You’ve likely seen them on busy city streets or at the town fair. They’re also popular sitting outside breweries and concert venues. Schools often hire them for fundraising events. We’re talking food trucks, of course.
According to Food Truck Nation, food trucks brought in an estimated $2.7 billion in revenue in 2017, and this industry is not done growing. The road to success with a food truck business is one paved with growth and opportunity, as long as you know (and follow) the rules of the road.
Whether you’re adding a food truck to your existing brick-and-mortar restaurant or getting into the food business via a food truck, you need to get an understanding of how to legally start your food truck business.
Like all food businesses, food trucks are held to strict rules created to ensure the public’s health and safety. But it’s not the federal government laying down the laws. Retail food establishments such as restaurants and food trucks are regulated by state and local governments. These governments determine how, where and when food trucks may operate. Here’s what you need to know.
The First Few Steps
Just like any entrepreneurial endeavor, you need to decide on a name when you start a food truck business. If you haven’t selected your business’s legal structure yet, you can register your name by filing a DBA (short for “Doing Business As”) in the state or states where you’ll be conducting business. You’ll also need to get an Employer Identification Number (EIN), also known as a Federal Tax ID Number, from the IRS. This number is used to identify your business and allows you to hire employees.
Next, you can determine whether to incorporate, set up a limited liability company (LLC), or operate as a sole proprietorship or a partnership. Setting up as a corporation or LLC protects your personal assets in case of a lawsuit against your food truck. However, it also entails filing more paperwork, paying more fees, having regular meetings and other regulations. You can also start a food truck business as a sole proprietorship and then incorporate later on, but since you’re serving food products, which could possibly make people ill, it’s probably smarter to incorporate from the start.
Rules and Regulations to Start a Food Truck
In most states, cities or towns, there are many licenses and permits you’ll need when you start a food truck business. In fact, according to Food Truck Nation, starting and maintaining a food truck business for one year requires an entrepreneur to complete an average of 45 separate government-mandated procedures. Requirements vary from state to state and from city to city, so starting with your state’s licensing center is a good place to get information. Permits and licenses usually need to be reviewed and renewed on a set schedule, and your truck will be subject to inspections by a local health agency.
Visit your state government’s website to find information about registering your business and applying for licenses. You can do the research yourself or save time and have CorpNet do the work for you. To start a food truck business, you’ll need to know:
- Which licenses are required at the state level?
- Which licenses are required at the county level?
- Which licenses and registrations are required at the city level?
- What is the process and the costs associated with obtaining any required licenses?
Because food trucks are growing in popularity, most states have created guidelines and checklists you can find online about how to operate a “mobile food vending” business in your state. Some of the specific licenses and permits you need may include:
- Mobile Food Vendor License
- Mobile Food Vending Unit Permit
- Completion of the food protection course exam for mobile food vendors
- Certificate of Sales Tax Authority
- Seller’s Permit
- Food Handler’s Permit
- Health Department Permit
- Fire Certificates
Like restaurants, your food truck will be regularly inspected by the county health department to make sure you are following regulations related to cleanliness, health and safety, such as having separate sinks for handwashing and food prep, a wastewater tank, adequate ventilation and more. The fire department looks at your onboard cooking equipment and fire suppression system. If you have a commercial kitchen you use to prepare and store food, you’ll also need to have that facility inspected. In fact, in California all mobile food vendors must rent space from a food facility, known as a commissary, to prepare food, store inventory, and park their vehicles when not in use.
Your food truck itself will need to be registered with your state’s motor vehicle department, and all drivers will most likely need to have a special driver’s license to operate a commercial vehicle.
As far as where and when you can operate your food truck, many cities limit the areas of the city in which you can conduct business. You may also find restrictions on how long your truck can remain in one spot. Most cities also have restrictions on how close you can park to a school or brick-and-mortar restaurant. For example, the city of Minneapolis does not allow food trucks to be within 100 feet of a traditional restaurant, 300 feet of a residential building, or 500 of from a festival or sports event. Portland, Oregon, on the other hand, only has a proximity restriction in the city center. If you want to know which cities are friendliest to food truck businesses, check out the Food Truck Nation and U.S. Chamber of Commerce’s latest Food Truck Index survey.
Staffing Your Food Truck
Finally, because it’s pretty much impossible for you to run the business, take orders, cook the food and provide friendly customer service all at the same time, you’ll need to hire help. Most likely, part-time help will be sufficient—most states define part-time workers as those who work less than 35 hours per week. Part-time workers are typically paid an hourly wage and are protected under the Fair Labor Standards Act and OSHA’s safety and health policies.
As the employer, you’ll also need to verify each new employee is legally eligible to work in the United States. Have the employees you hire fill out Form I-9, Employment Eligibility Verification, in addition to a W-4 for tax withholding.
Food for Thought
There’s a lot to consider when starting a food truck business. To keep up on new trends and regulations, it’s a good idea to join a mobile food vending association or group, like the National Food Truck Association or similar local association. Not only will you stay abreast of food industry news, but you can also make sure your voice is heard on new ordinances and issues important to your industry.