Arcata Bans "Formula" Businesses

In mid-May the city council of Arcata, California voted 4-to-1 to enact a citywide cap on the number formula restaurants. The measure must pass a second reading on June 5. It will become law 30 days later.

The ordinance defines a formula restaurant as one that shares the same design, menu, trademark, and other characteristics with 12 or more other establishments. The ordinance bars a formula restaurant from locating within the city unless it is replacing an existing formula restaurant at the same location. Arcata is home nine such businesses, include McDonald's, Subway, and Denny's.

The ordinance was the first formal proposal to emerge from the Committee on Democracy and Corporations. The committee was created following the passage of a voter referendum on the power of corporations in 1998. The referendum, called Measure F, won 60 percent of the vote and read in part: "the people of Arcata request that the city government of Arcata immediately act to establish, through the creation of an official committee, policies and programs which ensure democratic control over corporations conducting business within the city, in whatever ways are necessary to ensure the health and well-being of our community and its environment."

The Planning Commission endorsed the formula restaurant ordinance in February on a 5-to-1 vote after a two-hour public hearing in which more than 30 people spoke in favor. Many cited a need to protect Arcata's unique character from the cookie-cutter development that has overtaken much of the country. Many also highlighted the importance of supporting locally owned businesses and keeping dollars in the local economy.

The measure was also endorsed by Arcata Main Street, the city attorney, the city planner, and a mock city council comprised of high school students.

Source: Home Town Advantage e-Bulletin May 2002 edition.

For other examples of ordinances that restrict formula businesses, see the Institute for Local Self-Reliance. To learn more about the movement to restore democracy over corporations, see:

Democracy Unlimited
Reclaim Democracy