The U.S. Food and Drug Administration (FDA) released its final rules for menu labeling on November 25, 2014. The long-awaited rules stem from provisions in the Affordable Care Act (ACA), the comprehensive health care reform law of 2010, and come more than three years after the proposed rules were issued in April 2011.
New Requirements for Restaurant and Retail Menus
The Rule entitled, Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments, would require restaurants and similar retail food establishments with 20 or more locations under the same name, and having substantially similar offerings, to post calorie amounts for each standard menu item. The posting must be made on menus or menu boards, which could include electronic and online versions. More detailed, written nutrition information must be made available to consumers upon request. Establishments covered by the rule include quick service and table service restaurants; grocery stores and superstores; foodservice operations at entertainment venues (i.e. movie theaters); foodservice vendors such as ice cream shops; and food takeout and delivery establishments such as pizza facilities.
A covered establishment must have a reasonable basis for its nutrient content declarations and take reasonable steps to ensure that the method of preparation and amount of a standard menu item adheres to the factors on which nutrient values were determined. Upon FDA's request, covered establishments must provide information to FDA substantiating the nutrient values, including the method and data used to derive the nutrient values.
The law specifies that state or local governments cannot have nutrition labeling requirements for foods sold in establishments covered by the final rule, unless such requirements are identical to the federal requirements. Restaurants and similar retail food establishments that are not covered under the federal requirements would remain subject to applicable state or local menu labeling requirements, unless they choose to voluntarily register with FDA to comply with the federal menu labeling requirements. Both the effective and compliance dates for this rule are December 1, 2015.
Changes in the Final Rules and Proposed Legislation
In the final rules, FDA took much broader latitude in the types of food items and establishments that will be covered. For instance, the proposed rules would have exempted alcohol. However, FDA suggests in the final rule that alcohol will indeed be covered, largely due to the overwhelming number of comments the agency received suggesting that it be covered and the fact that alcohol constitutes a substantial portion of average total calories consumed by Americans. In addition, the final rules include grocery stores and foodservice operations at entertainment venues, the applicability to which was questioned in advance of the release of the final rules.
On the latter point, legislation has been introduced that would exempt certain retail food establishments from such menu labeling. Senator Roy Blunt (R-MO) and Representative Cathy McMorris Rodgers (R-WA) have sponsored companion legislation — the Common Sense Nutrition Disclosure Act — which would "improve and clarify" menu labeling requirements. The bill would allow for remote-access disclosure for establishments where most orders are placed off-premises, such as pizza facilities accepting orders online, and would narrow the scope of covered establishments to those deriving more than 50 percent of their total revenue from the sale of ready-to-eat food, thereby providing relief for grocery and convenience stores. The legislation has yet to receive a hearing or floor consideration, though we may see an increased push for its passage in 2015 when the 114th Congress convenes.
The rules were published in the Federal Register on December 1, 2014. The 30-day comment period will end on December 31, 2014.
Next Steps for Franchisors
Franchisors will want to prepare for enforcement of the new menu labeling rules by making sure they receive accurate and updated nutritional information from those in their supply chain, whether those suppliers are distributing menu items or ingredients to company-owned operations or to franchisees. Even though the franchise agreement may provide that the franchisee is solely responsible for complying with all applicable laws, franchisors may be liable for their franchisees' non-compliance. As a result, you should alert your franchisees to the new requirements, advise them on how they can ensure that their menus and menu boards are compliant, and emphasize to them the importance of training employees to precisely follow recipes and preparation instructions — otherwise the calorie information on the menu may be inaccurate and potentially misleading. If you have not already done so, you should prepare menu labeling compliance policies and information, including mechanisms to periodically review compliance and implement corrective actions when required.