San Francisco's rules to protect small businesses stifle El Farolito's growth plans

A local Mexican-food restaurant looking to expand into San Francisco's North Beach has hit a roadblock. San Francisco's city's planning department says El Farolito has gotten too big to expand into the historic neighborhood. 

El Farolito has been making Mission-style burritos for nearly 40 years. The restaurant has grown over the years from one location to 11. The owners had hoped to make it an even dozen and started the process of opening a new location in San Francisco's North Beach.

But after a complaint, the city's planning department put the brakes on the latest location, saying the city's codes barring chain stores prevent it. "There are the rules, you have to apply them," said San Francisco Planning Department Chief of Staff Dan Sider. "Whether this is local El Farolito or Walmart we've got to apply these very prescriptive rules the same way."

Laurie Thomas from the Golden Gate Restaurant Association says those rules need to be more flexible. Eleven small locations held by a privately-funded, minority owned in this case, beloved organization should not be classed as a chain," said Thomas.

The city has a tough review process for any chain business looking to move into a neighborhood business district, and an outright ban in some areas, including Hayes Valley, Chinatown and North Beach. The aim was to protect small businesses.

But, some restauranteurs say a ban is a blunt instrument where finesse is needed. "Now is the time to figure out how make that happen, because this is a travesty," said Thomas. "It should not happen."

The city's planning department says the ball is now in El Farolito's owners court.

The owners can make some tweaks to the restaurant; changing the name, or the appearance or the menu and then apply.

So far KTVU has not heard back from the restaurant owners on if or how they plan on proceeding.