Lemonade Stands and Permits

Today is National Lemonade Day. For many Americans a lemonade stand was their first experience in entrepreneurship. But unfortunately, this time honored tradition that teaches the value of hard work, entrepreneurship, and innovation may be under threat from overzealous grown-ups.

Should we really force kids to get licenses to start lemonade stands, sell bottles of water outside a ballpark, or mow lawns for a little extra money? And wouldn’t it be better to teach them the value of hard work and entrepreneurial effort instead of threatening them with penalties for not getting costly permits to do basic jobs?

Recent news stories have highlighted examples of kids being confronted with local regulations that essentially tell them not to be entrepreneurial until they’ve gotten someone’s blessing–or else face fines or other penalties for those efforts.

Out in San Francisco, for example, a neighbor threatened to call the police on an eight-year-old girl selling water to raise money for a trip to Disneyland after her mother had lost her job. The neighbor berated the little girl for “illegally selling water without a permit.” Luckily, national outrage seems to have fallen in favor of this rogue entrepreneur instead of “Permit Patty.” But this is far from an isolated case.

Another story went viral earlier this year involving kids and lemonade stands. Country Time lemonade pledged to pay the fines received or the permit cost for children’s lemonade stands. Who thought we’d reach the day when we need a Lemonade Legal Defense Fund? But just prior to the launch, Stapleton, Colorado police were called to shut down the lemonade stand of  four and six year-old brothers for failing to have a business license. Kids who probably can’t read or fill out the necessary forms are expected to obtain a formal license for a tradition that dates back about 120 years.

Kids are confronted with other meddlesome local permitting rules even when they aren’t selling food or beverages. The town of Gardendale, Alabama made news last year after attempting to charge a teenager $110 for a business license for mowing neighbors’ lawns during the summer to earn money for a mission trip. A local professional lawn service had apparently pressured local parents about the need for kids to have licenses to mow. The city later clarified teenagers would be allowed to mow lawns for a little extra money without needing a license to do so as long as the work was part-time and they were students.

Should we have expected kids to seek permits in these cases? Some sticklers might say yes, we should. After all, it’s the law!

But complying with the law is costly in two important ways. First, the actual fees can be exorbitant. In San Francisco, for example, the filing fee for a “peddler’s permit” costs $330-$525 depending on whether you are selling non-food or food items. Then, if you get the city’s blessing, you have to pay an additional $166-$624 annually for a license to serve the community. It’s safe to say that most kids and their parents probably could not afford that expense.