El Farolito North Beach expansion is uncertain; ‘formula retail’ decision looming

To paraphrase Gertrude Stein, a burrito is a burrito is a burrito. Or is it? 

More specifically: Is El Farolito the same as El Favorito? 

San Francisco’s Planning Department may soon be forced to parse this very question, and the answer will determine if Mission-born Taqueria El Farolito will be granted permission to open a proposed North Beach restaurant at 1230 Grant Ave., between Vallejo Street and Broadway.

Since mid-month, El Farolito signs have been prominently displayed in the window of this site, formerly the home of the restaurant The House, and a literal stone’s throw from North Beach mainstays Caffe Trieste and The Saloon. And there was much rejoicing: Online reactions were jubilant, and an ebullient article in the Chronicle announced “S.F. burrito legend El Farolito is coming to North Beach.”

Not so fast. El Farolito may be a beloved local institution and the answer to many a late-night prayer, but it also may be “formula retail.” And the city Planning Department’s forthcoming ruling on that matter will be pivotal.

“This is pretty mission critical,” confirms Dan Sider, the department’s chief of staff. He adds that if El Farolito is, indeed, ultimately determined to be a formula retail entity, there is no remedy in North Beach. In this neighborhood, per the planning code, “it’s cut and dried. It’s simply not permitted. There’s no path forward.” 

San Francisco has limited chain stores — i.e. formula retail — since it enacted a 2004 ordinance penned by Supervisor Matt Gonzalez. In 2007, 55.3 percent of city voters approved Proposition G, which added additional steps to any formula retail expansion in San Francisco (Does this mean the voters might be required to approve certain key changes regarding formula retail? It might.). 

In 2014, Supervisor Eric Mar passed legislation that reduced the number of worldwide outlets necessary for a store to be labeled “formula retail” from 19 to 11.   

Perusing El Farolito’s website, 12 locations are listed in the greater Bay Area, which is too many.

El Farolito closed its Beach Street location in San Francisco last year. But 11 restaurants is still too many to add more (online accounts that El Farolito shuttered its San Rafael restaurant were premature; workers there confirmed that it has reopened).   

But this is where things grow complicated. On an “Affidavit for Formula Retail Establishments” submitted to the Planning Department on Aug. 20, El Farolito president Irene Lopez states there are only eight El Farolitos, and the North Beach outlet would be called “El Farolito # 9.”    

“We are a corporation, and under this umbrella you will find the 8 El Farolito’s and two dinners [sic] with a different name and menu,” Lopez wrote to a senior city planner on Aug. 19. 

Reviewing the locations listed on El Farolito’s website, both the Santa Rosa and Rohnert Park locations are actually called “El Favorito.” The San Rafael and Suisun City restaurants are called “El Farolito,” but the signage is in a script akin to an old-timey baseball uniform, not at all like the distinctive yellow and black logo with a lighthouse and block-lettered “TAQUERIA EL FAROLITO” in its beams of light.  

Incidentally, the “El Favorito” restaurants do use the lighthouse logo — even though they’ve taken the word “faro” (lighthouse) out of the name. Finally, a “Mi Farolito” is apparently erroneously included on the map on El Farolito’s website. That restaurant, wedged in a Rohnert Park strip mall between a Little Caesar’s and a Subway, is a wholly different eatery. Workers there said they are not affiliated with the El Farolito chain. 

Oddly, on El Farolito’s affidavit, in addition to claiming only eight total restaurants, it lists just two in San Francisco. Yet there are three San Francisco El Farolitos: one at Mission and 24th streets, one at 24th and Alabama streets and one at Mission and Onondaga streets in the Excelsior.

Lopez has not yet returned calls or emails from Mission Local. A message left for her agent, Erick Argüello (no relation to the Erick Arguello from Calle 24) has also not been returned.  

Will the Farolito/Favorito distinction make a difference in the eyes of the Planning Department? It could. Under section 303.1 of the Planning Code, a “formula retail” business must maintain “two or more of the following features: a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, uniform apparel, standardized signage, a trademark or a servicemark.” 

There is, clearly, room for interpretation here. That decision will, eventually, be made by Zoning Administrator Corey Teague. If his determination is not to El Farolito’s liking, the next step is to take the matter to the Board of Appeal. 

But, Sider says, no determination has yet been made. In fact, El Farolito hasn’t even yet made its case. 

“I wanted to reach out to you as the Department has been getting a lot of inquiries into the restaurant establishing itself in North Beach,” wrote planner Claudine Ashbaugh to Lopez and her agent on Aug. 30. 

“I didn’t see any permit activity online and thought I’d reach out to you in advance of you filing for the necessary permits and/or approvals. In your correspondence with Linda, you mentioned that the company has additional restaurants but that they had different names and menus. I was wondering if you could send us any information (menus, photos, etc.) so we can confirm that the new restaurant would be allowed at the location.

“We know it’s been a rough year for restaurants and wanted to be pro-active in reaching out.

Thank you for any information you can provide and take care.”

El Farolito will need to obtain building permits to do any work on the site, plus a health permit before opening a restaurant, but none of those will be worth a hill of beans without the Planning Department’s determination that this business doesn’t trigger formula retail restrictions. 

All of this leads to questions about the efficacy of the city’s formula retail rules. While, 17 years ago, this was seen as a means of preventing bastions of family-run businesses like North Beach from being overrun by Starbucks and the Golden Arches, the rules may keep a San Francisco-born, family-run enterprise like El Farolito out as well. 

“We are not a franchise, and we are not globally known. We are a family-owned business,” Lopez wrote to the Planning Department on Aug. 19. 

Adding salt to El Farolito’s potential wound, San Francisco’s rules focus on brick-and-mortar establishments. The city has approved clothing stores like Everlane and Atleta, which are owned by massive companies but featured few actual stores because most of their business is online. That allowed them to squeak through the restrictions on formula retail. 

Changing San Francisco’s Planning Codes would take months. El Farolito has already signed a lease, which is something the Planning Department suggests an aspiring restaurant owner not do until formula retail and other questions are settled. Waiting for the rules to be changed would figure to be an expensive proposition, and that time frame assumes the Board of Supervisors would be inclined to change the rules. 

The proposed El Farolito site is in Supervisor Aaron Peskin’s district. His office sent the following statement: “We’re strong supporters of San Francisco’s controls on chain stores and they remain very popular in North Beach, but the Planning Department is working to determine whether it’s even an issue in this case.”

The Planning Department, meanwhile, is awaiting El Farolito’s next move. 

“If we’re parsing black beans from refried beans and how that relates to a ‘standardized array of merchandise’ — that’s not a place we’ve been before and not a place the city would like to go,” says Sider. “When they make their filing, we’ll work with them to see what their path is.”