Mauro Viale is the man behind the proposal, having started the business in 2009 in Queenstown.
When the council called for public submissions on the proposal, 61 were received by the closing date of March 15, of which 57 were in support.
But despite that support, the only submitters who attended a hearing conducted by councillors Jude Battson and Lex Perkins on March 27 were against the proposal - including former Queenstown Lakes mayor Warren Cooper.
Mr Cooper argued granting the lease to the Empanada Kitchen would set a precedent.
Mr Viale acknowledged the concern people have for the toilets having a food outlet attached, but said it was no different from a restaurant having its kitchen near its toilets.
''Many people are concerned about the toilet ... [but] I'm closed from the toilets and facing away from them.''
''If you see in Wellington and other places there's a lot of toilet shops ... people don't know the whole thing and I understand that.''
The food will be prepared off-site in a commercial kitchen, as the kiosk size is 3sq m.
The toilets are due to be finished in time for the Winter Festival, which runs from June 21 to 30, but Mr Viale's lease for the kiosk does not start until September.
He has spent years gauging the tastebuds of Queenstown locals - as they are different from the tourists' - and said his use of ingredients such as truffles would give everyday people access to gourmet food.
His family was Italian, but he grew up in South America and his main focus was to ''offer something different''. The large amount of paperwork involved with an expanding business was hard work, to say the least, Mr Viale said. Many Queenstowners would know his food from the local markets.
''I try to use local produce ... it's better to work together.''
His kiosk would not be selling coffee and this, he said, was to stop negative competition.
''I don't see the point of having more coffee ... everyone has coffee, I have so much caffeine ... and there's no point competing.''
Some submitters had concerns the area already had too many eating places but Mr Viale responded by maintaining he and other food outlets would be working harmoniously because ''at the end of the day we are all going to go down if we compete''.
