For Women & Co., by Erin Rooney Doland, Unclutterer.com
Summer is here and your kids may be making creative plans to ward off boredom by making a pop-up business one afternoon. Before they set up a lemonade stand or sell cookies to their neighborhood friends, be aware that such seemingly harmless entrepreneurial activities might be against local laws.
I had no idea temporary businesses children set up in their front yards could be illegal activities until I read a newspaper article about a town in Missouri that put two Girl Scouts out of business for selling boxes of cookies from their driveway. Apparently, a neighbor's complaint about increased traffic and barking dogs due to activity in front of their home led to the city's awareness of the sales. A letter from the city to the family then cited a violation of home occupancy codes -- they were selling without a permit. Upon further research, I learned Girl Scout cookie sellers aren't the only children having their afternoon businesses shuttered -- lemonade stands and many little businesses are running into trouble.
David Roland, the Director of Litigation and co-founder of the Freedom Center of Missouri, is representing the Girl Scouts in Missouri and agreed to speak with me about laws governing children entrepreneurs. Remember, as the legal representation for the two Girl Scouts, Roland has a strong viewpoint in favor of kids setting up lemonade stand-style businesses. He has a lot of good information, though, about how to help your kids avoid a run-in with local law enforcement.
Were we unwittingly breaking laws when we ran lemonade stands as kids, or are anti-lemonade stand laws relatively new on the books?
You might have been! Many of the laws that cities are applying to shut down kid-run concession stands have been on the books for decades -- it's just that up until recently no one ever imagined that they should be applied this way.
What is the reasoning lawmakers assign to such laws and do these laws restrict entrepreneurial activity beyond lemonade stands?
The official reasoning for these shut-downs varies from place to place. In Philadelphia, it was because the lemonade stand lacked a hand-washing station. In Appleton, Wisconsin, the city was just trying to protect vendors at a nearby fair from competition. In Hazelwood, Missouri, the city asserted a near-complete prohibition on the sale of goods in residential areas, which presumably would also include sales of Tupperware or Mary Kay cosmetics, or even sales made on eBay or Craigslist -- although you can have a garage sale in Hazelwood, as long as you first fill out a lengthy application and get the government's permission.
Is law enforcement actually shuttering businesses started by kids?
Unfortunately, they really are. At the Freedom Center of Missouri, we've created a map that shows all the towns across the country where government officials have cracked down on kid-run concession stands. The good news is that when the media shines its spotlight on these actions, the city officials usually backtrack and claim that it was all just a big mistake. But some cities, such as Hazelwood, Missouri, really do dig in their heels and insist that they need to be able to shut down little kids' concession stands. When Hazelwood refused to back down, we filed the first lawsuit in the country challenging whether our state and federal constitutions really give cities the power to attack such an innocent, harmless tradition.
How can young entrepreneurs find out the restrictions in their areas to make sure they are obeying laws? And, if laws do prohibit their lemonade stands, what can they do to try to get these laws changed?
If you want to make sure you're not breaking any laws, the best thing to do would be to call your city officials (the city clerk's office may be a good place to start) and ask if there are any laws that would prevent kids from running a temporary lemonade stand. [The staffers in this office] should be able to tell you if your stand is likely to run into any trouble.
I'd love to see groups of parents, teachers, and students working together with their local governments to protect this time-honored, entrepreneurial tradition. You could call your city council members and when you find one who shares your point of view, ask them to help you draft a bill that would guarantee kids the right to sell lemonade or cookies. Wouldn't that make for a fantastic way for local students to learn about the law-making process?
Women & Co., a service of Citi, is the go-to personal finance source for women. By providing financial content, commentary and community, Women & Co.'s mission is to get women thinking and talking about personal finance. Founded in 2000, Women & Co. is one of the longest running personal finance websites dedicated to helping women strengthen their financial futures.