RSS
What's the point of regulating lemonade stands?
Shutting down lemonade stands costs kids important entrepreneurial experience
 
Yeah, it's tough out there kid.
Yeah, it's tough out there kid. (Jim Weber/ZUMA Press/Corbis)

Over the last 30 years, it seems like it has gotten a little tougher for kids to start that most Norman Rockwell of ventures, the lemonade stand.

Back in the 1980s and 1990s there were a few instances of local governments shutting kids' stands down for various reasons, although officials typically bowed to public pressure and allowed them to reopen.

In 1983, 6-year-old Ali Thorn's lemonade stand in Belleair, Fla., was closed down after police received an anonymous complaint that her sign did not comply with city ordinances, but was quickly allowed to reopen.

In 1988, 9-year-old Max Schilling's seven-foot high lemonade stand in Watchung, N.J., was shuttered after city officials claimed it was a permanent structure that sat too close to the street and threatened to fine him $500 a day. After a brief legal fight, Schilling's stand was allowed to reopen.

In 1993, 12-year-old Sarah Knott and 13-year-old Margaret Johnson's stand in Charleston, S.C., was shut down by police officers because they didn't have a peddler's license. However, after a public outcry, the city apologized to the girls and allowed them to continue.

More recently, though, local enforcement of lemonade stands seems to have grown stricter, or at least, more noticeable. The libertarian Freedom Center of Missouri has produced a map to show the locations of these incidents.

In 2010, 7-year-old Julie Murphy's lemonade stand in Portland, Ore., was shuttered because she did not have a temporary restaurant permit, a license that carries a $120 fee, although that decision was later reversed with a Multnomah County chairman admitting that food inspectors may have overstepped their bounds, saying, "A 7-year-old selling lemonade isn't the same as a grown-up selling burritos out of a cart."

In 2011, in Midway, Ga., a lemonade stand run by Kasity Dixon, 14, Tiffany Cassin, 12, and Skylar Roberts, 10 was shuttered because they didn't have a business license, a peddler's permit, or a food permit, all of which would have cost them $50 a day to obtain for temporary use or $180 for the year. Despite national media attention and complaints from residents, the city wouldn't back down.

And also in 2011, Caitlin and Abigail Mills' girl scout cookie stand in Hazelwood, Mo., was closed for violating an ordinance banning the sale of items from a residential property. The girls' family attempted to sue the city, but the case appears to have been dropped.

Let's not overstate it, though. Lemonade stand-shutdowns are not reaching epidemic-like levels, and no one is going to cart off little Suzie to jail for selling cookies outside her house. That said, there is something absurd about shutting down lemonade stands, even if it's still relatively rare.

The main risk of a tougher approach to children running food stands — and especially demanding that kids comply with costly licensing and strict city zoning laws — is that children will lose out on the entrepreneurial experience of running their first business, serving customers, and making money. If we want to have an entrepreneurial culture, where people innovate and take risks to build businesses, there has to be a certain amount of freedom and space for the young to learn these skills.

While navigating bureaucracy is definitely a useful entrepreneurial skill, expecting kids or their parents to fork out hundreds of dollars for a license to run their first business is punitive and anti-entrepreneurial. And every hour and dollar spent on inspecting or shutting down children's lemonade stands on technicalities is an hour and dollar not spent on inspecting food safety in actual restaurants, food processing facilities, and stores — places where a lapse in food safety could expose hundreds or thousands of people to illness.

And while city zoning laws are useful for keeping heavy industry away from homes, selling lemonade or girl scout cookies is really a residential activity. Many of the world's most famous businesses — Amazon, Apple, Disney, Google, Hewlett Packard — were started in garages. An entrepreneurial culture requires the freedom to start a business at home. If we stop businesses and businesspeople from developing, we lose the benefits that come down the road, like job creation and innovation (not that little Suzie's lemonade stand will likely grow to rival Tropicana, but you get the point...).

The sooner cities and counties realize this, and stop wasting resources going after the entrepreneurs of tomorrow, the better.

 
John Aziz is the economics and business editor at TheWeek.com. He is also an associate editor at Pieria.co.uk. Previously his work has appeared on Business Insider, Zero Hedge, and Noahpinion.

THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER

Subscribe to the Week