THE BLOG
08/27/2012 12:23 pm ET | Updated Oct 24, 2012

How Should One Think About the Costs and Benefits of Opening a Food Truck?

This question originally appeared on Quora.
2012-08-25-jluster.jpeg
By Jonas M Luster, http://jluster.org/

Oooh, this one's a hornet's nest. I'll try to answer as best I can; be advised, though, that mobile food service rules are different even within cities, and I can't possibly cover all angles.

Insurances and Permits - depending on your city, it will be prohibitively expensive or rather cheap to get a business license for your MFS (Mobile Food Service) operation. Many cities have additional fees for non-local food prep areas and require harsher inspections. That's with a caveat, see below. In addition to that, you'll need insurance for your MFS and, without trying to shill anyone, at least for the Midwest and Southern part of the United States, I have found Progressive to have the best rates. Once that is done, you'll also need to insure your truck against vandalism, theft, and yourself against professional claims such as food poisoning or if someone stabs themselves on your silverware or slips on some water dripping from your A/C. Finally, in some states (CA, Delaware, Texas, NY that I am aware of) you also need to file for permits with your local State Dept. of Agriculture.

Other People to Speak To - your local OSHA office has a big bag of signs and permits you need to have visible in the truck, even if you work alone. In addition, if you are frying foods in the truck you have to file for a "combustibles and explosives" permit in some cities.

All the above can be quickly run through by calling OSHA, your local Chamber of Commerce, the city's business permits department, your insurance, and the USDA.

Your Truck - good used trucks start at $70,000, new they start at $130,000 if you're not picky and take one off the rack. Armenco (http://www.cateringtruck.com/use...) sells the most used ones in California, they also have a new truck department. You can also talk to "Big Tony" (no, I am not making this up) at http://usedlunchtrucks.com for some further options.

Be careful, here. This new wave of selling mediocre food but making it look classy because hipsters love food trucks is new. Before that were years, decades, of a rather seedy industry rife with leg breaking, van torching, family-threatening, paid off inspectors (yes, even in SF, ESPECIALLY in SF), bribed law enforcement, and more. That permeates all the way into the truck sale market - don't sign anything, get your credit from a reputable bank, and buy the truck with no strings attached.

Your Equipment - you need some equipment that isn't commonly found in stationary kitchens. Pans with lids that can be firmly attached, for example. Heavy duty covers for your fryers when you are on the move. Since you don't have a FSS (fire suppression system) in most vans, you need quite a few fire extinguishers, too.

Overall investment: three weeks of running around for permits, about $200,000 to start with a stacked truck.

Parking - believe it or not, it's much harder to park your truck than to sell from it. If you have a driveway for night-time parking it's cool, but many cities do not allow MFS to park in the street. If that's the case, find someone who'll take your truck at night and lets you plug in the battery charger.

During the day, you have to follow your city's code. Many cities give you a territory in which you are allowed to sell, often with a "no longer than X" minutes per station attached. You can not sell within defined distances from schools, police, emt, and fire, and you can not sell anywhere near public events (ballgames, concerts, parades) unless you get another permit. It's how the city makes money.

Your territory is shared with others who also have that area and a host of UL's, unlicensed operations. That's where more of the vandalism and torching comes into play: some of those trucks are operated by people who, shall we say, are do-it-yourself kind of guys when it comes to ensuring they're the top dog in the area. If you want some examples, ask the guys from Taco Bravado in LA how they fared once they "intruded" on a Sureno owned truck's "area."

Selling - that's the easier part. It's tricky, however. Your clock starts ticking the very second you pull the handbrake, and any food that needs prep is food you won't be selling at that time. Sometimes all your sales are in the last ten minutes of a 30 minute park, sometimes you miss the lunch or dinner or after-bar rush by a few minutes and lose to some other truck. Overstaying your permitted time is a bad idea, brick-and-mortar restaurants and other trucks will watch you like hawks and call enforcement on you at any time they get an "in."

Unless you're in joyless CA, apply for a carry permit. You're a lone guy with a day's worth of cash. Getting stuck up has happened to everyone in the business at least once, sometimes it's just the money that take, sometimes it's much more. If Mr. Smith and Mrs. Wesson keep you company, it's not as bad, though. I've had to draw twice, once after midnight closing a friend's truck following a concert I sold outside of, and once after parking and getting out. And that's just me, other trucks that are not under the protection of one or another family have been hit much more often.

Profit - since I don't know where and what you're selling, I won't be able to predict that one. Generally you'll be working on staying operational while aiming for high-profile days (parades, the first warm day in spring if you have a park in your territory, etc.) to make your profit.

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