Banning Formula Businesses

According to New Rules, “formula businesses” include retail stores, restaurants, hotels and other establishments that are required by contract to adopt standardized services, methods of operation, decor, uniforms, architecture or other features virtually identical to businesses located in other communities.

Several communities have banned certain types of formula businesses. These laws do not prevent a chain store from coming in, but they do require that the incoming chain not look or operate like any other branch in the country. This has proved a significant deterrent to chains, which generally refuse to veer from their standardized, cookie-cutter approach.

Several towns have banned formula restaurants (Bainbridge Island, Carmel, Pacific Grove, Sanibel and Solvang). Others have limited the number of formula restaurants allowed within their borders (see Arcata) Most ordinance apply citywide, but they may also be written to cover only specific areas within the community (see Port Jefferson). Some communities have restricted other types of formula businesses. Calistoga, California, bars both formula restaurants and visitor accommodations, and requires formula retail stores to apply for a special use permit from the Planning Commission. Coronado, California, limits the number of formula restaurants allowed and requires formula retail stores to pass a special review and comply with certain restrictions. Formula businesses include retail stores, restaurants, hotels and other establishments that are required by contract to adopt standardized services, methods of operation, decor, uniforms, architecture or other features virtually identical to businesses located in other communities. Coronado's formula retail ordinance was upheld by a California Appeals Court decision in June 2003.

Sample Ordinances from New Rules

Arcata, CA
In June 2002, the city of Arcata, California, enacted the following ordinance, which limits the number of formula restaurants in the city to no more than nine at any one time. (The community currently has nine formula restaurants. If one closes, the ordinance allows another formula restaurant to take its place.) A formula restaurant is defined as one that shares the same design, menu, trademark, and other characteristics with twelve or more other establishments. More...

Bainbridge Island, WA
On June 8, 1989, a public hearing on the subject of formula restaurants was held. Overwhelming public comment favored elimination of formula take-out food restaurants in all zones within the city. A finding and recommendation to that effect was thereafter made to City Council. The City Council finds that formula take-out food restaurants represent a type of business that is automobile-oriented or of a particular nature that the existence of one such restaurant in the High School Road zone is a sufficient maximum number of that use for the village character to be preserved. More...

Calistoga, CA
In 1996, the town of Calistoga, California enacted an ordinance that prohibits formula restaurants and visitor accommodations, and requires that other formula businesses undergo review and apply for a special use permit from the Planning Commission. The city council concluded that regulating formula businesses was necessary to preserve the unique character of Calistoga's downtown commercial district, including "regulating the aspect of businesses. . . that is reflective of the history and people of the community."More...

Carmel-by-the-Sea, CA
This small city in the mid-1980s became the first town in the country to enact a formula restaurant ban, which prohibits fast food, drive-in and formula food establishments. In Carmel a business is considered a formula restaurant if it is "required by contractual or other arrangements to offer standardized menus, ingredients, food preparation, employee uniforms, interior decor, signage or exterior design," or "adopts a name, appearance or food presentation format which causes it to be substantially identical to another restaurant regardless of ownership or location." More...

Coronado, CA
This city of 20,000 in southern California has two zoning ordinances that limit formula businesses. A formula business is one that is required by contractual or other arrangement to maintain a standardized array of services or merchandise, and standardized architecture, uniforms, logos, decor, etc. Coronado has a formula restaurant ordinance and a formula retail ordinance. More...

Pacific Grove, CA
City Code forbids any permits for food establishments that have the following characteristics: specializes in short order or quick service food service, food is served primarily in paper, plastic or other disposable containers, customers may easily remove food or beverage products from the food service establishment for consumption, and it is a formula food service establishment required by contractual or other arrangements to operate with standardized menus, ingredients, food preparation, architecture, decor, uniforms, or similar standardized features. More...

Port Jefferson, NY
On June 26, 2000, Port Jefferson, New York enacted an ordinance barring formula fast food restaurants from the village's historic commercial and waterfront districts. The measure was proposed by the Port Jefferson Civic Association, which has fought to prevent McDonald's from locating in the village center and to protect the community's unique character and ambiance. More...

San Francisco, CA
San Francisco's formula business Ordinance adds formula businesses to the list of uses that require neighborhood notification under city law. Residents will be notified whenever a formula retail business applies to open in their neighborhood. They will then have the option of requesting a public hearing and subjecting the applicant to a list of criteria. In addition, formula retailers are banned entirely from the four-block Hayes Valley business district and are automatically required to undergo a hearing and review in the Cole Valley neighborhood.  More...

Sanibel, FL
As part of Sanibel's efforts to write a Vision Statement which reflects the public's desires to remain a small town community, remain unique through a development pattern which reflects the predominance of natural conditions and characteristics over human intrusions, and avoid "auto-urban" development influences, the city enacted an ordinance banning formula restaurants in 1996. More...

Sausalito, CA
The city has determined that preserving a balanced mix of local, regional, and national-based businesses and small and medium sized businesses will maintain and promote the long-term economic health of visitor-serving businesses and the community as a whole. Therefore, the over-concentration of formula retail businesses will not be allowed, and all permitted formula retail establishments shall create a unique visual appearance that reflect and/or complement the distinctive and unique historical character of Sausalito, and that no such establishment shall project a visual appearance that is homogenous with its establishments in other communities. More...

Solvang, CA
The Land Use Element of the City's General Plan provides that a key issue identified in the process of preparing the General Plan was to maintain the image of Solvang as a small-town village in an open space/agricultural setting. This unique character would be adversely affected by a proliferation of "formula restaurants" which are required by contractual or other arrangements to be virtually identical to restaurants in other communities as a result of standardized menus, ingredients, food preparation, decor, uniforms and the like. Therefore, the City Council finds that in order to preserve the character of the Village, it is reasonable and necessary to adopt this ordinance which would preclude the development of new formula restaurants in the Village. More...

ALICE would like to thank New Rules for blazing the trail on this issue.

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