Owning a small business can be tough. But when Nancy Chang realized she had to work two more jobs to support her home restaurant, doubt crept in.

“You need to be financially stable or have multiple sources of income to run a MEHKO,” Chang said, referring to Micro-Enterprise Home Kitchen Operations, the official term for home restaurants. “You can’t live a doable lifestyle just on a MEHKO.”

This is a common situation for Bay Area cooks who decide to operate a restaurant outside their home – a business model that has helped many low-income immigrants and people of color make a living for years, even though it wasn’t legal until recently. The problem escalated during the pandemic, when many fired chefs served food away from home in an effort to make ends meet and then were shut down by Alameda County officials.

Now, some home restaurateurs are wondering if the strict regulations and financial realities are worth it.

Growing pains may be unavoidable with any major new effort, such as home dining regulations, said Roya Bagheri, executive director of Cook Alliance, an advocacy group.

“Some home chefs wish they could do more with MEHKO operations,” Bagheri said, while others find MEHKOs to be a “suitable stepping stone to an eventual brick-and-mortar opening.”

Purpose & Hope soups simmer on the stove in Nancy Chang’s home in Oakland.

Andria Lo/Special at The Chronicle

Although a California law went into effect in 2019 allowing cooks to sell food away from home, only a few places have implemented permit systems for such home kitchens in the Bay Area: Alameda, San Mateo, and Solano counties, as well as the city of Berkeley. Alameda County was the first county to allow such operations, granting the first permits about a year ago.

Of 49 home cooks who applied for permits, only 24 still have active home restaurants, according to the Alameda County Department of Environmental Health. The remaining 25 drive-in restaurants are closed or have an unknown status. In other words, more than half of these operations were apparently unsuccessful – a rate well above what is typical for full-fledged restaurants. According to a UC Berkeley researcher report 2014approximately 17% of independent restaurants fail in their first year.

Limits imposed by law are a major source of the challenges home restaurants face: they can only generate $50,000 in annual sales; sell a maximum of 30 meals per day or 60 meals per week; and have only one full-time employee, which is themselves. The latter is taking its toll on home chefs like Chang.

Nancy Chang, owner of Purpose & Hope, adds cordyceps to miso-based soup in the kitchen of her Oakland home.

Nancy Chang, owner of Purpose & Hope, adds cordyceps to a miso-based soup in the kitchen of her Oakland home.

Andria Lo/Special at The Chronicle

“I’m ready to do the work now because I find it extremely rewarding, but it’s the most intense effort I’ve ever undertaken,” she said.

Chang opened his restaurant at home, a soup kitchen called Purpose & Hope in Oakland, in response to his mother’s unsuccessful battle with cancer. But she didn’t know how to start a business from scratch. So while ordering shelter in place from the city, she took an online business acumen course through the Renaissance Entrepreneurship Center in San Francisco. “It gave me the strength to feel comfortable to finally launch my business,” Chang said.

Chang then took to crowdfunding website GoFundMe, where she raised over $7,000. Chang knew that this amount was only enough to start his operation, not enough to sustain it. So she took on two jobs, one working for a third-party Amazon seller and the other for a local artist.

Nancy Chang, owner of the Purpose & Hope home restaurant, prepares soup to take to the Charlotte Maxwell Clinic.

Nancy Chang, owner of the Purpose & Hope home restaurant, prepares soup to take to the Charlotte Maxwell Clinic.

Andria Lo/Special at The Chronicle

Other chefs said the rules were difficult but not impossible. Elijah Brown, the owner of Pimpin Chkn, an Oakland home restaurant specializing in fried chicken, has worked in the restaurant industry since he was 16, taking on different roles such as food styling and consulting. Now operating Pimpin Chkn from his Oakland apartment, he also rents out space in his home to companies for events. He offers catering and photography services to tenants, which help him supplement his income.

“I pride myself on having multiple sources of income, so the $50,000 limit doesn’t affect me that much,” Brown said. “However, they (the Alameda Environmental Health Department) need to stop acting like $50,000 isn’t touching the poverty line.”

The department did not respond to a question about Brown’s perspective and only responded to The Chronicle by sending a PowerPoint presentation on MEHKOs.

Other drive-in restaurant operators have found the process more difficult, starting with obtaining a permit from the Alameda County Department. A fee of $696 covers training on food safety requirements, an on-site residence assessment and a routine inspection.

Nancy Chang prepares her soups at the Charlotte Maxwell Clinic, which provides integrative care for low-income women with cancer.  Purpose & Hope soups are provided free of charge to clinic clients.

Nancy Chang prepares her soups at the Charlotte Maxwell Clinic, which provides integrative care for low-income women with cancer. Purpose & Hope soups are provided free of charge to clinic clients.

Andria Lo / Special for The Chronicle

For chef Armando Cervantez, who launched Stew the Llama as a Peruvian hot dog restaurant, the process seemed slow: “I had to wait two months after submitting my application to be approved,” he said. he declares.

Before Stew the Llama, Cervantez worked as an employee of Trader Joe and dreamed of selling food for his community at Fruitvale in Oakland. He thought the California law giving MEHKOs the green light would open a way for him to quit his job at a grocery store. But it wasn’t long before Cervantez was overwhelmed by the requirement for MEHKOs to have only one full-time employee.

“I couldn’t do all of this on my own,” he said.

Cervantez closed his home restaurant in December, just a month after receiving his permit.

Instead, he continues to sell Peruvian food to his community under the name Stew the Llama, but this time in pop-up form.

Elgin Nelson is a writer for the San Francisco Chronicle. Email: [email protected]