Lets start a food truck business

The food truck industry has experienced a remarkable rise over the past five years as consumers’ appetite and willingness to frequent food trucks serving gourmet and ethnic food have substantially increased. With an average annual growth of 9.3 percent since 2010, food trucks have experienced a higher growth rate than that of the more traditional food service sector over the same period of time. According to research by the National Restaurant Association, the growth of mobile food trucks will continue to soar in 2016 and 2017, generating over $2.7 billion in annual revenue nationally by 2017.

Despite strong industry performance, people looking to start a food truck business are faced with many hurdles in the operation of their mobile food service businesses. Factors such as high competition, unfavorable regulatory and labor issues, rising commodity costs, and licensing laws and local ordinances must be evaluated prior to jumping in the truck and hanging up the menu.

Starting a successful food truck business begins with planning and preparation. Food truck sales projections, labor and food costs, customer count estimates, location, equipment costs, costs of purchasing or leasing the truck, maintenance and insurance costs, weather trends, other operating costs, and the cost of food items to be included on the menu, must be evaluated and determined in order to develop a sound business plan.

In addition, legal and regulatory issues at the state and local level must be carefully analyzed. Each state, county, and city may have their own permits and licensing requirements. Most states and cities are updating their codes to accommodate and regulate the mobile food truck business. Typical state and local health and food safety regulations include:

(i) approval of food truck design;

(ii) approval for in-truck cooking equipment/configuration;

(iii) vending permits;

(iv) requirements for food truck personnel to obtain food safety certification;

(v) periodic health inspections; and

(vi) food safety requirements for depots where food stocks are stored and replenished.

In addition, local regulations that dictate how, where, and when food trucks can sell food must be analyzed. Typical local regulations include:

(i) bans on where the food truck can operate;

(ii) regulations prohibiting the use of a personal home to store and prepare food;

(iii) duration regulations limiting the hours of operation and limiting the length of time that a food truck may remain in one place;

(iv) regulations limiting the number of food trucks in one location;

(v) standards for trash removal;

(vi) parking and circulation requirements;

(vii) prohibitions on site amenities like tables and chairs; and

(viii) signage and lighting requirements and prohibitions.

Those who wish to start a food truck business in Ohio must comply with Chapter 3717-1 of the Ohio Uniform Food Safety Code (along with certain revisions which become effective March 1, 2016, including, among other things, revisions to the definition of packaged foods, written procedures for vomiting events, new management and supervisory employee certification requirements, and verification requirements in connection with food delivery and storage at correct temperatures and without contamination), Chapter 3717 of the Ohio Revised Code (related to food service operations), and Chapter 3701-21 of the Ohio Administrative Code (related to food service operations). In addition, operators of food trucks in Cleveland must comply with the City of Cleveland, Ohio Code of Ordinances, including, without limitation, Section 241.36 (Mobile Food Shops – Location Permits; Fees), Section 241.37 (Mobile Food Shops – Location Restrictions), and Section 241.38 (Mobile Food Shops – Regulations). Mobile food operators must also be licensed with the health district where the business is located.

I expect that the regulation of food trucks will continue to generate confusion and litigation, so owners and operators of food truck businesses (and those looking to start a food truck business) will need to keep apprised of the changing state and local laws regulating the food truck industry.