SAN FRANCISCO -- San Francisco restaurant owners are complaining about new competition from street vendors selling gourmet goodies and demanding that the board of supervisors to take action.

Under current law, food carts in San Francisco must have a permit and be located at least two blocks from any restaurant or business that sells food.

A boom in gourmet street food in San Francisco finds vendors selling a variety of different ethnic cuisines as well as fancy deserts including high-end cupcakes and crème brulee.

“[It’s] very unique, very unique,” said food cart customer Mark Ruhe. “It's not like something you can find in a restaurant.”

But recently in the Castro district, many bricks and mortar restaurants protested when Kara's Cupcakes set up shop in a van without a proper permit.

"It's not fair competition to have a mobile food vendor to take up parking places on the street,” said Dennis Ziebell, the owner of Castro diner Orphan Andy’s. “They move around.” 1439

Stephen Adams, President of Merchants of Upper Market And Castro, agreed: "If we have to do it as small business, brick and mortar buildings, then the mobile vendors should have to as well just to keep the playing field even."

Some street vendors say the permitting process is too complicated. On Monday, San Francisco Supervisor Bevan Dufty led a hearing at city hall to discuss mobile food vendor regulation.

'As a city we do have a responsibility,” said Dufty. “We don't want rogue carts out there, because food needs to be well-prepared."

SF Public Health Director Richard Lee said his department inspects all 160 mobile food vendors who have permits, but admitted there are others selling food illegally.

"We want to be able to make sure they're inspected so they serve food properly and that's one of our main goals," said Lee.

Permitting fees can cost from $1,000 to $10,000 or more, a fraction of what restaurant owners pay for rent, utilities and health care costs. But some street vendors said food carts give budding entrepreneurs a chance to start a small business.

"For the past year, I've been running around with a basket of Chilean empanadas, trying to raise the capital in order to open the doors of my small business," said street vendor Paula Tejada.

Supervisor Dufty said the permitting process needs to be streamlined and enforced. He plans to draft new legislation in the next six-to-eight weeks.