On Friday, July 21, California Gov. Gavin Newsom signed a bill into law that strengthens the abilities of home cooks who sell food to the public. The Microenterprise Home Kitchen Operations program, known as Assembly Bill 1325, eases restrictions for home-operated cooking businesses across California.
Opening a restaurant is a heavily red-taped process. With hiring staff, funding construction, and securing permits, costs can be endless for operators and extend well beyond tens of thousands. Inspections from the health and fire departments may also stretch timelines into six months or longer for businesses that are still paying rent on a space that is not bringing in income. California’s new law could be a relief to home cooks hoping to enter the food space without the high overhead associated with opening a full-service restaurant.
AB 1325 is an expansion of California Assembly Bill 626, the Homemade Food Operations Act which was signed by former Gov. Jerry Brown in 2018. The AB 626 program initiated a county-level permit and inspection process. Under this law, microenterprise home kitchen operations (MEHKOs) that manufactured, packed, or handled any foods were required to apply for a permit and sell no more than 60 individual meals per week. MEHKOs were also not allowed to bring in more than $50,000 in verifiable gross annual sales.
AB 626’s co-authors found the initial program successful throughout the state and in their districts, specifically in providing economic opportunities for vulnerable communities. The new law was primarily written to bolster revenue for home-based food entrepreneurs. Under AB 1325, business owners in participating California counties can now operate their business from a private residence (versus a restaurant or industrial kitchen) with the following new guidelines:
- AB 1325 raises the limit on the number of individual meals a MEHKO can prepare and sell from 60 to 90 meals per week.
- AB 1325 raises the maximum amount of verifiable gross annual sales that a MEHKO can earn, currently no more than $50,000, to no more than $100,000 annually.
- AB 1325 clarifies the definition of a meal for MEHKOs. A meal is the amount of food consumed by a customer in one sitting which can include a main dish, appetizers, side dishes, beverages, baked goods, or desserts.
Though home kitchen businesses are far from new, from 2020 onward, there has been a significant rise in private, residence-based pop-ups in greater Los Angeles. Some examples include Comedor Tenchita, Campo é Carbón, and a regular rotation of pop-ups at Melody Wine Bar. At present, these pop-ups are thriving throughout Los Angeles, and AB 1325 could bolster the pop-up scene further.
AB 1325 contains an urgency clause that made the bill effective upon the governor’s signature. Previously, more than 40 California counties had not opted into AB 626’s statewide program, including Los Angeles County. At present, Los Angeles County’s home operators function under Assembly Bill 1616, the cottage foods law. Under AB 1325, these operators could earn more and have clear rules surrounding their businesses.