Linn County Public Health, state of Iowa see increase in unlicensed delivery, residential restaurants

CEDAR RAPIDS — Most diners take for granted that the restaurants they eat from are legally licensed, approved by the local health department and safe to eat at.

But an emerging trend indicates that's not always the case for those looking to order a bite for delivery — in Linn County and across Iowa.

In recent years, local public health officials have noticed an uptick in delivery-focused restaurants selling food on apps like DoorDash without proper licensure or inspections.

Some of them were quite popular in Cedar Rapids before they were shut down.

“Nobody’s aware that this is even possible,” said Dustin Hinrichs, environmental quality branch supervisor for Linn County Public Health (LCPH). “People just trust that the system is safe.”

Where is this happening?

In the last two to three years, LCPH has seen more unlicensed or improperly licensed restaurants attempting to sell their food. This happens more often at residential locations, but can happen at commercial locations, too.

  Buy Photo

These restaurants primarily use models like cloud kitchens, which rely on delivery through third-party apps like DoorDash and Uber Eats, rather than traditional dine in and carryout sales.

In that time, Hinrichs said he has dealt with the problem at about 20 restaurants in Linn County, and several more in Jones County, where LCPH is contracted for services.

There are many more reports of it happening, he said. But with a team of six full-time restaurant inspectors handling enforcement for roughly 1,700 licensed establishments, resources are spread thin.

“Largely, we rely on complaints. We just don’t have the personnel,” Hinrichs said. “It would take a couple (full-time employees) pursuing those to figure out if (reports are) legitimate.”

It’s not just happening in the Corridor, either. The Department of Inspections, Appeals and Licensing (DIAL) said the number of complaints about unlicensed facilities is up about 20 percent this year. Those complaints include food trucks, farmers market vendors, establishments that open without obtaining a food license, or people selling foods made from home that don’t qualify for “cottage food” exemptions.

Notable examples

One notable example where a restaurant was not properly licensed in Cedar Rapids was Lost Cuban.

The popular Cuban restaurant, using family recipes from owner Jess Streit, was previously licensed as a full-service restaurant in downtown Cedar Rapids from 2012 to 2019.

It reopened for a short-lived stint as a delivery-only restaurant on DoorDash in April 2024. Serving Cuban sandwiches, it operated out of the Third Street Bodega without proper restaurant license and inspection until earlier this year.

Hinrichs said they operated out of a space resembling a closet while ignoring repeated messages, calls and in-person attempts to help them come into compliance for requirements like ventilation.

“Personally, I loved their food,” Hinrichs said. “They knew the rules.”

Hinrichs was forced to take legal action. LCPH went to court to obtain an injunction that would allow law enforcement to shut them down.

By the time they completed the process, The Lost Cuban had gone out of business. Streit could not be reached by phone and did not respond to social media messages or text messages requesting comment for this article.

Birria King, another popular cloud kitchen concept several years ago, also got its start without proper clearance as birria tacos were trending.

A balancing act of enforcement

Resources aside, enforcement can be a balancing act for LCPH.

While county public health departments have the authority to shut down restaurants flouting laws and regulations, its something Hinrichs said they use as a last resort for matters of personal safety and practicality. For many restaurant owners, the business at stake is an investment of personal and financial significance, often amounting to tens of thousands of dollars.

“I’ve had people reach for guns before. I’ve had people sling at me in the office and in the field,” he said. “It’s people’s life savings, they’re willing to do anything to keep it afloat.”

That’s something Hinrichs understands on a human level. He grew up in the restaurant industry, where his father’s businesses failed multiple times.

Education of what can be a complicated process is the first line of defense the agency deploys to help restaurateurs understand what is required.

“State and local food safety regulatory agencies may work with city and county attorney offices to take action against an unlicensed food operation, however, most situations are resolved by educating business owners about what they can and can’t do without a license,” said Stefanie Bond, communications director for the Iowa Department of Inspections, Appeals and Licensing.

When education fails to compel unlicensed restaurant owners, Hinrichs leverages relationships with other city and county departments to help sanction businesses that refuse to comply. That could mean denying liquor licenses or declining to grant building permits for renovations.

  Buy Photo

What do delivery apps allow?

DoorDash says it does not allow unlicensed restaurants to operate on its platform, and requires all businesses to comply with local, state and federal regulations.

The third-party delivery app requires merchants “to meet certain eligibility requirements,” like having a business license, and collects basic information like a restaurant’s Tax ID number. The platform’s terms of service also bar its restaurants from operating in residential locations.

But Hinrichs and restaurant owners told The Gazette that the platform doesn’t require them to provide proof of compliance with local health codes or certification in food safety training, as required in Iowa.

  Buy Photo

A DoorDash representative declined to specify whether proof of health code compliance is collected from its merchants.

DoorDash said it investigates any reports of unlicensed restaurants and removes them from the platform, if proven or unable to verify. Hinrichs said he has had difficulty getting delivery platforms to follow through on that.

“They just keep moving you to different (employees.) As soon as you start getting anywhere, they move you to someone new,” he said.

Uber Eats declined to answer questions on what verifications or forms of proof they require from restaurants using their platform.

“All restaurants, including those operating at ‘ghost,’ ‘cloud,’ or ‘virtual’ kitchens, are required to comply with all relevant licensing and food safety regulations,” Alex Finke, an Uber public policy representative, said in a statement.

Is selling food from home allowed?

Making food and selling it from home is legal in Iowa, under the right circumstances.

Cottage food laws permit shelf stable foods that don’t require temperature control, such as baked goods, to be made and sold from homes.

You can also make and sell temperature-controlled food, like casseroles and meat products, from home with a Home Food Processing Establishment (HFPE) license.

There are 59 HFPE licensees in Linn County, some of which sell popular commodities like burgers, pizzas and sandwiches.

State law prohibits an HFPE licensee from operating on-site dining, but does not bar them from operating food delivery businesses from home.

Regulations like equipment, training and fire code requirements for that license pale in comparison to what a traditional restaurant has to go through, Hinrichs said.

What does it take to legally open a restaurant?

Outside the home, opening a restaurant is expensive and tedious. Food license applicants have to submit floor plans of equipment layout, pass food safety training, and pass a pre-opening inspection.

“But for good reason,” Hinrichs explains. “We see outbreaks around the world all the time because people have no idea what they’re doing in the kitchen.”

Recommended Reading

Curious Iowa: How often are restaurant inspections conducted?

Requirements for traditional restaurants protect infrastructure the home cook doesn’t have to think about. Grease trap requirements, for example, protect sewers and water systems from improper disposal can lead to backups and flash flooding, in extreme circumstances.

Nonprofits like NewBo City Market help new restaurant owners navigate the process and mitigate the costs. Over the last two and a half years, the small business incubator has worked with about 20 restaurants and food businesses, including the introduction of seven new ones.

  Buy Photo

The model has helped former vendors like CR Midnight Smoker BBQ, The Hangry Lady and Anh’s Bread Therapy graduate to their own brick-and-mortar establishments around the city.

“There’s a huge demand for restaurants to open in Cedar Rapids,” said Matt McGrane, director of equitable business development for NewBo City Market. “I get why it would be tempting to open a restaurant from your home.”

It can take several months to formulate a business plan and help businesses navigate health regulations. By working closely with each vendor, the institution gains and passes on knowledge to subsequent vendors.

For example, gas appliances need to be chained to the wall to prevent a line from breaking if pulled too far. A divider needs to be in place between deep fryers and cooktops to prevent grease spatters from igniting flames.

The cost of equipment is one of the largest barriers to new restaurateurs. McGrane said the average equipment cost for a startup can run $30,000 or more.

NewBo City Market provides resources like grant access, a communal dish room and a limited number of ventilation hoods to help ease the pain. The limited number of ventilation hoods is a bottleneck for vendors waiting to get in.

In return, vendors are held to higher standards than the law requires. Each one is required to have food protection manager certifications, take out the trash and clean dirty dishes before closing each night.

“Because we’re in a shared space, one person’s actions in their stall can impact other restaurants adjacent,” McGrane said. “We have a reputation to uphold.”

Even with these resources, owning a restaurant is a significant commitment. But when done properly, NewBo City Market’s model helps make the dream accessible to more in an industry with difficult odds.

“They dream of doing something they get joy from. They want to earn a living doing this, but they want to share it with the world,” McGrane said. “It’s almost a calling they have.”

Comments: Features reporter Elijah Decious can be reached at (319) 398-8340 or elijah.decious@thegazette.com.

Get the latest restaurant news, food reviews and insider tips from the Chew on This newsletter.