The French government waited for the eve of Bastille day to announce measures intended to improve the state of their restaurant scene. But the law, which was designed to promote fresh food in French kitchens, is causing a revolt among chefs. From 15 July, every restaurant in France will have to make clear whether it cooks its food from scratch, rather than serving food prepared industrially off-site. After all, who wants to sit on a bistro terrace, charging bistro prices, to be served onion soup out of a packet? But according to chefs, the "fait maison" (homemade) law falls far short of its goals.

It might be surprising that a country whose cuisine has World Heritage status needs such a law. And yes, there are plenty of restaurants across France serving delicious freshly cooked food. But midrange restaurants in particular have faced criticism for using factory-made shortcuts in the kitchen. A survey carried out by French catering union Synhorcat suggested 31% of restaurants (not including cafeterias, bars and fast food outlets) used industrially prepared foods

Others claim the proportion is much higher – Xavier Denamur, restaurateur and fresh-food campaigner and filmmaker, carried out his own personal survey, which took him to dozens of restaurants throughout France. He believes closer to three quarters of restaurants relied on industrially produced food.

Last month, UK-based French chef Michel Roux (senior) blamed this decline on France's 35-hour working week and the high employment costs. "France is in danger of losing its proud food culture and traditions, not to mention its gastronomic supremacy," he said. "In contrast, the food in Britain has improved so much and the standard is largely excellent. It is the reverse of what has occurred in France." Nicholas Farrell also blamed the working time rules when he recently called French food a "national disgrace".

Many in the industry say the 35-hour week has had an impact on the quality of the restaurant experience. (Ever felt rushed out at the end of a late evening meal?) But it's not quite as simple as being restricted to a seven-hour day; the hospitality industry has allowances for longer days, within certain rules, and plenty of chefs put the time in. Gregory Marchand of Frenchies in Paris says: "You get career chefs who work long hours and want to learn, and people who are just doing this as a job." Australian chef Shaun Kelly, speaking during a break in his 15-hour day at Paris restaurant Yard, says: "I have yet to meet a chef working seven-hour days."

But many agree with Roux that high employment costs are crushing. Michelin-starred chef Alain Dutournier says things are going well at the high end of the market, but not for mid-range restaurants: "The deterioration began in the 1990s with the rise of national insurance costs and the cost of employment," he says.

Cheap bought-in goods cut preparation time and the need for costly kitchen staff and it's easy to find places adopting this model, according to British chef Michael Greenwold, of Roseval and the Sunken Chip in Paris. He looked at around 25 spaces when choosing premises for his restaurant. "Everywhere you went you could see that they were buying in ready-made stock, sauces and so on."

And Dutournier tells of a recent trip to the coast, near Marseille: "We found it very hard to find a restaurant that would serve us fresh fish. It is terrible." Kelly says he was surprised by the reality of French food. "I don't want to use the word disappointed," he says. "But as a chef, you hear about France all your life. And it wasn't quite what I expected."

The new law is meant to tackle this by promoting establishments that do cook from scratch. Carole Delga, secretary of state, said the fait maison logo would "allow all, at a glance, to distinguish food that has been assembled from industrially prepared elements from cuisine created from raw produce".

All restaurants must now put the following key phrase on their menus: "Les plats 'fait maison' sont élaborés sur place à partir de produits bruts," ("'Homemade dishes' are made on site from raw produce.") Restaurants that make everything from scratch must then display the words fait maison or the logo somewhere visible, and those that have a mix must put it next to each cooked-from-scratch dish. Those that buy everything in, and so have no fait maison dishes, still have to put the key phrase on menus to "remind their customers of the rule".

It's confusing, but the idea is to promote real cooking. To add to the mayhem, there has been debate over what constitutes brut or raw produce. Under the law, to qualify as fait maison, ingredients must not have undergone significant "modification" – so no heating or marinating. But, for example, they can be frozen, industrially peeled (except for potatoes – fast food places shouldn't be calling frozen chips homemade), chopped, sliced, or shaped, and industrially made sauce bases are fine too – as long as it's noted on the menu.

Denamur has made a number of documentaries on the state of French food and arguably kickstarted the fait maison idea, but he is bitterly disappointed and is calling on chefs to ignore the law. "I chop all my steak tartare to order, but someone who buys it in, vacuum packed in a controlled atmosphere, where it might have come from 10 different cows, can call theirs fait maison too. It's ridiculous.

"We could have set an example for Europe, but instead we have this catch-all where the government is trying to go some way to please the consumer, some way to please the restaurant industry and some way to appease the industrials," Denamur says. "If you can't make the base for a sauce, don't make one. Don't use an industrial one – that's not real cooking, it's not fait maison."

Dutournier, too, says the law falls short. He and fellow high profile chefs Alain Ducasse and Joel Robuchon have set up a quality mark scheme where restaurants meeting certain criteria, including cooking from scratch, can display the Restaurant de Qualité sign. Around 800 restaurants have signed up. And union Synhorcat is calling for a legally protected "appellation" under which only establishments cooking from scratch on site could call themselves restaurants. A similar law, in place since 1998, means the title boulangerie (bakery) is reserved for places that bake bread on site; other bread outlets must use the term depot de pain.

Of course, plenty argue that French food is thriving. "There is an astonishing patchwork across the regions, with different produce and flavours," says Dutournier. And James Henry, Australian chef and the only non-French partner at Parisian restaurant Bones, argues that it's as good as ever. "I'd like to go to this fantasy place where you can just walk into any restaurant and find fantastic food, but I'm not convinced it exists," he says. "I go to restaurants quite often and I eat very well at a fair price."

Finding good food in France may still be easy if you know where to look, but, says Marchand: "You'd be naive to think you could just walk in off the street and find somewhere amazing every time." And the fait maison law is unlikely to help much.

• French food industry's new 'homemade' logo cooks up confusion