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“Eating on the go” has taken on a new meaning thanks to food trucks. In an instant, your favorite sandwiches, tacos, and other delectable goodies can be whipped up, wrapped, and transferred to your bellies.
The food truck craze of today got its start during the recession of 2007-2009. Roy Choi may be only 51 years old, but is considered the grandfather of the modern food truck, having launched a $1.3 billion dollar industry with his Korean taco truck, Kogi, in Los Angeles in 2008.
Success stories like Roy’s make investing in a food truck seem like a no-brainer. After all, it’s a chance to launch your dream restaurant minus the rent payment, right? Well, yes and no.
How Much Does a Food Truck Cost to Start?
For starters, you’ll need to consider the costs incurred by starting and running any food business (labor, goods, insurance, marketing and advertising). But you’ll also need to be aware of certain industry-specific expenses:
The food truck itself
Equipment and decor
Commercial kitchen space & parking
Permits & licenses
Let’s break them down and tie our findings back to the all-important question: How much does it cost to start a food truck?
The Food Truck
Obviously, this is going to be the biggest line item in your budget.
Metzy's Taqueria on How to Run a Food Truck
How Much Does a Food Truck Cost to Buy?
Depending on its age and all the bells and whistles it contains, food trucks costs will vary. Where your investment falls on that spectrum depends on:
The condition (new or used)
Where in the country you make your purchase
Clearly, a no-frills truck will run you considerably less than one with lots of bells and whistles. Similarly, if you live and plan to operate your truck in an expensive market, be prepared to pay a premium.
How Much Does a Food Truck Cost to Rent?
Just because your operating budget is a bit tight doesn’t mean your foray into the food truck game has to stall. While buying the truck can cost a pretty penny, those costs drop significantly if you choose to rent your vehicle instead. For a lease of six months or longer, owners can expect to spend $2,000-3,000 a month on a truck.
Food Truck Equipment and Decor
Wheely Grilly on How to Start a Food Truck
Most food trucks are step vans that are customized to meet the needs of food service. If you begin with a used food truck already outfitted for service, you may only have to make minor changes or updates to accommodate your model.
If you’re beginning from scratch, this is no small task.
Food Truck Empire breaks down the basic steps involved, once you have a vehicle lined up. You must:
Set up electrical wiring
Frame the interior
Cut out holes for your serving window and ventilation
Finish inside walls with fireproof material
Install gas / propane tank, hood, and cooking equipment
Set up your generator
Design the outside of your truck and have it wrapped
It’s a lot of steps, involving lots of different professionals. You may elect to work as your own independent contractor, or hire a company that specializes in customization to handle soup to nuts.
Bottom Line Estimate: $50,000 - $200,000
Commercial Kitchen Space & Food Truck Parking
Food Truck Kitchen Space
Serving meals on wheels is one thing. Prepping meals on wheels is another, and for the most part, it’s simply not feasible.
Most food truck operators rent space at a commercial kitchen – a commissary – to prep and store food. In fact, commissary space is so essential to a food truck’s operations that many cities require proof of a commissary arrangement as part of their food truck application process.
Renting commissary space can run up to $1,500 month, usually incorporating both annual and hourly fees. Commissary kitchens serve many types of small food businesses, not just food truck operators, meaning they are popular places. In high demand markets, it’s not uncommon for commissaries to have a wait list.
If you find yourself competing for space, consider brokering an arrangement with other certified owners of commercial kitchen space. Restaurants, community centers, and even churches may have a certified kitchen that could be rented for food prep.
Food Truck Parking
After food prep and service are done for the day, where do trucks go at night? To a secure, city-approved location, that’s where. Many cities strictly regulate where food trucks can park, not only when they’re serving, but when they’re closed as well.
If you have the space to store at home on private property, that’s certainly an option. But if not, many commissaries offer overnight parking for an additional fee. Be sure to consider this when shopping for your commercial kitchen space.
Bottom Line Estimate: $500 - $1,000 / month
How Much Does a Food Truck Cost to License?
Restaurant permits and licenses stack up quickly for any food business, but even more so when your operation is mobile. Casey Grawien is the owner and founder of Street Surfer, a food truck based in Tampa. She described the “licenses and permits to work in each zip code [they] have clients,” as her number one unexpected cost.
“Since the Tampa area is so large,” Casey explained, “there are multiple rules and regulations you need to follow depending on [whether you’re serving in] public [or] private events.”
Here’s a rundown of some of the basic permits and licenses food truck operators are expected to secure. And it’s not uncommon for cities to have additional requirements.
Business certificate and EIN (Employer Identification Number)
We looked at requirements for food truck operators in three different cities to see how fees stack up. Note that many of these are not one-time, but annual costs. These range greatly from city to city, anywhere from a few hundred dollars a year to over $1,000 a year.
New Orleans, LA
Hawker and Peddler Permit
$299 + $89
Food Truck License/Permit
Food Truck Application
Vendor Identification Badge
Sales Tax Deposit
Additionally, simply navigating which fees are owed to which department and in which order they need to be secured can be quite tricky. Many cities with a vibrant food truck scene have associations where members lobby for favorable policies and serve as a resource for newcomers. The Nashville Food Truck Association is a great example. Annual dues for participation are yet another cost to factor into your budget.
Bottom Line Estimate: $800 - $1,400
How Much Does It Cost to Start a Food Truck: The Total
Tallying up all these estimates to figure out how much it cost to start a food truck, you can expect to spend between $75,000 - $250,000 to get it off the ground. Keep in mind, this does not include universal restaurant startup costs such as labor, food, kitchen tools, or equipment.
Sticker shock setting in yet? While it’s relatively less expensive to start a food truck than opening a brick-and-mortar restaurant, it is still a big investment that requires careful planning.
For aspiring food truck operators, Katharine Woodward, owner of Walter’s Hot Dogs, has this advice:
“Food trucks are amazing because you get to bring them all over, meet new customers everyday, and see [at which locations] your demand is highest. However I’d stress to everyone that truck life is not easy. It is a restaurant on wheels so not only do you need processes in place for admin, bookings, contracts, party planning, and HR, but you also need processes for opening and closing, loading and unloading, cleaning etc. It’s a 24/7 job, wifi is in and out, and things can always break on the road. There are a lot of variables, the same as a restaurant. But if you’re ready to work hard and love doing it everyday, truck life is very rewarding!”
In the end, the question “How much does it cost to start a food truck?” varies. But the investment is worth it for those willing to go on the ride.
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