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IFA Fighting Discriminatory Chain and Fast-Food Restaurant Ordinances and Laws

Dean Heyl is senior director, state government relations, public policy & tax counsel for the International Franchise Association.

Dean Heyl is senior director, state government relations, public policy & tax counsel for the International Franchise Association.

One of the greatest delusions in the world is the hope that the evils in this world are to be cured by legislation.”
–Thomas Bracket Reed
(1839-1902)

Although the above quote was spoken more than a century ago, it is relevant today as chain restaurants face unnecessary, unfair, and unwarranted ordinances and legislation from California to New York. While there is little doubt that some government regulations serve a purpose for promoting public safety and protecting individual liberties, the number of misguided regulatory measures that accomplish neither of these goals is staggering. In the end, it is the local economy and small businesses, along with their residents and employees, who suffer the consequences of nobly-intentioned but poorly conceptualized rules.

Originating from the Bay Area, the California Legislature is considering Senate Bill 529 that would mandate that specified “fast food facilities” only provide customers with disposable food-service packaging or single-use bags that are either “compostable” or “recyclable.”

Unintended Results

Requiring food establishments to maintain onsite composting or recycling collection systems for food packaging raises several concerns. Soiled food containers would presumably have to be stored onsite, providing an environment ripe for rodents, ants, flies and other undesirable elements, all of which threaten the sanitary conditions required at food establishments. Space availability will also undoubtedly fluctuate depending on the location of the facility. Some establishments may have back alley space for separate collection systems while others, such as those in urban areas, may not. In those cases, these food facilities would be unable to meet the requirements of this bill and would therefore be unable to provide customers with any disposable packaging.

Industry Mobilizes, Builds Support

The International Franchise Association has joined a broad-based coalition that opposes the legislation. The coalition includes:

  • American Chemistry Council
  • American Forest and Paper Association
  • Biodegradable Products Institute
  • California Chamber of Commerce
  • California Manufacturers and Technology Association
  • California Restaurant Association
  • Chemical Industry Council of California
  • Foodservice Packaging Institute
  • National Federation of Independent Business
  • Plastics Industry Trade Association

Nevada Tax and Wisconsin Restaurant Ban

Moving east, IFA has made its concerns known regarding Nevada Assembly Bill 122, which would have established a five-cent tax on food items sold by fast-food businesses. IFA stressed that the bill would harm struggling families by increasing the cost of food, as well as franchisees, who already operate on thin margins. Fortunately, AB 122 died in committee in April, after failing to meet a Nevada legislative deadline.

The City of Wauwatosa, Wis. was set to vote on a proposed ordinance that would have banned almost all “formula restaurants,” defined as 11 or more establishments in the United States, in a large part of the city. IFA stated in its letter to the city council that it opposes efforts by government to pick favorites in the marketplace. The city planner announced on April 9, that it will be months before any proposal will be ready for city council consideration.
Wauwatosa is not alone in its bias against chain restaurants. “You can go get your sandwich in Larchmont,” said Eastchester, New York Supervisor Anthony S. Colavita. “We aren’t going to cheapen the town with fast food or these formula fast-quick casual places.”

IFA responded with an email to Colavita’s unjustifiable comments, by stating in part, “The IFA prides itself in building local businesses, one opportunity at a time. However, under Eastchester’s new rule, many local businesses will be prohibited from opening in your community and creating new jobs.”

To date, no response has been received from Eastchester.

Whether it is container restrictions, fat taxes, or zoning ordinances that negatively impact chain, fast-food restaurants, or any IFA member, IFA will oppose them.

Many state legislators struggle to understand that, although franchise restaurant owners operate under a national brand, they are small businesses that need to be empowered like any other Main Street business. Regulations that unfairly target the franchisees of national chains put an unnecessary burden on small-business owners in every city and state in the country, and dampen growth during a period of slow economic recovery. If the 825,000 franchise locations are to continue creating jobs and driving the recovery, state legislators across the country need to rethink their approach to regulations that, as of late, have done nothing but discriminate against the franchises that form the small-business backbone of our economy.

Dean Heyl is senior director, state government relations, public policy & tax counsel for the International Franchise Association. He can be reached at 202-662-0792 or dheyl@franchise.org.

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