FAIRFAX TOWN COUNCIL MEETING
STAFF REPORT
AGENDA ITEM #5
MEETING DATE March 4, 2026
PREPARED FOR Mayor and Town Council
PREPARED BY Jeffrey Beiswenger, AICP, Planning & Building Services Director Janet Coleson, Town Attorney
SUBJECT Adopt an Interim Urgency Ordinance Establishing a Temporary Moratorium on Formula Businesses.
RECOMMENDATION
Staff recommends the Town Council:
1. Adopt with a 4/5 vote of the Town Council, an interim urgency ordinance pursuant to Govt Code section 65858, to place a forty-five (45) day moratorium on the issuance of entitlements for new formula businesses, as defined in the ordinance.
BACKGROUND
The Fairfax Town Code contains regulations that apply to Formula Businesses within Article II (“Formula Businesses and Restaurants in Zones Allowing Commercial Uses”) of Chapter 17.040 (“General Zone Regulations”) and the Town is seeking to amend these regulations to update the regulations to better protect the community from negative impacts that may result from Formula Businesses (aka “chain stores”).
The Town has initiated an update process to the Town Code to address deficiencies, and the Fairfax Planning Commission held a study session on January 15, 2026 and a Public Hearing on February 19, 2026 to consider changes. The staff proposed changes presented at the Public Hearing were determined to be insufficient by the Planning Commission to adequately address impacts from Formula Businesses and staff was directed to further revise the proposed Code revisions.
DISCUSSION
Formula businesses have been widely studied throughout the United States and have a number of deleterious economic, social and environmental impacts. According to economic studies, formula businesses (“chain stores”) have negative economic impacts on local economies by extracting wealth from local communities. A recent study indicated that less than 14% of revenue from chain stores is recirculated locally, compared to 48% for independent businesses. Also, chain stores frequently offer lower wages and fewer benefits, reducing the quality of local retail employment. Chain stores can often force independent businesses to close (“The Impact of Chain Stores on Community”, Valamontes and Karantonis, ResearchGate.net, 2024).
Formula businesses that establish prior to the update of the Town Code regulations could have a negative impact on economic welfare of town residents by reducing the dollar value of recirculated revenue from stores, depressing wages and reducing other types of benefits for workers, and resulting in the closing of existing independent businesses. Additionally, businesses that establish prior to a Code amendment could result in numerous nonconforming businesses in the Town.
Formula businesses impact the unique identity of communities. The influx of national chains with common branding would erode the Towns unique village-like qualities, turning the small commercial area of Fairfax into a generic space, like many others in the United States.
Formula businesses create traffic safety impacts, especially fast-food restaurants, which have negative impacts on traffic since they rely on high traffic volumes to succeed. This contributes to expansive parking lots, complex drive-through lane configurations and spill over into public streets, which in turn creates increased traffic concentration, air pollution, environmental degradation and infrastructure impacts.
The Fairfax Town Center area is a pleasant, walkable, compact village environment. If a single formula business were to locate in the area, particularly if it had a drive-through, the following irreversible impacts would result:
• Significant disruption to traffic patterns of the community and irreversible damage to the transportation network, by blocking driveway, roadways and intersections. • Air quality and related health impacts with additional exhaust fumes from idling cars and increased traffic congestion.
• Water quality impacts from the additional run-off from vehicular parking and drive-through areas due to the added pavement.
• Climate change impacts, through additional heat from new pavement and additional Greenhouse Gas emissions from the car exhaust.
By adopting the attached interim ordinance, the Town Council determines that the Fairfax Town Code requires further review and revision to protect the public against potential negative health, safety, and welfare impacts due to the proliferation of formula businesses. By establishing a temporary moratorium, the Town would have the necessary time to complete the already underway revisions to the Code for Formula Businesses.
Failure to adopt this moratorium would impair the orderly and effective implementation of contemplated amendments to the Fairfax Town Code, and approval of entitlements for Formula Businesses before the new revisions are effective may be in conflict with, or may frustrate, the new amendments to the Code.
Adoption of this interim urgency ordinance resulting in a temporary moratorium on new formula businesses establishing in the Town of Fairfax requires a 4/5 vote of the Town Council.
Definition of a Formula Business
The current definition of a Formula Business in the Town Code is unclear. The term “formula retail” is defined as “[a]ny business that is required by a corporate headquarters or franchise or other arrangement to maintain any of the following: standardized services, decor, uniforms, architecture, signs or other similar features. This shall include but not be limited to any retail sales, service, visitor accommodation, wholesale or industrial operations that was not in business within the Town of Fairfax prior to April 1, 2000.” One key issue with the current ordinance is that “standardized” is not appropriately defined in the code and remains too vague. As such, it could be argued that any business in the Town that has a logo or trademark, requires employees to wear uniforms, or other vague standards should be considered
“formula retail”, which means that under the existing definition, all businesses in Fairfax might be considered a formula retail business.
Typically, jurisdictions that have formula business restrictions specify that the same kinds of logos, uniforms, signs, and inventory must be used at a minimum number of locations to be considered a formula retail business. Many jurisdictions use a numeric threshold to avoid sweeping in local businesses that merely have a logo. For the purposes of this interim urgency ordinance, the following definition is recommended:
“Formula Business” means a type of retail business, including food service, that has eight (8) or more locations in operation, located anywhere in the world, and which uses two (2) or more of the following as part of its business operations:
1. Uniform array of merchandise or menu;
2. Uniform color scheme;
3. Uniform décor;
4. Uniform façade;
5. Uniform layout;
6. Uniform signage, service mark, or a trademark;
7. Uniform apparel.
General Plan Consistency
The proliferation of Formula Business is inconsistent with the following Goals, Policies and Programs of the Town of Fairfax General Plan:
• Policy LU-2.1: Preserve and enhance Fairfax's village-like quality and the features that contribute to it. Analysis: Formula businesses conform to a national template for building design, merchandise, menu items, signage and other components and are not consistent with Fairfax’s unique village-like qualities.
• Goal LU-3: Strengthen the role of Town Center area as the commercial and cultural focal point of community life. Analysis: Formula businesses would weaken the Town Center as the focal point of community life by creating a generic built environment inconsistent with Fairfax’s unique village-like qualities.
• Policy LU-3.4: Recognize that a diversity of architectural styles contributes to Fairfax's charm and promote a variety of building types, styles, and features within the Town Center Area, consistent with its village-like qualities. Analysis: Formula businesses have standardized architectural designs and Fairfax does not have regulations in place that would require that the buildings conform to the local architectural styles. This would lead to generic buildings inconsistent with Fairfax’s unique village-like qualities.
• Policy LU-4.1: Preserve and enhance Fairfax’s village-like qualities and sense of community while allowing and encouraging appropriate infill development. Analysis: The Fairfax Town Code has inadequate regulations to implement this policy. Time is needed, to develop code language prior to the processing entitlements for potential formula businesses. • Program LU-4.1.1: Promote context-sensitive design throughout the Town, based on objective standards for height, bulk, scale, landscaping, parking, setbacks, streetscapes, and other aspects of development. Analysis: The Fairfax Town Code has inadequate regulations to implement this
policy. Time is needed, to develop code language prior to the processing entitlements for potential formula businesses.
• Policy LU-5.1: Foster the preservation, restoration, and compatible reuse of historically significant structures and sites in Fairfax. Analysis: Formula businesses have standardized architectural features and Fairfax does not have regulations currently in place that would require that any new or remodeled building conforms to local architectural standards. This would lead to creating generic buildings inconsistent with Fairfax’s unique village-like quality.
ENVIRONMENTAL ANALYSIS
The Town Council finds that this interim urgency ordinance is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly. The Town Council further finds, under Title 14 of the California Code of Regulations, section 15061(b)(3) that this interim Urgency Ordinance is nonetheless exempt from the requirements of CEQA, because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment since it prohibits the establishment of uses.
FISCAL IMPACT
There is no fiscal impact associated with this action.
ATTACHMENT
Proposed Interim Urgency Ordinance
Town of Fairfax
Urgency Ordinance
URGENCY ORDINANCE
AN INTERIM URGENCY ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF FAIRFAX, ENACTED PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 65858 PROHIBITING
THE GRANTING OF ANY ENTITLEMENT FOR A FORMULA BUSINESS IN THE TOWN OF FAIRFAX FOR A 45-DAY PERIOD, PENDING STUDY AND ADOPTION OF REGULATORY AND
ZONING STANDARDS
WHEREAS, the Town of Fairfax (“Town”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, Article 11, Section 7 of the California Constitution authorizes the Town of Fairfax to make and enforce within its limits all ordinances and regulations not in conflict with general laws; and
WHEREAS, the unregulated development of Formula Businesses, as defined in this Urgency Ordinance, presents an immediate threat to the public health, safety and welfare for the following reasons:
• Staff is aware of ongoing commercial leasing activity in the Town, including in the downtown area. Under current regulations, Formula Businesses could obtain necessary approvals and establish operations.
• Once established, such businesses may enter into long-term leases, invest in tenant improvements, and assert vested rights. Interim regulation is necessary to preserve the status quo while anticipated new regulations are finalized. • The Town’s distinctive and unique village-like environment is a core community value.
Establishment of Formula Businesses during the completion of the Town’s anticipated new Formula Business regulations could result in a proliferation of nonconforming uses and potentially irreversible changes to the Town’s valued village-like environment and qualities.
• Formula Businesses that establish prior to the update of the Town Code regulations could have a negative impact on economic welfare of town residents by reducing the dollar value of recirculated revenue from stores, depressing wages and reducing other types of benefits for workers, and resulting in the closing of existing independent businesses. • Formula Businesses create traffic safety impacts, especially fast-food restaurants, which have negative impacts on traffic since they rely on high traffic volumes to succeed. This contributes to expansive parking lots, complex drive-through lane configurations and spill over into public streets, which in turn creates increased traffic concentration, air pollution, environmental degradation and infrastructure impacts.
WHEREAS, due to the health, safety, and welfare impacts of Formula Businesses, the Town has embarked on a months long study and assessment of the appropriate types of local regulations that can address the negative impacts from Formula Businesses; and WHEREAS, California Government Code Section 65858 provides that, without following the procedures otherwise required prior to the adoption of a zoning ordinance, an urgency measure in the form of an interim ordinance may be adopted by a four-fifths vote of the Town Council to protect the public from a current and immediate threat to the public health, safety, or welfare resulting from Town of Fairfax
Urgency Ordinance
a contemplated zoning proposal. Government Code Section 65868 further provides that such an urgency measure shall be effective for only 45 days following its adoption, but may be extended beyond the initial 45 day period, following compliance with that Section, for an additional 10 months and 15 days and subsequently for an additional 12 months; and WHEREAS, Town staff requires time to finish developing regulations regarding Formula Businesses, and to amend the Town Code to address the potential impacts caused by these uses; and
WHEREAS, as a result, the Town Council desires to institute a forty-five (45) day moratorium on the approval of any land use entitlement so that the Town can finalize the expected new regulations resulting in protection for the Town’s citizens and community.
THE TOWN COUNCIL OF THE TOWN OF FAIRFAX DOES ORDAIN AS FOLLOWS:
SECTION 1. FINDINGS.
The above recitals are true and correct and are incorporated herein by reference. The Town Council hereby finds and determines that the unregulated establishment of Formula Businesses constitutes an immediate threat to the public health, safety and welfare of the community. The approval of additional entitlements for Formula Business establishments will further threaten public health, safety, and welfare. The adoption of this Urgency Ordinance is therefore necessary for the immediate protection of the public safety, health and welfare.
SECTION 2. COMPLIANCE WITH CEQA.
The Town Council finds that this Urgency Ordinance is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly. The Town Council further finds, under Title 14 of the California Code of Regulations, section 15061(b)(3) that this interim Urgency Ordinance is nonetheless exempt from the requirements of CEQA, because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment since it prohibits the establishment of uses.
SECTION 3. MORATORIUM.
During the time this Ordinance is in effect, no entitlement shall be issued for the establishment or operation of a Formula Business, as defined herein, unless this moratorium is extended or terminated by the Town Council.
As used in this Urgency Ordinance, the following definitions apply:
A. “Establish” or “operate” means and includes any of the following: (i) the opening or commencement of the operation of a Formula Business; (ii) the conversion of an existing business, facility, use establishment, or location to a Formula Business; and/or (iii) the addition of a Formula Business to any other existing business, facility, use, establishment or location.
Town of Fairfax
Urgency Ordinance
B. “Formula Business” means a type of retail business, including food service, that has eight (8) or more locations in operation, located anywhere in the world, and which uses two (2) or more of the following as part of its business operations:
1. Uniform array of merchandise or menu;
2. Uniform color scheme;
3. Uniform décor;
4. Uniform façade;
5. Uniform layout;
6. Uniform signage, service mark, or a trademark;
7. Uniform apparel.
Notwithstanding the prohibition contained in this section, the Town will continue to accept and process applications for uses prohibited by this moratorium if so required by State law. Any application received and processed during the moratorium shall be processed at the applicant’s sole cost and risk with the understanding that no permit, license, approval or other entitlement for a use covered by this Section may be issued while this moratorium or any extension of it is in effect.
In addition, any person who lawfully holds an existing permit, license, and/or land use entitlement for an existing and lawfully operating Formula Business, as of the effective date of this Urgency Ordinance may continue to lawfully operate under that existing permit, license, and/or entitlement.
Nothing herein shall limit the authority of the Town to revoke or suspend any existing license, permit, and/or entitlement as authorized under existing law.
SECTION 4. ADOPTION.
Pursuant to Government Code Section 65858 and 36937, this interim urgency ordinance is designed to protect the health, safety, and welfare of the Town and its residents and becomes effective immediately upon adoption by a four-fifths (4/5) vote of the Town Council following the notice and public hearing required by Government Code Section 65858(a).
SECTION 5. TERM.
This Urgency Ordinance is adopted under the provisions of Government Code Section 65858 and 36937(b), and shall take effect immediately upon its passage by a four-fifths vote of the Town Council. This Urgency Ordinance shall remain in effect for forty-five (45) days from its adoption, unless earlier repealed or extended pursuant to law.
SECTION 6. REPORT REQUIRED
No less than ten (10) days prior to the scheduled expiration of this Urgency Ordinance, staff shall issue a report to the Town Council on the progress of its study and on determinations for how the Town should proceed, insofar as conclusions have been drawn.
SECTION 7. SEVERABILITY
If any provision of this Urgency Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional, such invalidity or unconstitutionality shall not affect other provisions or applications of this Urgency Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Urgency Ordinance are severable. The Town Town of Fairfax
Urgency Ordinance
Council hereby declares that it would have adopted this Urgency Ordinance irrespective of the invalidity of any particular portion thereof.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Fairfax, held on the 4th day of March 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_______________________________
STEPHANIE HELLMAN
MAYOR
ATTEST:
_________________________________
CHRISTINE FOSTER
DEPUTY TOWN CLERK