Literally, it means homemade. In reality, it means nothing.
This was on a TV show last night. Apparently, the only rule is that the restaurant has to do something to a dish before serving it. The example was a souris d'agneau (lamb shank). It was precooked, packaged, and frozen with gravy at an industrial food factory.
The narrator/chef put the package in a microwave to heat it. Then he plated it with rice and a garnish of parsley. He sprinkled a little salt on and called for a waiter to serve it. In fact, he said he could legally call it "fait maison" just by sprinkling on the salt.That's depressing.
Contrast this with the strict legal definition of "boulanger" or "boulangerie." French law defines a boulanger as one who chooses their ingredients, kneads the dough (presumably using a machine is ok), controls the rest of the process, and does the baking on site. No stage (French word "stade" in the law) of production may be frozen.
I haven't found the history of this 1998 law. Maybe the artisan bakers wanted to protect their turf from chain bakeries and supermarkets, which can only call themselves "dépots de pain." Or maybe the chains wanted to make it too expensive for small bakeries to compete.
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