A drive to bar franchises from Nevada City's historic downtown district has pitted business against business in a tug-of-war between commerce and community.

In this Nevada County hamlet of 3,000 – known for its Gold Rush history, picturesque vistas and progressive ethos – franchises are seen by some as a corporate threat to the town's independent businesses and the history that has defined downtown.

The entire downtown district is listed in the National Register of Historic Places and is dotted with California historical landmarks. They include the Nevada Theater, which once hosted Mark Twain, and the National Hotel, one of the oldest continuously operating hotels west of the Rocky Mountains.

"A franchise in a historical town? People come to Nevada City to get away from franchises," said Eric Engstrom, owner of Dos Bandidos restaurant in downtown Nevada City, who launched the petition effort. "I'm standing up for the beliefs about historic towns. What next? Starbucks?"

Engstrom will present the petition at Wednesday's City Council meeting.

There's no ordinance barring franchises inside the town's downtown historical district, said Nevada City planner Cindy Siegfried. But franchises including convenience stores, gas stations and a Port of Subs sandwich shop operate outside of downtown.

The franchise that offends Engstrom? Roseville-based Beach Hut Deli. With 20 locations stretching from Chico to Stockton to Reno, the chain of sandwich shops is a small fry in a sea of franchise giants like Subway and Quiznos.

Still, Engstrom sees the sandwich franchise, set to open downtown Sept. 1 at Broad Street and Union Alley, as the first of many.

"This city was built 159 years ago. It was built on mom-and-pops," he said.

That's how franchise owners Cindy and Steve Smith see themselves. The couple have lived in neighboring Grass Valley for more than 40 years. Steve Smith is a firefighter in Grass Valley, and both say they love Nevada City and the building at the bottom of Broad Street that will house their new shop.

Cindy Smith said she didn't expect the backlash she's received so close to the shop's planned Sept. 1 launch.

"We heard about it … and we were shocked and disappointed," she said. "We're not doing anything wrong. We've followed all of the historical guidelines."

She said she and her husband are using brick from original downtown buildings to fashion their new location and will employ local residents behind the counter.

"We have a lot of money into it," she said. "We didn't go in thinking we were doing something wrong."

She won't say how much money they've spent, though a Beach Hut franchise fee is $24,000.

Troy Feist, Beach Hut Deli's founder, opened the first location in his hometown of Roseville in 1981 at age 19. He emphasizes his area roots, how he graduated from Roseville's Oakmont High School, attended Sierra College in nearby Rocklin and graduated from California State University, Sacramento.

He said he was surprised by the petition campaign.

"We will be reflective of what Nevada City wants it to be. We're not a fast food chain," Feist said. But he said he understands how sensitive the word "franchise" can be.

"It's one of those red flag words, but we're not here to cannibalize the market," he said.

That's a fundamental difference that both separates and links the small franchisee and the independent businessperson, said Greg Roquet, a Davis-based business broker and franchise expert.

Roquet said small towns want to retain their charm and protect their businesses, but he believes those who frown on franchises are missing the point.

"They're independently owned," Roquet said. "Someone has their life savings involved in the business. They need to understand that they're local businesses and independent businesspeople."

In California, more than 97,000 franchise establishments employ nearly 1.2 million people, with another 1 million jobs tied to franchising, according to the International Franchise Association, a Washington, D.C.-based trade group. It pegs the state's franchise payroll at $34 billion, according to 2005 data, the latest available.

But California cities and towns are also striving to balance commerce with small-town charm through building codes and other regulations.

In Nevada City, the guidelines are exacting. Buildings and signage in the historic downtown district must comply with its distinct "Mother Lode-style" architecture, the brick-and-wood design of the 1840s through 1900.

From the color scheme to wood used for the signs to advertising logos, accurate historic detail is everything. All are reviewed by the town's Planning Commission and compared with the type of signage that prevailed in the town between 1849 and 1890.

Even with strict planning and aesthetic guidelines, calls to ban franchises aren't uncommon in smaller communities, said Dennis Tootelian, director of the Center for Small Business at Sacramento State and a sometime consultant to franchise giant McDonald's.

"There's a great fear of franchises coming in. It's very common," Tootelian said. "The thought is that they will destroy the social landscape. There's certainly a concern by small business, (but) if it's something the community doesn't want, they don't have to patronize it. They can vote with their dollars."

Call The Bee's Darrell Smith, (916) 321-1040.