Five Things to Consider When Launching a Food Truck Business

Few pursuits are more enticing than the hospitality industry, especially the food business. Whether it is a stepping stone to eventually owning a restaurant, or a long-term business idea, the Food Truck Business has a lot to offer to aspiring entrepreneurs of all backgrounds. However, before you embark on this potentially exciting commercial venture, keep the following considerations in mind, as failing to do so may stop your Food Truck Business in its tracks.

Financing Your Food Truck BusinessAmong the many appeals of having a food truck is that they require far less capital than the average restaurant. Indeed, it is not uncommon for entrepreneurs to tap into their own savings to get the business started. However, if you lack the necessary funds or do not want to risk your own hard-earned money, you will need to seek out alternative sources of capital, such as investors, credit cards, or bank loans. Getting these external funds will require a lot of preparation, research, and/or paperwork. In particular, you should draw up a detailed and attractive business proposal that will show the viability and potential of your business idea.

Choosing the Right Business EntityEvery legitimate business needs a business structure, of which there are many to choose from – a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each has its pros and cons depending on what you have in mind for your business or what your priorities are (such as saving money on income taxes or protecting your personal assets from business-related liabilities). The two most common and preferred options are LLCs and corporations, namely for their liability protection. An LLC also provides tax savings, while a corporation is a good way to raise well-needed funds to grow your business. However, the choice should depend on what is best for your goals and needs as informed by a qualified business attorney.

Obtain A Food Truck VehicleObviously this will be the foundational asset of your business, and probably the most expensive investment. The popularity of the food truck industry in recent years means you will have a lot of different models and sizes to choose from, with prices ranging from $5,000 to as high as $60,000. Even eBay and Craigslist are known to list food trucks for sale, and you can also seek out existing food truck owners to negotiate for a purchase (which would save a lot of money in having to refurbish a new vehicle). As with any commercial purchase, you will need to exercise due diligenceand carefully review and/or negotiate a purchase contract, in addition to getting the appropriate driver’s license for the vehicle.

Food Truck Business RegulationsUnless you plan on only selling prepackaged food, you will need to comply with all the stringent and myriad regulations of any restaurant to ensure food safety and hygiene. That means the food truck must have storage and refrigeration capabilities, cleaning utensils and equipment, a safe liquid waste disposal system, a separate sink for hand washing, a potable water supply, and a source of power. If the food truck lacks all these amenities, then you must have a physical site lined up where all these features are available. Food service workers are also subject to strict regulations, requiring special training and licensing to handle food. If your food truck business has more than four employees, you will be required to have a food manager certified in food handling and preparation to always be on site while the business is operating.

Food Truck Business LicensesEvery business must be licensed to operate legally, with the minimum requirement being a Certificate of Use issued by the local government, which must be renewed annually. The application must include all the relevant information about your business, from hours of operation to a copy of the food service license granted by the State of Florida. Additionally, food trucks must consider several licenses unique to their needs, such as a special event permit – which allows you to operate on private property twice a year for two weeks each time, and on public property 10 times a year for two weeks each time – or a vacant land permit, which allows you to park your food truck on vacant lots for up to six months (and must be renewed every six months for up to two years). There is also a “peddler’s license” that is best for food trucks that are always mobile and stop only to serve clients (not unlike an ice cream truck). Choosing which licenses you will need will vary on what you have in mind for your business and whether you have a location secured.

Hire the Food Truck Business ExpertsAll these choices and more can be done with the guidance and knowledge of the business attorneys at Jurado & Farshchian, P.L. Get in touch by calling 305-921-0440 or emailing me directly at [email protected] to learn how we can help launch your business.