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A Brexit lesson on restaurant regulation

Jessica Dunker is president and CEO of the Iowa Restaurant Association

Restaurants in Britain may well have been on the forefront of the UK’s recent decision to leave the European Union (EU). Why? Regulatory overreach had reached the point of the absurd.

There was near restaurant revolt when the EU tried to force refillable olive oil bottles off restaurant tables across Europe. Even a protest of 100 top chefs in Britain couldn’t stop the mandate that “mustard” be noted along with 14 other allergens on menus—imagine the nightmare for small chef-driven restaurants that change their menus on a regular basis.

Sadly, we may be headed perilously close to an equally well-intentioned, but onerous regulatory environment on our “side of the pond.”

Not long ago the biggest challenge most restaurateurs faced was finding innovative ways to attract new customers and keep them coming back. They would test marketing tactics, improve ambiance, innovate with food and drink and move price points in an effort to capture that “magic mix” for a successful business.

It’s not that restaurant entrepreneurs no longer ask and seek answers to those business-building questions. They do. But the biggest worry consuming the minds (and energy) for today’s operators is government interference in their business.

In fact, regulatory overreach has displaced the economy, food costs, recruiting employees and even sales volume as the number one challenge cited by restaurant operators, according to an annual survey conducted by the National Restaurant Association.

Of course, there are “big headline” battles between the restaurant industry and all areas of government. New York City led an effort to prohibit the sale of “super-sized” soft drinks in restaurants (apparently the “bigger than my head” drinks offered by convenience stores didn’t hold the same health risks.)

Across the nation, restaurants and bars deal daily with compliance officers on alcohol, food safety, wage and labor, and more. And while wage battles make headlines, the more costly regulatory fights often don’t find their way into the news.

Case in point, grease traps (a plumbing device that’s part of a restaurant wastewater disposal system.) Twenty-years ago one independent restaurateur I know opened a place downtown with a 60 gallon grease trap. He’s never had a problem with it. This past year when he purchased and renovated an existing restaurant location, he was required to put in a 10,000 gallon grease trap—you read that right—a grease trap that was 166 times larger than the one used in his existing location.

Trust me when I say, his new restaurant does not produce 166 times more grease, solid waste, or anything else. Not only is a trap this large unnecessary, it doesn’t exist. He was forced to buy two 5,000 gallon tanks. And because the regulations say a tank cannot be more than 25 percent full before it is cleaned, one tank sits filled with 5,000 gallons of clean water 100 percent of the time.

I know that is a “down in the weeds” example that only those in the restaurant industry truly care about, but it is a $100,000 example—and it was a $100,000 expense that no restaurant patron will ever see the benefits from. It’s “overkill” in every regard.

The biggest worry about all of this is that the restaurant industry is one of the last bastions of entrepreneurialism left in the United States. People can still start as a dishwasher, busser, or server and end up an owner. However, if we continue down the path of EU-style regulatory overreach—we may well regulate future independent restaurateurs away from the American Dream, and out of the marketplace.

And that would be a shame—because a huge attraction to any city is the unique regional flavors delivered by “locally grown-and-owned” independent restaurants.

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