Food trucks steer around legal speedbumps

On an unusually warm fall afternoon, Mike Maloney leans over the counter, offers an easy smile and asks curious customers standing outside of his shiny, red food truck if they have any questions about his menu.

One man studies the global street fare options, written on a chalkboard that's hung on the side of the truck. He steps up and asks Maloney for the Peruvian butifarra, an aji roast pork sandwich with red onion salsa criolla and aji Amarillo pepper mayo.

Maloney, co-owner of Homage Street Food, moves methodically through his mini-commercial kitchen. He pulls the sandwich out of the warmer and grabs a paper bag and napkins from the plastic storage container that sits on an otherwise empty stainless-steel table. He delivers the order through the window, rings up the total on a cash register and marks the sale on a yellow legal pad.

Maloney, who today wears a blue T-shirt, jeans and black Chuck Taylors, brought the butifarra back to the menu to appease warm-weather fans.

"There is a huge Asian influence in Peruvian cooking, so this is like a Latin version of a banh mi sandwich," he said. "So it's a nice summer sandwich."

Maloney and his wife, Elaine Toner, who worked in restaurants for several years, originally planned to open their own 20-seat restaurant. They spent time in Western Europe and Peru and wanted to introduce the unique dishes they discovered along the way.

By early 2010, Maloney said they realized that running a food truck was a more affordable option. For nearly $15,000, they bought and retrofitted a Wisconsin utility truck and purchased the supplies they'd need for the first few months of business.

Husband and wife team Mike Maloney and Elaine Toner launched Homage Street Food in August. Their food truck, which features quick, international fare like Peruvian butifarra and South African bunny chow, joins dozens of others that patrol Chicago and its suburbs.

Photos by Marina Makropoulos.

When Maloney and Toner launched Homage Street Food in August, they joined a band of food trucks that regularly patrol city streets. The owners of these trucks said the ability to start up businesses with little capital gives them a chance to make a name for themselves in Chicago's restaurant scene. They can also navigate a new, creative business model, where they communicate with customers on Twitter or Facebook.

As the food truck movement began to build, opposition surfaced from owners of restaurants and other businesses. They said food trucks fail to meet health and safety standards and bring unfair competition to restaurants since they reap customers without paying rent or property taxes.

Maloney understands these concerns, but said a compromise could keep both restaurants and food trucks happy.

"I've worked in restaurants," Maloney said. "My goal is to have a restaurant. A good portion of the truck owners want to have a restaurant.

"It comes down to the choice of the consumer. If a consumer wants to go to a sit-down restaurant, that's their choice. If they want to stop at a truck and pick up a sandwich, they should be given that choice too."

Elizabeth Milnikel, director of the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School, stands on the side of the food trucks.

Several years ago, Milnikel and her law students represented a homeless man who sold flowers on the street — an illegal venture in the city. They tried to help him get licensed as a peddler, but saw little success since he had several upaid tickets, she said.

They soon began working with the Asociación de Vendedores Ambulantes, a Little Village organization that lobbies for street vendors who sell fare like tamales and elotes. They also heard that police often shut down, ticketed or arrested their vendors.

As Milnikel and her students researched further, they realized that street vendors face restrictions all over the country, she said. For example, several cities establish no-vending zones or prevent vendors from stopping unless flagged by a customer.

"Some cities are more restrictive than others," she said. "Chicago seems to throw every restriction ever invented at these people who are trying to make an honest living."

According to current Chicago ordinances, "mobile food dispensers," or people who serve food from wheeled vehicles on a public way, must abstain from preparing food on the go. Instead, they must make food in a kitchen and wrap it before putting it in their trucks.

"That's limiting to how fresh they can make their food and serve their customers on demand," Milnikel said. "That's a major issue, and that's unusual to Chicago."

Current ordinances also prohibit mobile food dispensers from serving food before 10 a.m. and from parking within 200 feet of any restaurant.

Milnikel said she heard several stories in recent months about police stopping traffic to measure the distance between food trucks and restaurants or convenience stores.

"The more we hear about how this law is being enforced and how it's limiting people's opportunities to start driving businesses with small amounts of capital, the harder we're going to try to push the city to open the laws up for more people to have these kinds of opportunities," she said.

Aaron Berlin, a soon-to-be sworn in lawyer at Kirkland & Ellis, worked with the IJ clinic while in law school at the University of Chicago.

From his perspective, people involved in the push to allow more mobile vendors agree that they should be able to prepare food on trucks. He said it not only allows for interesting experimentation, but also helps someone with talent but little money start a business.

"

Kyla Page spent time with her husband, Colin Page, as she peeled away the foil to her taco she bought at the Taquero Fusion food truck parked at Fulton Street Market in the West Loop in August.

Photos by Marina Makropoulos.

All they need is a truck and a lot of free time, and they're in business," Berlin said. "That's a terrific thing. It leads to a more vibrant street culture, and it leads to a more culinary culture. Part of our mission was to make sure that foodies in their excitement don't forget that."

Michael Farah owned and operated Berry Chill until he closed the 3-year-old frozen yogurt chain in 2010. Since he worked on his recipe for nearly five years, he decided to find a new way to offer the product to customers.

He studied the business model of putting frozen yogurt on a truck, finding that while it wouldn't earn as much money, it would cost less to operate than a brick-and-mortar store.

"Chicago is such a big city, but it's also so spread out," he said. "It's tough to find locations that are busy morning, noon and night. There are only several, what we consider 'A' locations in Chicago, but there are so many other neighborhoods that need the product but don't justify spending $250,000 on a store."

Since August, when Farah launched Culture, The Yogurt Society, he found that running a food truck offers more of a challenge than running a store.

"It has the exact same operational needs, and you still have to staff it and do inventory, but on top of that, you need to know where your store is on a minute-by-minute basis," Farah said. "You need to identify a location, like the corner of State and Wacker, but what if you get there and there's no parking? You have to find a new spot and notify customers."

Farah met with the city to make sure he built a truck that would meet their requirements, but he soon realized that it would be no small task.

"They're so difficult in Chicago," Farah said. "There aren't really laws. Everything is so open to interpretation and it's just really difficult to get direct answers."

Chicago Ald. Scott Waguespack announced a new ordinance in June that would create "mobile food facilities," a new licensed category for people who want to prepare food in their vehicles. The City Council's Committee on License and Consumer Protection and the Committee on Economic, Capital and Technology Development still need to consider the proposed ordinance before it goes to the full council.

This map shows the impact of a proposed Chicago mobile food preparation law being considered by the City Council.The dark orange spots represent areas within 100 feet of an existing restaurant, while the lighter orange spots represent areas within 200 feet of businesses that offer a "similar service."

Graphic courtesy of Elizabeth Milnikel.

The IJ clinic recently started a My Streets! My Eats! campaign to draw attention to the proposed ordinance. Among other efforts, Milnikel and the law students sent a letter to aldermen with ideas on how it could be improved. They also hosted a strategy meeting for vendors, law students and advocates.

"This is in IJ clinic's history, the first major grassroots campaign we started to work on a legal issue," Milnikel said. "Really the whole My Streets! My Eats! campaign is an effort to spread the word and get lots of Chicagoans involved in contacting aldermen and pressuring them to pass a law as soon as possible that's as strong as possible."

Milnikel said several confusing and limiting provisions exist in the proposed ordinance. For example, while the new ordinance would allow people who operate mobile food facilities to cook on board, it requires them to have commercial vehicle registrations and driver's licenses.

"It seems like this new opportunity to actually prepare on the go would be limited to food trucks," Milnikel said. "We are hoping to combat that notion and convince city hall that all sorts of entrepreneurs are interested in this field and can do great things with food carts at an affordable price."

Under the proposed ordinance, mobile food facilities will also work within a system that bars them from parking within 100 feet of a food establishment and within 200 feet of any food establishment that offers a "similar service."

Milnikel said she expects individuals who enforce the law to come to different conclusions about what the term "similar service" means.

"I can imagine that was an effort to be helpful to mobile food, to have some kind of compromise position, but because the terminology is so vague, it ends up being an enforcement nightmare and, therefore, a compliance nightmare for the businesses trying to follow the law," she said.

Today, Maloney parked his truck near the intersection of Hubbard and Wells.

He gets to the kitchen by 7 a.m. and prepares his entire menu from scratch. He aims to be out the door by 10 a.m. and at his planned location by 10:30 a.m. That's not always possible if he needs to circle the neighborhood to find a legal parking spot that's 200 feet away from a restaurant, he said.

Maloney said Homage Street Food could only benefit from changes in the rules that govern food trucks.

"To cook on board, that's most important," he said. "Right now we can't do anything. We can't touch the food. We can't make something to order. If someone doesn't want onions, we can't do that for them. Or, we have to offer disassembled meals, but that ruins the integrity of the dish."

As an example, Maloney pointed to his South African bunny chow, made with spiced chickpea or butter chicken curry and curry leaf buttered naan. The dish traditionally comes in a bread bowl, but they changed it to adhere to the city ordinance since they can't put the bunny chow in a bread bowl ahead of time or once they get on the truck.

Plus, any food prepared and packaged ahead of time that goes unsold gets thrown in the garbage, he said.

"If you 'under-guess' on what you think you'll sell, you lose out on potential sales," he said. "If you 'over-guess,' that's a lot of lost product."

Berlin, who helped start the My Streets! My Eats! campaign, said the ability to cook on board becomes critical for food truck owners. Concerns over whether owners can monitor sanitation while preparing food are "backward-looking," he said.

"These trucks and their location aren't a secret," he said. "When they're out and they're cooking, they want to be found by their clients."

Some proposals want food trucks to submit planned routes to the city, so inspectors can show up unannounced, Berlin said. But trucks already announce their locations ahead of time on Twitter or Facebook, he said.

"Part of what's so novel about food trucks and part of the unique service they bring is that they can go where the clients are," he said. "When you make restrictions, like filing something in advance, you're denying both the food trucks and potential base of clients who may enjoy buying a tasty boar naan-wich or tamale at exactly the time and place that the food truck and the client would like to make that transaction."

Jason Klinowski, an associate in the food industry group at Freeborn & Peters, first noticed food trucks a few years ago when he worked as a criminal defense attorney and spent time at 26th and California.

Now, as he handles food law, he considers the question of whether those food trucks offer safe, quality products as one of the most important.

Food truck owners need to operate out of a home base that is registered and regularly inspected by county or state health departments, he said. They need to give employees access to restrooms and to sinks so they can wash their hands. They must also follow rules on what they can serve, how they refrigerate or warm food and how they keep trucks clean.

"Technically, if it's done properly, there's not much reason why a food truck would not be a very good idea, a profitable venture," Klinowski said. "The obvious problem becomes when you ignore those."

As Farah prepared to launch Culture, The Yogurt Society, he saw the city of Chicago's health requirements as reasonable. He needed to meet the standard guidelines that apply to any restaurant — running water, enough refrigeration and proper sinks.

Elizabeth Milnikel, director of the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School, said, "We have clear proof that allowing mobile food distribution does not destroy the restaurant culture of a city."

Photos by Marina Makropoulos.

The rule that prohibits food truck owners from cooking food didn't bother him either. He prepackages the toppings and serves them separately from the frozen yogurt. Even though it becomes more labor intensive, it alleviates most concerns, he said.

"It's a cleaner experience for the customer," he said. "They don't have to worry about anything happening to food because it was sitting out."

Farah said he sees how a new ordinance could pose problems for current truck owners. If the city approves cooking on a truck, more trucks will join an already-packed crowd and make it more difficult to find places to park.

"Everyone that is a food truck owner wants to complain that this city or that city (allows cooking), but it doesn't matter," he said. "What makes Chicago such a great place is all the restaurants. They're not going to piss off 10,000 people to make 100 people happy."

Matt Revord, general counsel of Potbelly, hears several restaurateurs talk about what would happen if a food truck selling cupcakes pulls up in front of a neighborhood bakery.

But Revord said restaurants are a competitive business. Some endure and some don't last as long, he said.

He sees food trucks as fundamentally similar in that way, he said. He said they can play a role in the city's history of world-class and family-owned restaurants.

But, at the same time, Revord and others who work for brick-and-mortar stores want a level playing field. He wants to know that food trucks properly register, follow sanitation rules, pay their workers and adhere to the same regulations as all other restaurants, he said.

Revord also said food trucks and restaurants should uphold the same social standards. Restaurateurs who invest in their employees and their communities want to make sure they are still valued for filling those roles, he said.

"A lot of people look at restaurants as more than a place to go fill up with X amount of calories," Revord said. "Restaurants are a place for gathering, a place for warmth, a place for fun and a place for people to get together and share. Those are unique things to this industry.

"But again, people gather around food trucks for good reasons too. It's more that they're meeting the high standards that restaurants are expected to meet."

Anthony Licata, a shareholder and chief operating officer of Shefsky & Froelich, who practices as a member of the firm's restaurants and food service group, said his clients generally believe food trucks are unfair.

Established restaurants receive most of their business between 11:30 a.m. and 1:30 p.m. and between 6 p.m. and 8 p.m., Licata said. But to be open for those four hours each day, they need to pay rent for 24 hours.

Food trucks operate during those same peak hours, but since they drive in and set up shop, they get around paying rent or property taxes, he said.

"This really isn't about fear of competition," Licata said. "This is about an objection to the unfairness of people not having a vested commitment to the city.

"If you don't feel like bringing your truck into the city on a Wednesday morning, you don't have to, but if you have a restaurant, you're there every day, because you're paying rent every day."

Licata said the city needs to consider the rights of restaurant owners who invest millions of dollars to build, open and operate restaurants when it considers new rules related to food trucks.

"There is something to be said for protecting people who have created construction jobs, invested in real estate, paid property taxes and added to the overall economic vibrancy of the city," he said.

Klinowski, from Freeborn & Peters, said his restaurant clients might be upset by food truck competition. Many people make money off quick lunches and if food trucks can "amp up" their quality and offer unique, affordable options, they could take business away.

"To the extent someone endeavors to do it right, it's a real concern," Klinowski said. "People are always going to take the path of least resistance and if you have a good $5 sandwich, but this guy has a good $3 sandwich, and there's less of a wait, it becomes new and novel."

Milnikel talks with restaurants on both sides of the food truck debate — some fear the possible competition brought by more fast food and others appreciate the opportunity offered to creative chefs.

She tells those in the former category that it always hurts when an entrepreneur discovers a more efficient way to provide a product or service.

"I think that's part of this cycle of entrepreneurship and the economy and the city government should not be locking in the old-fashioned businesses and keeping down the innovative businesses," she said. "That's clearly bad for consumers."

Milnikel also said restaurants shouldn't fear competition since they have significant advantages over food trucks. They see more stability, sitting in the same place every day. They possess more storage space and less chance of running out of food.

She said it's an "overblown fear" that food trucks or carts would replace restaurants.

"Other cities like L.A. and New York, which have long had businesses preparing food on the streets and the sidewalks, have vibrant restaurant scenes," she said. "We have clear proof that allowing mobile food distribution does not destroy the restaurant culture of a city."

Matt Maroni opened Gaztro-Wagon — both his free-standing restaurant in Edgewater and the food truck — in July 2010.

The former Mid-America Club chef decided to fill a niche in the Chicago restaurant scene by bringing street food to its residents. He created the "naan-wich," made by stuffing unique ingredients like goat barbacoa, cauliflower, red onion, cilantro and Chihuahua cheese between naan bread.

Maroni, one of the first restaurateurs to take his craft to the streets via food trucks, soon began working to change the rules so food truck owners could prepare food on the go. He not only helped write the new proposed ordinance, but also stepped forward as a leader in the food truck movement.

When the city questioned food trucks' ability to monitor health and safety, Maroni gave city officials a 45-page memo on how it could be regulated, he said.

"They take it as, 'We have storefronts and the food truck business is Gypsy business,' " he said. "That it can't be controlled or regulated, which is not the case."

Maroni, who recently opened Morso, his second restaurant venture in Lincoln Park, said restaurants and food trucks should be able to work out a compromise.

"Some out there say we're stealing their customers," he said. "But last time I checked, it's a capitalist society. They look at it as unfair competing, but it boils down to us finding a better way to provide food to people."

Maloney, who recently set up a permanent kitchen for Homage Street Food in Irving Park, said while restaurants pay certain costs to access customers in a specific area, he also pays costs to run his business.

"Just because my operating costs aren't as high, they shouldn't use that as an excuse to block my business," he said. "It's the same as when someone on one corner pays $50 a square foot and someone on the other corner pays $40 a square foot. He got a better deal, but that's just business."

Find a food truck