Nasir Pasha & Matt Staub

Exactly How Restrictive Are the Laws to Operate a Food Truck? [e269]

Nasir and Matt discuss the Baltimore law that makes it very difficult to operate food trucks in the city. They also discuss all the legal restrictions to having a food truck.

Transcript:

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist.
My name is Nasir Pasha.
MATT: And I’m Matt Staub.
NASIR: And so, in preparation of tonight’s podcast, I did some research and I went down the street to a food truck and I got myself a fish taco in Houston, Texas. You know, I don’t know how many times we’ve mentioned “fish tacos” but I had to try and see. It was pretty good.
MATT: You actually did this?
NASIR: No, I actually did it.
MATT: Okay.
NASIR: I’m trying to look around to see if I have the trash somewhere so I could figure out what the name of the food truck is so I can plug them but I can’t remember what it is. I feel bad now.
MATT: Yeah, food trucks, they definitely have peaked. I think we’re on the downhill but there was definitely a time a few years ago when it just seemed like, it’s kind of like craft breweries where it just seemed like almost everyone had a craft brewery or some tie to one and that it was kind of like the same thing with food trucks. I kind of saw it that way.
NASIR: It is kind of hard to understand the real appeal to it because, I mean, you’re right, people do go crazy over it and I feel like maybe it’s just the novelty of having something new, especially when they get all those food trucks together in one parking lot, it’s almost like going to a food court in a mall because you have all these choices. But, at the same time, if you end up going again, it’s always ended up being the same food trucks every week it seems like, right?
MATT: Well, I think you hit the nail on the heads there. I think that’s the appeal if you have multiple food trucks and particularly if there’s some sort of rotation because, yeah, that’s a good comparison – it’s like a food court in a mall because you can go with a group of people and presumably there’s something there for everyone. But, yeah, there’s a couple close to where I live that are essentially just permanently – well, not permanently because they do drive away but they just set up in the same spot every day and that’s all it is.
NASIR: They might as well be just like a restaurant that’s parked somewhere.
MATT: Yeah, I think that’s one of the issues we had. We’ll talk about a specific issue in Maryland – Baltimore specifically but we talk about more broadly after that. The Baltimore city code, there’s a new law and, essentially, to summarize it, food trucks can’t be parked within 300 feet of a brick-and-mortar or an actual restaurant if it serves similar type of food which obviously leaves some room for ambiguities there but it’s an interesting law because I imagine what probably happened was these food trucks were parking outside of restaurants and I think the two that we’re going to talk about specifically is the pizza one, of course, and a barbeque.
NASIR: Barbeque, yeah.
MATT: Yeah, they just parked in front of a place that is going to have significantly more overhead and they probably just were upset about that. That’s I’m guessing what happened.
NASIR: Yeah. And so, as you can imagine, this law is a little controversial and, obviously, that’s why these two particular food trucks are suing and basically saying that it’s unconstitutional. I think they actually mean they’re suing for this under the state constitution which I think there might be some wiggle room for under the US Constitution too as well. But this seems to be a local ordinance and we can get into some of the constitutional aspects of this. But, first, let’s just talk about overall fairness. Like you said, I understand the want to protect some of these retail brick-and-mortar restaurants but doesn’t it seem kind of contrary to our culture of free competition to restrict and to have such a specific law against food trucks? It seems a little strange, right?
MATT: Yeah. I mean, what the trucks that filed this compliant with… I assume it’s against the state or at least the city.
NASIR: I think the city, right?
MATT: Yeah, against the city. You know, they make a couple of constitutional arguments and it’s essentially an issue of fairness but you’re exactly right. I mean, that’s the thing. This rule’s in place but, if it was going back to last week’s episode, if it was a pizza place that was actually a physical restaurant or a brick-and-mortar that moved in, then it wouldn’t be an issue at all. It’s just these mobile ones that fall under the rule and I guess maybe it has to do with getting a lot of things like whether it was a zoned area for it or whether – we’ve talked about it a million times – the restriction on if there can be two of the same sort of restaurant in the building – things like that. But, I mean, you’re right. In terms of fairness, it’s really not fair for the food trucks. I mean, the non-fairness argument for the restaurants is, like I said before, really, it’s significantly more overhead. In a truck, you have maybe three people – I guess four if you have someone on foot outside. Obviously, your main expense is just gas and that’s really it.
NASIR: And the truck, I suppose.
MATT: Well, yeah, I’m just thinking gas for the truck and that’s really it. I think I fall on the side of the food trucks on this one as much as I don’t like the inconvenience of going to one and having to hold food with no sort of table and it gets inconvenient.
NASIR: Sure, and I really do feel bad for some of these. I mean, I can imagine, if I owned a pizza joint and then a pizza food truck parks right next to my parking lot, that would be very frustrating. But, at the same time, hopefully, my pizza would be better – which, of course, it is. I mean, we still have to open up our Sauce V Crust pizza place. We’ll do that, you know, when we retire.
MATT: We’re working on it.
NASIR: But I tried to do some research because I couldn’t find another law like this. I don’t think I’ve ever seen anything like this where you have, I mean, the best comparison that I can compare to is where you have ordinances that require, for example, strip clubs to not be built within a certain number of yards of schools or the same with liquor stores and things like that.
MATT: Yeah.
NASIR: Of course, in those cases, the government, you know, even if it’s challenged as equal protection or due process like these guys are doing, they can argue that there’s a legitimate government interest to protect children or public safety or whatever and that’s usually given pretty wide deference to those types of protections. But, here, we’re talking about economic protectionism. I mean, this is picking one particular type of business that you’re going to protect and it does seem a little strange whereas food trucks around the country are already regulated on its own, adding specific restrictions to types of food trucks seems a little overboard.
MATT: Yeah. I mean, think of it this way, for a food truck, to be able for it to find a location that’s (1) zoned properly for it, (2) gets enough foot traffic for it to actually make enough money, and then (3) just deal with all the other issues that it might be in the area – whether it’s lighting or I don’t know, what-have-you – for it to be able to get through all those and not have to deal with this “can’t be within a football field of all these restaurants,” I see this law as trying to put food trucks out of business because they’re going to be so isolated from everything else that it’s just going to be too difficult to operate unless – I’m trying to think – like, if they’re in a corner of a parking lot of a big store maybe that’s not close to anything but what if they’re on the corner of a Super Target and Super Target also has a little store in there that sells pizza and then they have this pizza truck? I mean, I guess that falls under the rule.
NASIR: I think that’s one of the ways that I think they attack the law – the ambiguity and vagueness of it – and they describe the situation where some cops basically come into the food truck and say, “Hey, you’re in violation of the 300-feet rule.” And then, the food truck owner is like, “Okay, well, what restaurant are you talking about?” and, after some conversation, the police were like, “Okay, you can go ahead and operate.” The point is that these restaurant owners may have called saying, “Hey, these guys are in violation,” but then, after looking into it, they weren’t. it was demonstrating kind of the vagueness of the enforcement of this type of law.
MATT: Yeah, and it’s interesting. You know, you just mentioned you couldn’t find something similar. I mean, I didn’t do too extensive of a search but I didn’t see anything when I looked up if there’s a similar law in any other city. I mean, I figured, it looks like California is kind of a city by city – I guess this one is, too.
NASIR: Yeah.
MATT: But the laws in California for food trucks is based on the city. I pulled up a couple of different ones that I found.
NASIR: Yeah, there’s no state permit. I mean, I know a lot of cities that have even a specific permitting process for food trucks but let me ask you a question. If the distance was less, instead of 300 feet, would it make a difference to you? What if it was 100 years instead of 300 feet?
MATT: Yeah. So, a third… Got you.
NASIR: 100 years versus 300 feet.
Anyway, but what if it was just 100 feet instead of 300 feet? Do you think that would make a difference?
MATT: I mean, it seems like 100 yards – or 300 feet, either one – seems like just a random number that they picked. I mean, I guess, no, it would depend on the situation but it doesn’t really make… I guess, you know, we’re talking 100 feet instead of 300 feet…
NASIR: It just seems to me that 300 feet seems like a lot, right? That means they could be parked down the street and still be violating that ordinance whereas I kind of get that it would be so frustrating and annoying to have that food truck looking out my window, staring at the food truck on the street. It just would infuriate any owner but, down the street, it’s like, well, that could easily happen anyway. I’ve never seen any ordinance that says, “Okay, you can’t have two pizza shops next to each other.” That seems silly, right?
MATT: Well, yeah, that’s what I brought up earlier. If this was just an actual physical restaurant, then there wouldn’t be an issue in terms of the law. That’s why I think it’s a little bit nonsensical. But, yeah, I mean, I mentioned this before but the way to kind of think about it is it has to be like a football field away from a similar restaurant which anyone that’s gone to a football game, I mean, it’s a pretty good distance away. You could see it, obviously, but it’s something you can’t even throw a football the full length of the field.
NASIR: That’s right.
One of the things though – let’s talk about food trucks a little bit – I don’t know if you’ve noticed this with either our clients or people that call in but there seems to be this idea that, when you start a food truck business, yeah, it’s maybe small startup cost but some of the regulatory hurdles of running a food truck is not as strict because somehow it’s a little more casual but you can’t be farther from the truth in some ways, right? I mean, all those food preparation laws in your local town and food safety and workers’ safety. In fact, if anything, it can get a little complicated because, now, you have your employees actually driving a vehicle and you’re parking in areas that you may need to get a permit for and it may change from week to week. One day, you may be in one city; on another day, you may be in another city, depending upon the area that you work in. It can get kind of complicated, right?
MATT: Yeah, like, all the same, I mean, I think it’s more complicated, if anything. You’ve talked about the driving issue with one of the employees. I mean, that’s a whole other issue that makes it even more complex. But, yeah, all the same sort of health codes. A restaurant has to get by the initial zoning – you know, they have to make sure the restaurant is zoned for that use.
NASIR: Commercial purposes, yeah.
MATT: As opposed to a food truck that every single spot it parks, it has to be zoned for use. I mean, I’m looking at the one in San Diego, for example, and it’s very specific on where they can and can’t park. That’s a huge issue. Like I said, the health code, all that stuff is still there. I mean, you’re going to have all the same sort of rules that you would with an actual brick-and-mortar restaurant but even more so. It’s just more to worry about. Like I said, this is even with factoring in the mobile aspect of it from a driving standpoint. I mean, I don’t know if one of the employees, probably the owners would be the only ones driving it but I guess you never know.
NASIR: Yeah, it depends. I mean, there are food truck businesses that have multiple food trucks. I’ve seen in before.
MATT: Yeah, that’s true.
NASIR: Logan actually showed me a picture of a Taco Bell food truck today so I thought that was interesting. I mean, there’s business franchises that actually do this stuff, too.
MATT: Yeah, I was going to mention that. I’ve seen – at least in San Diego – there’s been a few restaurants I’ve noticed where they’ve just created their own food truck.
NASIR: Oh, yeah, they have their own restaurant but then also have a food truck, right?
MATT: Obviously, it’s not a full menu on the food truck but I’m sure they probably pick popular items and then it can go anywhere. Those are probably going to survive. But the independent ones, it’s just got to be tough. I don’t know what the margins are. You probably never watch this show…
NASIR: Food Truck Wars?
MATT: Great American Food Truck Race or something.
NASIR: I think maybe some of my family members may have watched that. I know they have at least I think there’s one called Food Truck Wars, right?
MATT: Yeah, probably.
NASIR: Every time I hear the word “food truck” – or at least when I first did – I always thought about, remember that movie Caddy Shack 2 where basically Bill Murray’s replacement?
MATT: I didn’t see the second one. I’m not going to be able to…
NASIR: Oh, you didn’t see the second one?
MATT: No.
NASIR: Anyway, it’s usually food trucks, especially at that time, a while ago, it’s associated with very cheap, bad street food. Of course, that’s been a revamp of that. That’s kind of the neat thing about it, I guess.
MATT: Yeah, I think that’s what impressed people when people went so crazy about it a few years ago. They assumed it was going to be cheaper food. A lot of them pump out some pretty high-quality stuff but you’ve got to think about it, you know, because of a couple of things – (1) sure, they’re just burning through power and gas like crazy, and then, (2) one of the reasons restaurants make money is selling alcohol and I don’t think – at least in San Diego and I imagine probably in a lot of other spots – you can’t sell alcohol in a food truck. You can’t just drink on the street.
NASIR: Yeah, and it’s definitely prohibited in San Diego and I’m sure you’re right – most other towns as well. By the way, the food truck that I went to tonight is called Whatcha Cravin – watchacravin.com.
MATT: You sent me a little link here and it looks like it’s quite a wide variety. You don’t usually see this many options at a food truck.
NASIR: No, you’re right, but I do like the concept because it’s literally comfort food. It’ll be macaroni and cheese, French fries, what is this? A grilled cheese sandwich of some sort?
MATT: This looks like a grilled cheese but it’s macaroni and cheese instead of just regular cheese? This reminds me, what happened to that one restaurant, by the way, that you were close to?
NASIR: Actually, I saw a sign. It was a pretty big sign that you can read from the street. It said the name of the restaurant – which, of course, I can’t remember – and it says, “Coming Soon! Spring 2016” as if they signed a new deal with the landlord. I think they may have worked something out – probably because of our podcast! I’m pretty sure.
MATT: Most likely, yeah, has to be.
NASIR: I mean, we didn’t even get paid to negotiate their lease but, you know, they really should pay us. I’m pretty sure we got them a better deal.
MATT: Well, they’re listening.
NASIR: The public outrage.
MATT: They can just pay you in food, I guess. I don’t remember what they had. You got a sandwich there?
NASIR: It’s called Relish.
MATT: Relish, yeah.
NASIR: It’s called Relish. There’s some good food there. I have some kind of pickiness about it because it just seems like we talked about this selection and such that doesn’t appeal to everyone.
As we propped them up with the lease, we should just bash their restaurant afterwards but I guess that’s not appropriate either.
MATT: Yeah, that’s fine.
NASIR: So, okay, Whatcha Cravin is where I went to. We’ll do a little plug for them. But, food trucks, anything to take away?
MATT: Well, I mean, just in general for it, it’s basically, I think, you kind of danced around it a little bit. For any business that’s starting out, the expectations are probably going to be under, I mean, what’s actually going to be required from a legal perspective of just in regulatory stuff is going to probably exceed what the expectations are for a business, especially when that serves food, obviously.
NASIR: Yeah, and highly specific locally. I mean, compare doing food trucks or food stands in New York City versus San Diego, it’s going to be completely different. Or if you live in San Diego, imagine you drive up to Carlsbad which is what? 30 minutes away from San Diego proper, right?
MATT: Yeah.
NASIR: It could be a completely different permitting process.
MATT: Yeah, I think, in New York City, obviously, there’s a lot of street vendors. And then, for some reason, Portland, I know has a lot…
NASIR: Okay, Portland.
MATT: There’s like a whole area where it’s just vendors like that. I’m sure there’s other ones I’m forgetting, too. But, yeah, it’s very, very geographically specific. Something to look into, I guess, for all the listeners that want to start a food truck.
NASIR: Sounds like Baltimore is not the place to start though, that’s for sure.
MATT: No, probably not, yeah.
NASIR: All right. Well, thanks for joining us! That’s our episode!
MATT: Yeah, keep it sound and keep it smart!

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