Key Takeaways:
- The ADDE Act (SB-68) applies to restaurant brands operating 20 or more US locations under the same name, with at least one site in California, serving a substantially similar menu.
- Coverage is based on the total US location count, not just California sites. A chain with 200 locations and one in Los Angeles is in scope.
- Ghost kitchens, virtual brands, delivery-only operations, and franchise models are all covered if they meet the threshold.
- Pre-packaged food retailers, mobile food carts, and temporary setups such as festival booths are not covered.
- Dine-in service is not required for coverage. The obligation extends to every channel where a customer can view your menu, including third-party delivery apps.
- If your business sits on the boundary, the safest approach is to treat your operation as covered. The cost of preparing and being exempt is far lower than the cost of non-compliance.
Quick Answer: Does the ADDE Act Apply to Your Business?
The ADDE Act (SB-68) applies to restaurant businesses that operate 20 or more US locations under the same brand name, with at least one location in California, and serve a substantially similar menu across sites.
You are likely covered if:
- Your brand operates 20 or more US locations under the same name, signage, and core menu.
- At least one of those locations is in California.
- You prepare and serve food directly to customers, whether dine-in, takeout, or delivery.
- You operate as a franchise, corporate chain, ghost kitchen, or virtual brand sharing a consistent menu.
You are likely not covered if:
- Your brand has fewer than 20 US locations.
- You have 20 or more locations but none in California.
- You only sell pre-packaged food that already carries federal allergen labeling under FALCPA.
- You operate a mobile food cart or temporary setup such as a festival booth.
The 20-location count includes every US site under your brand, not just those in California. A national chain with 200 locations and a single site in Los Angeles is in scope. A 15-location regional group is not.
If you are unsure whether your brand meets the threshold, the sections below break down how the rule applies to different business types, franchise models, and growing operations.
What Types of Businesses Are Covered?
SB-68 does not apply only to traditional sit-down restaurants. The law covers any food business that meets the 20-location threshold and prepares food for direct service to customers. The business type matters less than the operating model.
Restaurants and Food Service Businesses
Full-service restaurants, quick-service and fast-casual chains, cafes, and takeout-focused businesses are all in scope if they meet the 20-location threshold with at least one California site. The common factor is that food is prepared on-site and served directly to the customer, which means allergen disclosure at the point of ordering is required.
Multi-Location and Chain Operators
Brands operating centralized or substantially similar menus across 20 or more locations carry the highest compliance exposure. Recipe consistency across sites is what triggers the requirement, but it also creates the complexity. A menu change at headquarters affects allergen data at every location. A supplier substitution at one distribution center can change the allergen profile of dishes across the portfolio. The more locations sharing the same menu, the more points where disclosure can fall out of sync. For guidance on managing that, see the article on building a multi-site allergen governance framework.
Delivery and Takeout Businesses
Physical dine-in service is not a requirement for coverage. Ghost kitchens, virtual brands, and delivery-only operations fall within scope if they meet the 20-location and California presence criteria. The allergen disclosure obligation extends to every channel where a customer can view your menu, including third-party delivery platforms. If a guest orders through a delivery app, the allergen information displayed there must be accurate and current. For more on where that responsibility sits, see the article on delivery apps and allergen responsibility.
What Types of Businesses May Not Be Covered?
SB-68 is targeted at restaurant operations that prepare and serve food directly to customers. Some business types fall outside that scope, though the boundaries are not always clear-cut.
Businesses that sell only pre-packaged food are generally not covered. If your products carry federal allergen labeling under FALCPA and are sold in their original packaging without further preparation, the federal labeling requirements apply rather than SB-68. This includes retail grocery operations and packaged food vendors.
Businesses that do not prepare food on-site are also unlikely to fall within scope. The law is directed at operations where food is assembled, cooked, or modified before it reaches the customer. A retailer selling sealed products from a supplier would not typically be covered.
Mobile food operations and temporary setups such as food carts and festival booths are excluded from the current scope of SB-68.
Edge cases require careful assessment. Some business models sit between clear categories. A few examples:
- A multi-brand operator sharing one physical kitchen (ghost kitchen hub) where each brand has its own menu and ordering channel; allergen disclosure applies per brand where the chain meets the 20-location threshold, not per kitchen site.
- A restaurant group with separate brands under a single parent company, where one brand exceeds 20 locations but others do not; SB-68 applies only to the qualifying brand, even if operations and suppliers are shared.
- A regional chain that expands past 20 locations during a phased rollout, where some locations are already serving updated menus while others are still transitioning; allergen disclosure must remain consistent across all live customer-facing channels at each stage.
This page is intended as operational guidance, not legal advice. If your business model sits on the boundary, seek a legal opinion specific to your operation before assuming you are exempt. The cost of non-compliance under SB-68 ranges from $500 to $2,500 per violation, with repeat offenses putting permits at risk.
Why the ADDE Act Applies to Certain Businesses
The ADDE Act exists because restaurant food carries an allergen risk that packaged food labeling does not fully address. When a customer buys a sealed product from a shelf, federal labeling laws require the allergens to be printed on the packaging. When a customer orders a dish in a restaurant, that same level of transparency has not historically been required at the menu level.
SB-68 closes that gap for the businesses where the risk is highest. Restaurants prepare food on-site, combine ingredients across multiple suppliers, modify recipes, and serve dishes where the allergen content is not visible to the guest. The customer has no way to verify what is in a dish without clear, written disclosure from the operator.
The law targets multi-location operations because the scale and complexity of their supply chains, menus, and staffing create more points where allergen information can become inaccurate. A single-site restaurant with a stable menu and one chef has fewer variables. A chain running the same menu across dozens of locations, with different suppliers, rotating staff, and multiple customer-facing channels, has significantly more.
Customers with food allergies should be able to make safe ordering decisions based on accurate, accessible information provided at the point of ordering.
Common Scenarios: Do These Apply to You?
If you are still unsure whether your operation falls within scope, these scenarios reflect the most common situations operators face when assessing SB-68 applicability.
“We operate multiple locations with shared menus.” If your brand runs 20 or more US locations under the same name with a substantially similar menu, and at least one site is in California, you are in scope. This is the most straightforward qualifying scenario. The compliance challenge is making sure allergen data stays accurate and consistent across every site. A recipe change at one location that is not reflected across the portfolio creates a disclosure gap at every other location still serving the old information. For how to manage that, see the article on maintaining a single source of truth for allergen information.
“We update our menu regularly.” Frequent menu changes do not change whether SB-68 applies to you, but they increase the compliance risk significantly. Every new dish, seasonal special, or limited-time offer needs its allergen profile documented before it reaches the customer. If your operation runs regular menu rotations without a process for updating allergen data at the same pace, disclosures fall out of date quickly. That applies to both your in-house menus and any third-party platforms listing your items. For guidance on handling temporary menu changes, see the article on ADDE Act compliance for specials and LTOs.
“We rely on staff knowledge for allergens.” Verbal allergen communication from trained staff can support disclosure, but it does not satisfy the SB-68 requirement on its own. The law requires written, item-level allergen information accessible to the guest at the point of ordering. If your current approach depends on servers knowing the menu well enough to answer allergen questions, that is not compliant under SB-68. Staff knowledge is valuable, but it needs to sit on top of written disclosure, not replace it.
“We offer delivery only.” Delivery-only and ghost kitchen operations are not exempt. If your virtual brand or delivery kitchen meets the 20-location threshold under a single brand name with at least one California presence, SB-68 applies. The allergen information on every delivery platform listing your menu must be accurate, current, and consistent with your internal records. The responsibility for that data sits with the operator, not the delivery platform. See the full breakdown in the article on delivery apps and allergen responsibility.
“We are a franchise, and each location sources locally.” The law applies to the brand, not the individual franchisee. If the overall brand meets the 20-location threshold, every in-scope location must provide accurate allergen disclosure regardless of how it sources ingredients. Where franchisees source locally or modify the central menu, the allergen profile at that location may differ from the rest of the chain. That makes it the franchisee’s responsibility to ensure their specific allergen data is accurate, while the franchisor remains responsible for providing verified data for the core menu. If franchise agreements do not specify who owns allergen data management, that ambiguity becomes a compliance risk.
What Happens If Your Business Is Covered?
If your operation meets the criteria, you are required to provide written, item-level allergen disclosure for the nine major allergens on every menu, across every customer-facing channel, by July 1, 2026.
That means allergen information must be accurate, accessible to the guest at the point of ordering, and consistent across in-store menus, websites, and third-party delivery platforms. It also means the data behind those disclosures needs to be maintained: supplier specifications reviewed, recipes mapped to allergens, and updates pushed through whenever something changes.
This is not a one-time setup. Ongoing accuracy is an obligation under the law, and operators are expected to disclose what they know or reasonably should know. Enforcement action for non-compliance may include citations, penalties, and corrective measures issued by local enforcement agencies under the California Retail Food Code, with potential impacts on operating permits in cases of repeated or unresolved violations.
For a full breakdown of what the requirements involve and how they work in practice, see the article on Restaurant Allergen Disclosure Requirements. For a step-by-step preparation plan, see the SB-68 compliance roadmap.
What to Do Next
If your business is covered, the steps below outline the order in which to approach compliance. Each links to the detailed guidance on the ADDE Knowledge Hub.
Step 1: Understand the ADDE Act
Start with the legislation itself. Know what SB-68 requires, who it applies to, and what the timeline looks like. This gives you the regulatory foundation before you start making operational changes. See the full overview in Preparing for the ADDE Act.
Step 2: Review Your Compliance Requirements
Once you understand the law, map out what it means for your operation specifically. This includes which allergens must be disclosed, where and how that information must be provided, and what “reasonably should know” means for your supplier and recipe data. See the full breakdown in Restaurant Allergen Disclosure Requirements.
Step 3: Assess Your Operational Risk
Compliance is not just a data exercise. The accuracy of what appears on your menu depends on what happens in the kitchen. Assess where your operation is exposed, particularly around cross-contact risk during food preparation and whether your teams are trained to handle allergen-safe orders consistently. Start with Cross-Contact vs Cross-Contamination: What Restaurants Need to Know and Training Staff for ADDE Act Readiness.
Step 4: Put Systems in Place
Manual processes can work in a small, stable operation, but multi-location compliance at scale requires structured systems. That means centralized allergen and recipe data that updates once and flows everywhere, audit trails that document what changed and when, and visibility across locations so gaps are identified before an inspector does. See Building a Central Allergen Database and Why Spreadsheets Fail for ADDE Act Allergen Management.
Still Not Sure? Start Here
If you have read through the criteria above and your business sits on the boundary, the safest approach is to act as though you are covered.
The cost of preparing for compliance and finding out you were exempt is minimal. The cost of assuming you are exempt and finding out you were not is a fine of up to $2,500 per violation, potential permit risk, and reputational exposure if a guest has an allergic reaction that could have been prevented by accurate disclosure.
Start by reviewing the ADDE Act overview to understand the full scope of the law. Then work through the compliance roadmap to see what preparation looks like in practice. Even if your operation turns out to fall outside the current scope, the allergen management standards SB-68 requires are moving in the direction the industry is heading nationally. Getting ahead of them now is not wasted effort.
If your business model is genuinely ambiguous, seek a legal opinion specific to your operation before making a compliance decision based on assumption.
Frequently Asked Questions
Who must comply with the ADDE Act?
The ADDE Act (SB-68) applies to restaurant chains operating 20 or more US locations under the same brand name, with at least one location in California, serving a substantially similar menu. This includes corporate chains, franchise operations, ghost kitchens, and virtual brands. The 20-location count is based on total US sites, not just those in California.
Does the ADDE Act apply to small restaurants?
If your business operates fewer than 20 US locations under one brand, SB-68 does not currently apply to you. However, the FDA Food Code already expects food establishments to inform customers about major allergens, and state-level requirements are expanding. Small operators approaching the 20-location threshold should monitor their growth against the criteria, as the obligation applies from the point the threshold is met.
Does ADDE apply to takeout or delivery-only businesses?
Yes. Ghost kitchens, virtual brands, and delivery-only operations are in scope if they meet the 20-location threshold under a single brand name with at least one California site. The responsibility for allergen accuracy on third-party delivery platforms sits with the operator, not the platform.
What types of food businesses are covered by allergen laws?
At the federal level, packaged food manufacturers must declare the nine major allergens under FALCPA. At the state level, SB-68 extends allergen disclosure requirements to restaurant menus for qualifying multi-location operators. Businesses that only sell pre-packaged food with existing federal labeling, mobile food carts, and temporary setups such as festival booths are not covered by SB-68. For businesses that fall between clear categories, a legal opinion specific to the operation is recommended.
What happens if my business is covered by ADDE?
You must provide written, item-level allergen disclosure for the nine major allergens on every menu and customer-facing channel by July 1, 2026. Fines range from $500 to $2,500 per violation. For the full breakdown, see Restaurant Allergen Disclosure Requirements.
Related Posts
Restaurant Allergen Disclosure Requirements
The Ultimate Restaurant Compliance Checklist (US)