I googled the Colorado law you mentioned [1]. It wouldn't apply for the use case mentioned by the OP. It seems to be restricted to food "products", like baked goods or pickles. It has a lot of other restrictions that would make it incompatible with the OP's service.

I agree about the catering thing, but it doesn't seem like that's the core of their idea.

[1] http://forrager.com/law/colorado/

Interesting; I never bothered to know the specifics. I know of some people violating these laws, but they are rather small (so, likely to remain under the radar). My understanding is that there are commercial-grade kitchens one can rent, but rates are cost prohibitive for truly small operations.