Who Must Comply with FSMA 204?

Any business that manufactures, processes, packs, or holds foods on the Food Traceability List (FTL) with annual food sales exceeding $250,000 must comply with FSMA 204 by July 20, 2028. This includes farms, processors, distributors, warehouses, restaurants, and retailers. Each establishment is evaluated independently against the revenue threshold -- not aggregated across a chain or franchise (Source: 21 CFR Part 1, Subpart S).

What are the compliance tiers?

The rule creates three distinct tiers based on average annual food sales, calculated as a 3-year rolling average and inflation-adjusted to 2020 dollars:

| Annual Food Sales | Compliance Status | What It Means | |------------------|-------------------|---------------| | $250,000 or less | Fully exempt | No FSMA 204 obligations | | $250,001 -- $1,000,000 | Modified compliance | Must maintain traceability records, but exempt from electronic sortable spreadsheet requirement | | Over $1,000,000 | Full compliance | Must maintain all records AND provide them in electronic sortable spreadsheet format upon FDA request |

Key details about the threshold:

• Based on all food sold, not just FTL foods
• Uses a 3-year rolling average of annual sales
• Inflation-adjusted based on 2020 dollars
• Evaluated per establishment, not per company or chain

What does $250,000 in food sales look like?

A restaurant doing approximately $685/day in food sales crosses the $250,000 annual threshold. This captures the vast majority of commercial restaurant operations. Only very small or part-time food establishments will qualify for the full exemption.

For context, the median full-service restaurant in the United States generates well above $250,000 in annual food sales.

How does per-establishment evaluation work?

The $250,000 threshold applies to each individual establishment, not to the company overall (Source: 21 CFR Part 1, Subpart S).

This means:

• A franchise with 20 locations evaluates each location separately
• A small location doing $200,000 in food sales is exempt even if the franchise collectively does $4 million
• A food truck doing under $250,000 is exempt even if the owner operates a covered restaurant
• A corporate chain's headquarters is evaluated separately from its individual stores

This per-establishment approach benefits small independent locations that might be part of a larger brand.

What types of entities must comply?

The rule covers a broad range of food businesses:

| Entity Type | Primary CTEs | Typical Burden | |-------------|-------------|----------------| | Farms growing FTL produce or raising FTL aquaculture | Harvesting | Record harvest details, pass data downstream | | Coolers reducing temperature of raw commodities before packing | Cooling | Record cooling activity and temperatures | | Packers initially packing raw agricultural commodities | Initial Packing | Assign first Traceability Lot Code (TLC) | | First land-based receivers of seafood from fishing vessels | First Land-Based Receiver | Assign first TLC for seafood | | Shippers arranging transport of FTL foods | Shipping | Record shipment details, pass TLC data forward | | Distributors and warehouses handling FTL foods | Receiving, Shipping | Record receipt and shipment of FTL foods | | Processors and manufacturers transforming FTL foods | Receiving, Transformation, Shipping | Link input TLCs to output TLCs, assign new TLCs | | Restaurants receiving FTL foods | Receiving only | Record 8 data points per FTL delivery | | Retail food establishments receiving FTL foods | Receiving only | Record 8 data points per FTL delivery | | Foreign firms producing FTL foods for U.S. consumption | Varies by activity | Same requirements as domestic counterparts |

What about restaurants specifically?

Restaurants have the lightest compliance burden of any covered entity. Their only Critical Tracking Event is Receiving -- recording data when FTL foods are delivered (Source: 21 CFR 1.1345).

Restaurants do not need to:

• Assign Traceability Lot Codes
• Track transformation (cooking food for direct consumer sale)
• Maintain shipping records (for direct consumer service)
• Track harvesting, cooling, or initial packing

Exception for commissaries: A restaurant commissary or central kitchen that transforms food and ships it to satellite locations is treated as a food processor and must track Receiving, Transformation, and Shipping CTEs (Source: 21 CFR 1.1350).

What if I'm not sure whether the rule applies to me?

Ask these three questions:

1. Do you handle any foods on the Food Traceability List? If no, you are not covered regardless of revenue.
2. Do your annual food sales exceed $250,000 (3-year rolling average)? If no, you are fully exempt.
3. What do you do with FTL foods? Your role (receiver, shipper, transformer, etc.) determines which CTEs apply to you.

If you answered yes to both 1 and 2, the rule applies. Your specific obligations depend on your role in the supply chain.