San Francisco Weighs Restrictions on ‘Formula’ Businesses

Date: 1 Sep 2003 | posted in: Retail | 0 Facebooktwitterredditmail

San Francisco Board of Supervisors President Matt Gonzalez has introduced legislation requiring that neighbors be notified whenever a formula retail store or restaurant seeks to open in their neighborhood. Residents would have the option of requesting a public hearing and formal review by the Planning Commission. The law would also ban formula businesses entirely from the Hayes-Gough neighborhood, the district Gonzalez represents.

“Formula” businesses are legally defined as those that have standardized characteristics and methods of operation similar to other establishments. Many chains and franchise outlets qualify.

As we reported in the last issue of this Bulletin, an earlier measure sponsored by Gonzalez applied only to drugstores and coffee shops. After constituents complained that it did not go far enough, he returned with the current proposal covering all formula businesses.

“The increasing number of formula/chain stores has a homogenizing effect on our neighborhoods and makes it more difficult for local and independent businesses to have a foothold in the city,” Gonzalez said, noting that his proposal furthers one of the eight priority policies in the city’s master plan. The policy resolves that “existing neighborhood-serving retail uses be preserved and enhanced and future opportunities for resident employment in and ownership of such businesses enhanced.”

The measure is now before a subcommittee. It may be several months before a vote by the Board of Supervisors. Several smaller towns around the country have banned or restricted formula businesses. San Francisco would be the largest city to date to regulate them.

Meanwhile, in November, San Francisco voters will consider a measure to strengthen the city’s Small Business Commission. The current commission is appointed by the mayor and has little real authority. The referendum proposal calls for writing the commission into the city’s charter, making it an independent body, with its own budget, increased clout, and authority over the city’s Small Business office. The referendum is backed by San Francisco Small Business Advocates and the Small Business Network.

More Information:

  • — Examples of formula business ordinance
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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.