Joyce Smith, the Chapel Hill town clerk, said the only restrictions placed on street performers relate to where they set up.
"As long as they are in the public right of way and are not blocking pedestrians, then they have every right to be there," she said.
The public right of way includes sidewalks, alleys and any town-controlled property.
Smith added that if the performer chose to be in a place outside of the public right of way but on someone's private property, such as the doorway to a business, the person would need permission from a business manager or owner.
But many performers include a means for collecting donations from passers-by, such as an open instrument case or a coffee can, and this places them in a totally different category.
Smith said requests for contributions define performers as peddlers, and as such, several rules apply.
Peddlers are allowed to be in the public right of way just like performers, but the fact that they are asking for money means that, by law, there are things they cannot do.
"There are some conditions that peddlers must follow," Smith said. "They cannot obstruct another person's movements; they cannot be under the influence of drugs or alcohol, and they cannot solicit within 20 feet of an ATM machine."
Additionally, the Chapel Hill Code of Ordinances states that peddlers cannot solicit contributions within six feet of a bus stop. Any violation of these stipulations is a misdemeanor with a fine of $50 or imprisonment for up to a week, according to the code.