeded in getting a bill passed. California passed a law, AB 626, allowing cooks making food in their home kitchens to sell that food directly to the public by acquiring a Microenterprise Home Kitchen Operation (MEHKO) permit. Pursuant to AB 626, home cooks who get a MEHKO permit can make almost any kind of food, and although their kitchens will be subject to scheduled inspections, they will not have to comply with some of the requirements that commercial kitchens must follow.14 This reduces some of the barriers to entry to the restaurant business and provides flexibility for home cooks. The law also provides, among other things, that a MEHKO have no more than one full-time employee; sell no more than thirty individual meals a day or sixty meals a week; prepare, cook, and serve its food on the same day; and have no more than $50,000 in verifiable gross annual sales. In addition, the law provides that food production does not include items that would involve a Hazard Analysis Critical Control Point (HAACP) plan.15

So, was this a long answer to a short question? Does California’s MEHKO bill mean that the gorgeous food sold by the proliferation of pop-ups is legal? Well, it depends. The California MEHKO permitting system, “the first of its kind in the United States,”16 and a “potential game-changer for talented home cooks,”17 is only available in counties that opt into the law. The law reads, “the governing body of a city or county, or city and county, shall have full discretion to authorize, by ordinance or resolution, the permitting of microenterprise home kitchen operations in accordance with this chapter.”18 This is different than the state’s cottage food operations law, which provides that “[a] city, county, or city and county shall not prohibit a cottage food operation.”19

As of early March 2021, four counties have opted into AB 626 and are issuing permits, and five cities and counties have opted in but have not yet started issuing permits. Fifty-five counties, including Los Angeles County, have not yet opted into the law, meaning that MEHKO permits are not available to home cooks in these jurisdictions.20

This is not an entirely unusual outcome for a law regulating home cooks. In an article in Forrager, David Crabill explains that it is much easier to get a bill passed if it allows counties and cities to make their own decisions about whether to opt into the law.21 He points to Illinois and Texas, which both used similar mechanisms when passing similar laws.22 Local governments have traditionally regulated retail food operations, including restaurants and commercial kitchens,23 and because AB 626 is regulating establishments closer to businesses like these than to most cottage food enterprises, it makes sense that deference would be afforded to local government. Therefore, notwithstanding the passage of AB 626, most home cooks in California are still unable to legally sell food to the public, and advocacy for the sale of homecooked food has continued.

Advocates, including individuals who want to sell homecooked food and businesses hoping to monetize the facilitation of such sales, have been working to encourage counties and cities to opt into AB 626 since its passage.24 Since the onset of the COVID-19 pandemic, however, the sale of food cooked in home kitchens has become more prominent, bringing the issue into sharper relief. The pivot for restaurants from in-person dining to takeout and delivery services only resulted in massive layoffs of restaurant workers,25 and one possible route to economic survival as well as potential career growth for these workers has been the sale of homecooked food, hence the proliferation of and attention directed at pop-ups.

But, as we’ve seen, unless California-based pop-up restaurants are located in one of the few counties or cities that have approved AB 626, or sell food entirely within the list of foods approved as “cottage foods” and have a cottage foods operation permit, they are actually operating illegally.

Regulation Going Forward

And if they are operating illegally, does it matter? To answer this, we turn back to the reasons that we regulate restaurants in the first place: safety and competition. To begin with, there are food safety concerns inherent in the proliferation of unlicensed homecooked meal purveyors. Even if, as Jorgensen, the founder of Josephine, said, “we all eat out of our home kitchens all the time, and there is no health crisis,” the possibility exists that an improperly trained food handler or improperly sanitized kitchen can spread foodborne illness.26 Complying with the requirements of AB 626 lowers the chance of this possibility occurring by putting a layer of safety rules in place before allowing a microenterprise kitchen to be registered.27 The permitting of microenterprise home kitchens also provides a record of businesses feeding people, which is useful for tracing in the event of the discovery of a foodborne illness, and for enforcement if the operation is not satisfying basic health requirements.

The permitting scheme outlined in AB 626 also provides a mechanism for market signaling. In counties and cities that opt in, businesses that have chosen to apply for a permit can indicate to the public that they are following best practices and are subject to a layer of institutionalized safety checks. For example, businesses that are certified as cottage food operations, which requires them to follow certain requirements in their kitchens and with their foods, often indicate this fact on their advertising.28

For these reasons—safety and market signaling, and for pop-up businesses to have the choice whether to establish themselves as part of the restaurant economy of their community—California counties should opt into AB 626. If the barriers to entry for these counties, such as money for additional inspectors, are too high, there are median measures the county can take to facilitate support of pop-up businesses and protect the consuming public. For example, a county that does not opt into AB 626 can offer guidance to pop-up restaurants that they should comply with the requirements of AB 626 anyway, and that the business indicate this to the public. In this scenario, the county can withdraw from enforcement against such establishments for selling food illegally. And in any event, even if a county did not provide such guidance, a business operating in a county that has not opted in may choose to comply with AB 626’s safety protocols and signal this to consumers to distinguish themselves from competition.

With the contraction in the restaurant business, the ubiquity of social media, and the excitement over the genre, it is clear that pop-up restaurants are here to stay. And although they may seem to operate outside of the structure of mainstream regulation, the reasons for regulation persist. AB 626 provides a mechanism for a light regulation of these businesses—providing a level of safety to the consuming public while lowering the barriers to entry to the restaurant business. Counties in California should opt into this law, or at the very least, provide compliance guidance to businesses in their jurisdiction while withdrawing from the enforcement space.

Endnotes

1. See, e.g., Ashok Selvam, Alinea Marks Its 15th Birthday with a Six-Course Carryout Meal, Eater Chi. (May 1, 2020), https://chicago.eater.com/2020/5/1/21243000/alinea-15th-birthday-six-course-meal-intel.

2. 101 Restaurants, Dishes, People and Ideas That Define How We Eat 2020, L.A. Times (Dec. 7, 2020).

3. Tejal Rao, Cooks Turned Instagram into the World’s Greatest Takeout Menu, N.Y. Times (Jan. 26, 2021), https://www.nytimes.com/2021/01/26/dining/instagram-chefs-takeout-menus.html.

4. See, e.g., Jen Christensen, Fish Fraud: What’s on the Menu Often Isn’t What’s on Your Plate, CNN (Mar. 7, 2019), https://www.cnn.com/2019/03/07/health/fish-mislabeling-investigation-oceana.

5. Alan Schwartz & Louis L. Wilde, Intervening in Markets on the Basis of Imperfect Information: A Legal and Economic Analysis, 127 U. Pa. L. Rev. 630, 631 (1978–1979) (regulation may be necessary if “the existence of imperfect information has produced noncompetitive prices and terms”).

6. AB 1616, Food Safety: Cottage Food Operations, ch. 415 (Cal. Sept. 21, 2012), available at https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201120120AB1616.

7. The majority of states have now passed some form of cottage foods law. Best practices guidance on cottage foods laws produced by the Association of Food and Drug Officials (AFDO), “a long-standing organization that has provided extensive input to the FDA on food safety issues”—Michael T. Roberts, Food Law in the United States § 6.06[3][b] (Cambridge Univ. Press 2016)—defines cottage foods as “non-potentially hazardous baked goods, jams, jellies, and other non-potentially hazardous foods produced at a cottage food operation.” Ass’n of Food & Drug Officials, Regulatory Guidance for Best Practices: Cottage Foods (Apr. 2012), available at https://www.afdo.org/wp-content/uploads/2020/11/Cottage_Foods_Regulatory_Guidance_for_Best_Practices_acc_updated_2012.pdf.

8. Cal. Dep’t of Pub. Health, Approved Cottage Foods (rev. July 1, 2020), available at https://www.cdph.ca.gov/Programs/CEH/DFDCS/CDPH%20Document%20Library/FDB/FoodSafetyProgram/CottageFood/Approved%20Cottage%20Food%20List%20%20for%20Web%20July%201%202020.pdf.

9. Cottage Food Operation—AB 1616, Cnty. of L.A. Pub. Health, http://publichealth.lacounty.gov/eh/food/CottageFoodOperation.htm.

10. Renée Alexander, California Home Cooks Have No Idea They’re Breaking the Law Every Day, The Counter (Sept. 12, 2018), https://thecounter.org/california-homemade-food-operations-act-2018.

11. Id.

12. Matt Jorgensen, Why Shutting Down Josephine Isn’t the End of the Home Cooking Movement, Medium (Feb. 9, 2018), https://medium.com/the-dish/continuing-the-home-cooking-movement-8d28bb1cd496.

13. Alexander, supra note 10.

14. Sustainable Econ. Law Ctr., Creating Community Owned Food Systems Through Homemade Food Policy (June 2018), available at https://perma.cc/9GZZ-K8QW.

15. AB 626, California Retail Food Code: Microenterprise Home Kitchen Operations, sec. 5 (Cal. Sept. 18, 2018), available at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB626. A HAACP plan is a food safety system required for certain food production.

16. Home Restaurants (MEHKOs): Frequently Asked Questions, COOK Alliance, https://www.cookalliance.org/frequently-asked-questions (last updated Dec. 3, 2019).

17. Elina Shatkin, Why the Cottage Food Law Is a Game Changer for Talented Home Cooks, LAist (Sept. 20, 2018), https://laist.com/2018/09/20/why_the_cottage_food_law_is_a_game_changer_for_talented_home_cooks.php.

18. AB 626, ch. 11.6, § 114367(b).

19. AB 1616, ch. 6.1, § 51035(a).

20. COOK Alliance—AB 626 Implementation Status Tracker & Dashboard, https://docs.google.com/spreadsheets/d/1IG4pLa2Wn4TKG75pev7ktvkjJsqQAJk0I0izNCFSiQI/edit#gid=1892702943 (last updated Feb. 17, 2021).

21. David Crabill, California’s New Homemade Food Law Comes with a Nasty Surprise, Forrager, https://forrager.com/californias-new-homemade-food-law-comes-with-a-nasty-surprise/ (Crabill writes, about why the microenterprise kitchen bill doesn’t prohibit counties or cities from disallowing these operations, “it is much, much harder to get all parties to agree on passing a bill that automatically applies to everyone in the state”).

22. Id.

23. Michael T. Roberts, Food Law in the United States § 3.07 (Cambridge Univ. Press 2016) (“[T]he regulation of the retail segment of the food system, has been left to the states. In practice, state governments do not regulate and enforce laws on retail food safety alone—they often do so in concert with local governments.”).

24. See, e.g., DishDivvy, Cooks and Hungry Neighbors Call on LA Board of Supervisors to Opt-In to AB 626, PR Newswire (Jan. 6, 2020), https://www.prnewswire.com/news-releases/cooks-and-hungry-neighbors-call-on-la-board-of-supervisors-to-opt-in-to-ab-626-300981402.html.

25. See, e.g., Farley Elliott, With Restaurant Industry Gutted, Los Angeles Sheds Another 1.3 Million Jobs, Eater L.A. (Apr. 17, 2020), https://la.eater.com/2020/4/17/21225608/los-angeles-county-unemployed-half-restaurant-workers-coronavirus (“A large number of recent layoffs have come from the hospitality and restaurant sector, which has been particularly hard hit. More than 800,000 workers across Los Angeles and Orange counties work in hospitality, representing nearly 15 percent of the total workforce”); Abha Bhattarai & Laura Reiley, ‘Shocked, Disheartened, Devastated’: Restaurant and Hotel Workers Reel as Layoffs Soar Again, Wash. Post (Jan. 13, 2021), https://www.washingtonpost.com/business/2021/01/13/restaurant-hospitality-unemployment/ (“This workforce is under renewed pressure amid a resurgence in coronavirus cases: 498,000 leisure and hospitality jobs disappeared last month, the Labor Department reported Friday”).

26. For example, in 2016, 19 people were sickened and three died from a foodborne illness they acquired at a church dinner with homecooked food. Alexander, supra note 10.

27. The law requires home kitchens to submit information about cooking processes and sanitation to the permitting entity and be inspected initially, and allows for further inspections by such entity with notice or upon a health complaint. AB 626, §§ 114367.2, 114367.3.

28. See, e.g., View the Menu, While You’re Up, https://whileyoureup.minimartapp.com/ (“I am a licensed cottage food operation within LA.”).

Entity:
Topic:
The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.

By Diana R. H. Winters

Diana R. H. Winters is the deputy director at the Resnick Center for Food Law & Policy at UCLA School of Law. Her research interest lies in food law, and she writes about the interaction between federal and local law and the judicial review of regulation. Prior to moving to UCLA Law, Diana was an associate professor at Indiana University McKinney School of Law, a Health Law Scholar Visiting Assistant Professor at Boston University School of Law, and an Assistant Solicitor General at the New York Attorney General’s Office. Diana holds a BA from Brown University, an MA and PhD from Harvard University, and a JD from New York University.