War On Chain Restaurants

Moneybox
A blog about business and economics.
April 1 2013 10:21 AM

"Go Get Your Sandwich in Larchmont"

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Not in Eastchester, N.Y.

Photo by Jesse Grant/Getty Images for IMG

It's not all that unusual for ritzy neighborhoods to adopt rules designed to be hostile to chain restaurants, but this tale from Eastchester, N.Y., is unusually unsubtle:

“You can go get your sandwich in Larchmont,” said town Supervisor Anthony S. Colavita. “We aren’t going to cheapen the town with fast food or these formula fast-quick casual places.”
A 180-day moratorium on food business applications expires Wednesday, just in time for the new rules to kick in.
The amendment to the zoning code spells out what’s forbidden. The description matches what you’d expect walking into a store like Panera Bread, from the stand-up counter to the menu posted on the wall to minimal table service to the “standardized” decor and “corporate-driven” architecture. Restaurants with 15 or more locations are also unwelcome.
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The issue here is that town zoning used to take a functional approach and aim at discouraging fast-food restaurants, but the rise of so called "fast casual" chains like Panera "that mix quick service with a relaxed dining room" is fake forcing them to take a harder line. Now obviously if you happen to be a local business owner, this is good for you. But laws like this that give local capital an advantage versus remote capital are probably bad for wage earners. What you're essentially doing is creating a protected class of capitalists who are immunized against being put out of business by a more effective owner and manager. That has negative consequences for customers but also for workers—you're essentially stuck working for a less-competent boss in a lower-productivity role than you would be in a more competitive market.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.