User’s Guide: How to Start Your Own Food Truck

User’s Guide: How to Start Your Own Food Truck
NY Magazine, 9-Aug-09
Ben Leventhal

In the two years since New York published an extensive guide called “Cartography,” the city’s enthusiasm for street food has only increased. Trucks and carts, once the purview of recent immigrants, are now alternative gigs for displaced recession victims or starter dream jobs for anyone who ever wanted to own a restaurant but couldn’t make the numbers crunch. Before you fire her up, however, there are a few things you should know about operating a food truck, from getting a license to making sure you don’t get knifed by the halal guy next to whom you just parked (spoiler: You’re going to get knifed by the halal guy).

Startup/Operating Costs: Though trucks are a small business, they still require a significant investment. Costs include the truck, permit acquisition, supplies, security, insurance, and truck storage, among other things. Some of the costs are obvious, and some are not. Truck parking, for example, may not seem like an expense, but the Department of Health requires all trucks to be stored and maintained at a food-truck commissary, where you’ll pay rent for things like access to clean water and refrigeration. The less you need your truck to do, the cheaper it is. Treats Truck, which bakes its goods off-site, was born in 2007 with $80,000 in capital.

According to one business plan we’ve seen (but never came to fruition), a pizza truck seeking $300,000 in start-up capital expected to make money right away. High volume and excellent margins can be a reality for trucks. For this pizza concept the profit margin was estimated to be over 50 percent, as compared to a good restaurant, where the margins aren’t greater than 10 percent, if you're lucky.

Permits: The Rules of the City of New York, the abstruse, hulking set of guidelines that regulate activities ranging from operating a street cart to carrying a handgun, stipulates that two permits are required: a Mobile Food Vendor License for you and a Mobile Food Vending Unit Permit for your truck. The former is a matter of paperwork and a few classes. The latter is not, as the city stopped issuing them ten years ago, according to a representative at the Department of Consumer Affairs, and there has been a cap of 3,100 licenses since 1979 (5,100, if you count fruit and vegetable carts, too; a bill has been introduced to raise the cap to 25,000). The permits are distributed via lotteries. Veterans are eligible for certain exceptions and receive priority status in the permit lotteries, which are held periodically, according to Elliot Marcus, associate commissioner for the Bureau of Food Safety and Community Sanitation. And the rep over at the Department of Consumer Affairs did tell us that you can get an exception from the Parks Department or a hospital to operate on their property.

Indeed, the process is extremely complex and loopholed, and any exception will increase your start-up costs significantly. The Times ran a story on this recently, as did the Village Voice. Also, "some people are operating carts legally and some aren’t," hinted our Consumer Affairs operator.

The upshot: Your only real option for getting a permit is the black market, where you can either buy a permit illegally, mostly in Queens, for between $5,000 and $20,000, or partner with an existing license holder, for cash and a portion of profits, say 10 percent of sales. If you’re interested in pursuing one of these options, head to a food-truck commissary (we’ll get to those in just a moment) or ask your favorite truck operator, who might have heard about an available permit via word of mouth. (Note that the NYPD arrested six people last month on charges of fraud counts related to illegal food-vending permits, so brokers — and permits — are harder to find.)

One important footnote here is that while the brokering of permits is highly illegal, once you’ve secured the permit, the Department of Health does very little at present to police these rogue permits. And, Marcus concedes, there are many loopholes. For example, "There’s absolutely no requirement that a permit holder works the cart. I could have a permit and hire people [to work] seven days a week and monitor what they do," he says. "And that would be completely legal .. In the grand scheme of things, it’s not the biggest health priority for us."

The Truck: This is the relatively easy part, as food trucks are readily available online. Budget $75,000 to $100,000 for the acquisition and retrofitting of the truck. (Kenny Lao bought his Rickshaw Dumpling Truck on the "Commercial Trucks" section of eBay.) To ensure that your rig passes Health Department approval, Sean Baskinski of the Urban Justice Center’s Street Vendor Project recommends Workman Cycles in Ozone Park (800-BUY-CART) for the job. The garage does enough truck work to be well versed and up-to-date with DOH code. (There’s also Steve’s Sheet Metal in Woodside, but ’Steve’ just got arrested for permitting fraud. True.)

Location, Location, Loc … hey, who slashed my tires?: City codes make certain streets and areas off-limits to food vendors, so consult the list supplied by the Street Vendor Project when you’re picking a spot. There is an unspoken law of the street that says seniority plays — and that if you try to park on a corner or stretch that has long been occupied by someone else, you will pay a hefty price. We asked Kenny Lao why he doesn't just set up shop in the meatpacking district, which on a weekend night would seem as high-volume as locations come, and he indicated that the reason was in part the threat of violence from existing vendors.

Still feeling the Churros y Chalupas truck, champ? Most of the big restaurateurs in the city have passed on trucks because of the complications around permits and location. (Indeed, the Street Vendor Project is now actually offering a class on it.) But, don’t let that scare you: good luck. Let us know when you fire up the Twitter.

Related Links
Cartography Revisited: An Updated Map of New York Street Food
The Street Vendor Project
New York’s twenty best food carts ranked, in order
And other essential street-cart questions answered
The 50-Vendor Poll
Wall Street Journal: Food Truck Nation
Wall Street Journal: Top 10 Lunch Trucks Around the Country