How to Start a Food Truck 19: Organize Your Licenses and Permits

This article is Unit 5 of our “How to Start a Food Truck” series.

There was a lot of legal mumbo jumbo in our last lesson as we explained how to register your food truck business as a legal entity. Today’s lesson on licenses and permits will have a lot of the same. We know, we know—it’s complicated information and it’s not as fun as testing your recipes or buying your food truck was.

Nonetheless, it’s all necessary work, and we again recommend bookmarking this installment in the series so that you can refer back to it as you begin going through all the paperwork.

So, what’s on today’s menu? We’ll walk you through some of the licenses and permits that you’ll need to sell food from a food truck, as well as some of the requirements you must fulfill as an employer. Then, we’ll show you how to stay organized and keep everything together while you’re researching the local requirements in your area and applying for various documentation.

Let’s get those food truck wheels rolling!

Business Licenses and Permits: An Introduction

We love the Small Business Administration (SBA) here at FoodTruckr, and we’ve recommended checking out their resources a number of times before—but the particular page we’re sharing today is especially awesome!

On this page from the SBA, you can find information on business licenses and permits in your area. Once you click that link, type in your city and state or the zip code where you’ll be doing business and select “restaurant” as the business type. After you hit “search,” the magic happens! You’ll get a long list of the items you’ll need to run your food truck—and, most importantly, the links to your area’s government pages and the specific departments you’ll need to contact.

Now, this won’t be a complete checklist of everything you need to operate a food truck in your city, but it should offer a pretty thorough overview of the categories you’ll need to consider. Let’s take a look at some of the categories you’ll find:

1. Tax Registration

Most food truck owners will need an Employer Identification Number (EIN), a number used by the IRS to collect taxes from business owners and their employees. You can apply for an EIN online at the IRS website or by fax or mail. 

During the application process, you will need information such as the name of your business, the county and state where you’re located, and your Taxpayer Identification Number. When applying online, you have to complete the application in a single session, so be sure to have the necessary information handy and review online guides before jumping into the process.   

You will also need to register for additional licenses and tax-specific identification numbers in your state. You can find state-specific information by clicking on the links from the SBA page.

2. Business Licenses

Before you can begin operating your food truck, you’ll need some general business licenses from your state as well as a Food Service Establishment Permit. 

Each state has their own requirements, so you’ll need to visit your state or county’s website for the specifics. You can also find more information on these licenses and the Food Service Establishment Permit from the SBA, and we’ll cover some information on additional food truck-specific permits you may need later in this post (under the “Food Truck Laws” heading).

3. Local Permits

In addition to the state licenses, you will also most likely need several local licenses from your city, county, or both. Much like state business licenses, each city has different requirements. It’s important to find out what’s required in your area by visiting the links provided by the SBA or your city or county’s government website.

These are a few of the most common permits you’ll encounter:

• Alarm Permit
• Business License and Tax Permit
• Health Permit
• Signage Permit
• Zoning Permit

Some permits recommended by the SBA for restaurants (such as a building permit) won’t be relevant to you as a food truck operator—but you will need to keep them in mind if you ever decide to expand to a brick and mortar location.

4. Incorporation Filing

Unless you’re operating a sole proprietorship (which can be risky for a food truck owner, as all of your personal assets will be on the line if you’re sued for something like a work-related injury, food poisoning, or a collision), you’ll need to formally register your business as a legal entity. We covered this topic in-depth in this post and you can find the specific forms you need to make it happen from the SBA page.

5. Doing Business As (DBA)

In some cases, you may also need to register a “doing business as (DBA)” name to legally identify the name your truck is operating under. Again, we covered this practice here and you’ll find the specific place to register your business name from the SBA page.

6. Employer Requirements

There are also a number of requirements you’ll need to meet as an employer if you’re planning to hire one or more people to work in your food truck. This is one of the more complicated parts of getting your food truck business off the ground, so we recommend starting out by reading this overview from the SBA, as well as the IRS Employer’s Tax Guide (PDF).

Here are a few of the other employer requirement categories you’ll need to consider:

Documentation

Before you can hire any employees, you need to make sure that each individual is legally allowed to work in the U.S. All new employees will need to fill out:

• An I-9, which collects documentation to prove the individual can legally work in the U.S.
• A W-4, which determines income tax withholding.

You can find the most up-to-date versions of these forms from the IRS and you can use the government’s E-Verify website to help you process the I-9 form.

After you’ve officially hired an employee, you must also report him or her to your state’s directory. Most states require this to be done within 20 days. You can find the link for your state’s reporting service from the SBA.

Insurance

You need two key types of insurance to cover your employees: unemployment insurance and workers’ compensation insurance.

Unemployment insurance covers your employees if you terminate them or lay them off from their jobs. You will pay the state for this type of coverage, and you can find the link for your area from the SBA’s licenses and permits page.

We discussed workers’ compensation insurance in Lesson 16—but in general, you should know that it covers your employees if they are injured on the job. 

Each state has different requirements for the type of coverage you need, and your insurance agent or broker can help you find the best insurance for your business. You can also find the link to your state’s requirements from the SBA’s licenses and permits page.

Posters

As a business owner with employees, you’ll also be required to display certain posters in an area where all of your employees may see them. These posters will contain information on their rights in regard to workers’ compensation and minimum wage. Find out what you need to display from the Department of Labor.

Food Truck Laws

In addition to the general business licenses and permits you’ll need, each state, county, and city may also have their own additional requirements for food trucks. Keep in mind that if you’re planning to operate in more than one city or county, you’ll need to know about the laws in each area and may need separate licenses and permits for each one.

We’ve explained why it can be tough to find your city’s local laws before, but it’s especially important to make sure you’ve researched them all thoroughly before taking your truck out on the street. As a food truck owner, you need to consider laws for topics such as:

• Bathroom Locations
• Commissaries
• Food Handling
• Parking Laws and Permits
• Truck Inspections and Food Safety Inspections
• Zoning

We’ve explained why it can be tough to find your city’s local laws before, but it’s especially important to make sure you’ve researched them all thoroughly before taking your truck out on the street. As a food truck owner, you need to consider laws for topics such as:

• Bathroom Locations
• Commissaries
• Food Handling
• Parking Laws and Permits
• Truck Inspections and Food Safety Inspections
• Zoning

Find Your Area’s Food Truck Laws

The Department of Health is most likely the agency responsible for regulating food trucks in your area. Look for it under any of the following names:

• Department of Health
• Department of Public Health
• Department of Environmental Health

If you’re having trouble locating the correct agency, be sure to also see if there is a food truck association in your city. Food truck associations often spend a lot of time working to better the food truck laws in their cities, and many of them will have information about local restrictions and requirements listed on their websites. They may also be able to point you in the right direction or help you connect with a food truck owner who can share some tips and tricks with you.

Many cities and counties also have pages on their websites that explain how to start a food truck. For example, here’s a page from the City of Boston’s website and one from the City of Philadelphia (PDF). 

If you can’t find any information about opening a food truck on your local health department’s website, look for the regulations for opening a restaurant. This will give you a general sense of some of the laws and restrictions you may face. After reviewing these requirements, look for a phone number where you can call and ask further questions about how the restaurant requirements are different for food trucks.

Note: Even if the website has a dedicated page for opening a food truck (and especially if they only have guidelines for brick and mortar restaurants!), don’t assume that you’ve found all of the regulations and everything else you need to know. Always call and ask questions of the licensing officials directly.

We know that all of the hoops you have to jump through to get this information can be a little discouraging and stressful, but remember—cities do want new businesses to open, even if it seems like they’re trying to make it impossible on purpose. If you’re having trouble working through all the red tape to find the answers you need, find out if your city has a Department of Economic Development or a small business assistance program. Visit the “Businesses” page of your city or county’s website and look for information on “Starting a Business in [your area].” You can also find a wealth of resources from the SBA or from SCORE.org, a nonprofit organization that helps entrepreneurs get the education and mentorship they need to reach their goals.

Our Top Five Organizational Tips

That’s a lot of information and paperwork to keep track of! Fortunately, we’ve got a few key organizational tips that can make the entire process a lot easier as you begin working through this lesson.

1. Make a Checklist

Before you start trying to get the licenses and permits for your food truck business, explore the links and other articles we’ve provided above and make a thorough checklist of everything you need to investigate. The list might seem daunting at first, but keep in mind that some contacts such as your local health department office may be able to provide answers to several of the questions at once.

Additionally, you should understand that you will come across more things to do as you begin going through your list. Simply leave some room (and plan some time!) at the bottom of your list to accomplish these new tasks.

2. Plan a Dedicated Time for Research

Some FoodTruckrs prefer to take a long weekend to knock out all of their research at once, and others would rather spread it out by spending an hour every night for several weeks until it’s done. Either approach is okay as long as you plan a specific time that will only be dedicated to researching, gathering, and applying for your food truck’s licenses and permits—and then stick to it! 

Try not to let little distractions interrupt this working time, as your focus and commitment to accomplishing this task is pivotal to your success.

3. Keep Records of All Your Phone Calls, Meetings, and Emails

Once you start researching the particular requirements for your area, be sure to keep detailed records of every one of your phone calls, meetings, and emails. 

For starters, the records will help you ensure that you’ve gotten all of the information correct and that you know exactly what you need and how to obtain it. 

These records are also an important safeguard in case you run into trouble down the line. If you’re facing problems because you didn’t have a particular permit or license in place or because you didn’t file one application the right way, it’s helpful to know exactly who you talked to and when you spoke so that you can resolve the discrepancy as quickly as possible.

4. Store Your Documents in One Place

This is one simple tip that’s surprisingly hard for many people to follow! Store all of your documents and the information you’re recording in one place. This includes all of your notes, any records you’re keeping on your contacts, and copies of applications or approved licenses you’ve received. 

You’re going to be managing a lot of paperwork over the next few weeks, and it’s important to know exactly where to go whenever you need to review a document. If you’re working with hard copies and electronic documents, consider scanning in your papers or printing off online communications so that you can keep everything in the same folders.

5. Be Sure to Use the Exact Same Information Every Time

As you’re completing applications and filing documents, be sure to use the exact same information each time. This might seem like a no-brainer, but you’ll need to be careful to keep things consistent if you have a nickname that you sometimes go by, a common abbreviation for your street address, or if you’ve registered a separate DBA name for your business. 

Make sure to use the same information on each new form so that there is no confusion down the line.

Get Ready to Move Quickly

You’ve been hitting the books hard over the past few weeks, and the day you can take your truck out on the road is getting so close that we bet you can taste it! That’s awesome news, and we hope you’re getting ready to move quickly and advance to Unit 6 of “How to Start a Food Truck.” 

In Unit 6, we move on to something a little more fun—your truck’s personal properties and the elements that will define your truck to customers. We cover branding, logos, websites, and social media, and we can’t wait to share these awesome lessons with you!

Until then, we’re also here to help out with any questions you have. Are you feeling overwhelmed by the number of documents and licenses you need to procure? Tell us how we can help in the comments below or send us a message on Facebook or Twitter. We’re here to support you as you work toward opening a food truck, and we’re happy to help with anything you need!

image by Brett VA

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