So, You Want to Start Your Own Food Truck Business
"The Food Truck Lawyer" has some words of advice for anyone curious about starting their own empire, an opportunity that could make sense in the age of coronavirus.


For anyone looking into starting a food truck business, today’s story will be of interest.
Prior to the coronavirus, mobile food trucks were everywhere: at sporting events, concerts, parks or just parked right outside our offices. They have an interesting history, as “The Food Truck Lawyer,” Nashville, Tenn.-based Rachel Schaffer Lawson observes in a post on her firm’s site:
“In 2008, the first ‘modern’ food truck was started in Los Angeles by two entrepreneurs craving Korean-style beef in a Mexican taco. Kogi Korean BBQ would gross $2 million in its first year of operations. Kogi’s success has spawned a mobile food revolution of imitators seeking to ride Kogi’s coattails to financial success.” And most have succeeded, she says.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“While the coronavirus has dealt a severe blow to restaurants in general, still, food trucks have managed to thrive in many places around the country so, for anyone considering getting into the business, this could be an excellent time,” Lawson says. “It is due, in part, to the fact that food service business is considered as essential and food trucks are well-suited for curb service.”
First Off: Is the Name You Want to Use Available?
Lawson makes it immediately clear that, “For anyone who wants to be an entrepreneur, there are four important legal considerations which make starting a food truck business just as complicated — if not more so in some ways — as opening a brick and mortar restaurant, starting with the name you want to use.
“I can tell you nightmare stories of folks who purchased a food truck, thought of a catchy name, had it painted on the truck, and splashed it all over social media only to receive a cease and desist letter from an owner who had trademarked the very same name.
“So, before just picking a name, you need to determine if it is it available or if someone else already has it protected. It is imperative to properly search the name as people are filing for both federal and state trademarks and getting them.
“The hospitality area is very crowded — it is critical to be sure the name is free and available, or you could wind up being sued. The United States Patent and Trademark Office (USPTO) has a free searchable database, which I strongly urge using.”
Lawson recommends being aware of creating possible confusion, even if the name you want isn’t the exact name already taken. For example: Adding an “s” or “z” at the end of a name will not save it from a likelihood of confusion analysis. So, if you manufacture computers and you want to name your company Apples, the “s” at the end is not going to save it from infringing on Apple’s trademark.
Select the Proper Business Entity
Every type of business has some degree of risk, but as Lawson notes, “In food service, the risk tends to be higher due to the public consuming the end product. Therefore, it is not advisable to start a food service business as an unincorporated partnership or sole proprietorship as this leaves the owners subject to personal liability.
“Your better options are a limited liability company (LLC) or a corporation, and the decision as to which is best reached after consultation with your attorney and accountant.”
Operating Agreements/Contracts with Partners and/or Chefs are Essential
As many food service businesses are started with multiple owners, “It is critical that the owners take the time to have an agreement in place among themselves before making a single sale,” she observes.
“You must address how profit and losses will be split, ownership percentages, and what to do in the event of a conflict. What are you going to do if one of the owners dies or becomes severely incapacitated? These are just some of the issues that must be addressed before getting into business,” Lawson underscores.
Who hasn’t heard of a successful restaurant that went south because of a disagreement with the chef? To Lawson, “The owners of a successful food truck will try to anticipate, ‘What if,’ and ‘Can I reduce that possibility by having a fair employment contract with our head chef?”
She also points out the reality that like any business today, “If you are hiring employees, then a handbook is essential."
Also — and this is something that is surprising for many new food truck owners — you will need a contract with what is known as a commissary kitchen. This is your food truck’s home base when not out serving the public. A commissary offers parking, hookups for electricity, water, propane refills, and wastewater disposal.
Many commissaries also offer additional services, like kitchen space to make and prepare food and cold storage space.
Permitting Required
“As with any food service business, food trucks require permitting in order to operate. City and county business licenses are needed, certificates of registration for sales and use tax, and inspections by local health departments are all required.”
Lawson concludes on a note of caution:
“While profitable, it is recommended that anyone looking to start a mobile food business perform a considerable amount of diligent research about cost before jumping into this business.”
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, "You and the Law." Through his column, he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."
-
Aging: The Overlooked Risk Factor
Sponsored Elder care is a personal and financial vulnerability many people fail to plan for.
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?
AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the Fairway
Think of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty Moves
If you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
You Were Planning to Retire This Year: Should You Go Ahead?
If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get It
The Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
Consider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care Solution
If you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a Recession
Recessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income Planning
Once you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.