Hot to Go: Legal Considerations for Food Truck Businesses
By: Alex Smith
The “food truck craze” has proven to have staying power, as evidenced by the vehicles’ regular presence at breweries, festivals, concerts, and even grad parties. While consumers have shown that they have an appetite that will keep the food truck industry lucrative, there are a number of legal considerations that should be taken into account before you start retrofitting a parcel truck and drawing up a menu.
Licensing
All food trucks operating in the state of Minnesota are required to be licensed. The specific type of license you’ll need, however, will depend on where you plan to operate your truck. Without knowing for certain where your truck will be most successful, it may be difficult at first to determine where your truck will be primarily located. One recommendation in this scenario is to obtain a Mobile Food Unit license from the Minnesota Department of Health. This permit will allow you to operate in many counties in the state of Minnesota as well as certain cities within the Twin Cities metro. Additionally, many jurisdictions in Minnesota have reciprocal arrangements with the MDH where, for an additional fee, you can obtain the required local license if you already possess an MDH license.
Obtaining an MDH license from the MDH will require substantial effort and time dedicated to preparing and submitting your proposed plan for review. All of the following information, among other items, must be included in the plan:
Proposed menu
Anticipated volume of food to be prepared and served
Scale drawing of truck, including all equipment
Description of finish materials for the truck interior and exterior
Proposed equipment list, including manufacturer and model numbers.
Methods for water sourcing, sewage disposal, and water heating.
In addition to submitting a plan to obtain a license, your food truck will also need to be inspected by the Minnesota Department of Health. The purpose of this inspection is to confirm that the statements in your plan are accurate and that your truck meets required standards.
Location Arrangements
Businesses should also be mindful of the locations where they plan to operate their truck, as these decisions could present certain legal issues. As a threshold matter, a food truck may only operate at the same location for 21 days in a given year. Trucks who exceed this deadline may risk having their license revoked. Accordingly, owners should be mindful of the dates that they plan to operate at certain locations to balance maximizing sales while remaining in compliance.
If you find an establishment that is willing to host your truck on a limited or extended basis, there’s also a possibility that your host will want compensation in return. Should this situation arise, the best practice is to prepare a written contract between your business and the location. This contract should set forth key terms to protect your interests, such as any fee (fixed, royalty, percentage) to be paid to the venue, the hours you can remain open, allocation of certain liabilities, management and disposal of waste, etc. A more detailed contract may set forth additional terms such as marketing and promotion efforts and exclusivity rights.
Additional permits may also be required depending on where you operate your truck. For example, a mobile food vending permit from the Minneapolis Park & Recreation Board is required if you plan to operate your truck at a City of Minneapolis Park.
Insurance
If opting to make your business mobile, you will also have to accept the potential risks and liabilities that come with that choice. In addition to liabilities like customer illness and slip-and-fall that any establishment could face, operating a food truck brings with it the risk of automotive liability, damage to third-party property, and personal injury to customers. A food truck operator should be sure to obtain insurance with comprehensive coverage for these additional risks that may arise.
For legal guidance on starting or operating a food truck business, please contact us at (612) 361-6394, alex@smithpllcmn.com, or through our web portal.
