It usually goes something like this: while visiting a friend in Portland, you stopped by one of the city’s 50+ food cart pods the day it wasn’t raining and about midway through your $9 latin-roasted chicken with chimichurri and crispy potatoes so delicious you think it must have been prepared by a Peruvian god, it occurs to you: Hey! I make a mean [fill in the blank meal] that my friends insist is better than their grandma’s. My ultimate pastime is preparing that [fill in the blank meal] for my friends, family, coworkers, and neighbors. How can I also get in on this food truck business, follow my passion, and quit my [fill in 9-5 desk job]?
There’s a reason the food cart industry continues to grow at exponential rates in the U.S., and these days you don’t have to live in Portland to cash in on it. Socializing at food cart pods has become a popular pastime as consumers opt to pay less for the same quality food they’d get in a restaurant. For their part, food truck owners enjoy lower barriers to entry and less risk compared to opening brick-and-mortar restaurants. Mobile food trucks give owners the flexibility to test out different locations and clientele. And hey, what creative culinary entrepreneur isn’t enticed by the potential fame that can come with the venture?
Once you’ve put some thought into your food truck concept, crunched some numbers, and designed the menu, it’s time to think about preliminary legal issues to ensure a smooth entry into the food truck industry.
One of the first tasks is determining which type of business structure best suits the needs of your food truck business. The options range from sole proprietorships to partnerships and corporations. Because this determination is based on the number of investors, liability, financial requirements, and tax implications, it is crucial to obtain legal advice to weigh the options before registering with the state.
Licensing and Permitting
Next comes licensing and permitting. Your business model will determine what state and local vehicle licensing requirements apply. If you plan to drive your food truck across the state for festivals, for example, you might need to obtain commercial licenses for the vehicle and the drivers. If your food truck is destined for a two-year lease at a food cart pod, you might choose a cart that can be towed. Regardless of the concept, all food truck owners must obtain permits before frying up that first batch of empanadas. Some permits are the same ones restaurants must also obtain: health department certifications, food handler permits, alarm permits, and liquor licenses if alcohol will be served. Other permits are unique to food trucks. For example, many cities require permits to operate the food truck itself, and in some cities these can be difficult to obtain if the number of available permits is capped. If the food truck is mobile, zoning laws may prohibit operating the truck in certain areas of the city. And even in approved areas, a special parking permit might be required. And last (but not least), some cities don’t allow food to be prepared in the truck itself. Instead, food must be prepared at certified commissaries and then transported to the truck. Planning ahead for the licensing and permitting processes will save headaches down the road and prevent dreaded delays.
Brand identity is one of the most valuable assets of any food truck, and it’s crucial to legally protect it long before selling that first order of tacos. Trademarks identify you as the source of your unique goods—your food creations, promotional materials, etc. It might not sound like a big deal until you think about the value of McDonald’s brand identify chiefly protected by its trademarked name and logo. Registering trademarks takes time, and not every or logo or restaurant name is eligible to be registered. It’s important to consult an attorney with expertise in trademarks in the early stages of developing your brand.
With food truck growth outpacing restaurants in the food service industry, and annual revenues exceeding $2 billion, it’s an exciting time to pursue your passion and start your own food truck business. Making strategic decisions about your business model and structure, planning for licenses and permits, and protecting your unique brand with trademarks will ensure your food truck is a success the minute you turn on the “open” sign and share your culinary talent with hungry consumers.
Ready to speak with an Attorney about starting your food truck? Contact us or give us a call at 505.715.5700 today.