Cost to Start a Food Truck [Startup & Ongoing]
Food trucks have gone from something you just see at the state fair to a trendy way to eat “on the go.” From quick snack bites to upscale meals, there’s a food truck for every taste. If you’re looking for something more affordable than opening a restaurant, a food truck might be the way to go.
It typically costs around $100,000 to start a food truck. However, you can get one up and running in some places for closer to $50k. Depending on what you serve, where you’re located, and what your vision is for the business, the cost may be much higher, with some trucks costing $250k or more.
How Much Does it Cost to Start a Food Truck?
The cost to start up a food truck varies mainly depending on the cost for the truck itself and the kitchen setup. Depending on where you live, the licenses, permits, fees, and where you’re allowed to set up for business may vary. These all have big impacts on the cost for your truck and your potential revenue stream.
On average it costs anywhere from $28,000 to $150,000 to start a food truck. If you decide to pursue this business venture, your actual cost will vary depending on many factors, including the state you’re located in.
|Florida||$28k – $55k (and up)|
|California||$50k – $100k (and up)|
|Texas||$28k – $114k (and up)|
|New York (NYC)||$100k – $150k (and up)|
|Colorado||$40k – $65k (and up)|
|Tennessee||$70k – $130k (and up)|
The reason that the cost to start a food truck varies so much from state to state is that license and permits have different costs, and there are other expenses like commissary space to park the truck that are different depending on your location.
For example, operating a food truck in NYC or Chicago is more expensive than in Florida or Texas, but the potential revenue is also probably higher in more densely populated areas.
Your food truck’s size will also have an impact on the cost. While the average food truck is around 16 feet long, there are some options that are closer to 30 feet long. These are obviously more expensive to purchase, and probably more expensive to operate.
The type of fuel that the truck runs on will also affect the cost to operate the vehicle. You should do some research and decide whether you want a truck that runs on gasoline or diesel, then consider the fuel costs for each.
Buying a Food Truck Versus Renting or Leasing – Which is Better?
When you set out to get your new food truck, you’ll be faced with an important decision – should you buy or rent? No matter which way you go, your truck will be your biggest (and most important) expense.
Things to consider when selecting your truck
The truck’s condition (new or used, vintage or modern)
Existing equipment (is it outfitted with a kitchen or do you need to install one?)
The truck’s size (do you need a big truck with several cooking stations, or a small van with a tiny window and deep fryer?)
Geographic location (where you buy the truck and where you’ll operate will have an impact on the cost and other factors)
Deciding whether it’s better to buy or lease a food truck depends on your financial situation and your goals for the business. While renting or leasing might be less expensive in the short run, one thing to consider is that the truck isn’t yours, so when the lease is up, the owner will decide if you have to return the truck or if they’ll renew your rental agreement.
So, even if your food truck business is doing very well, there’s a chance that you might have to hand over the keys at the end of your lease term.
On the other hand, buying a food truck isn’t an option for everyone. It can be very expensive, and depending on the condition, you may have a hard time getting financing.
How Much Does it Cost to Buy a Food Truck?
Buying a food truck outright can be a big up front investment, but it can also lead to bigger revenues when you don’t have to pay the rent. The cost for your truck will depend on several factors, like the condition, size, and features.
Of course, that’s a hefty price tag, but you’ll get all the bells and whistles of a fully loaded food truck.
You also have a lower risk of problems since the truck is new. Unlike purchasing a truck and converting it into a food truck, something like this will already have all the kitchen equipment you need. That will save you from having to purchase those items separately and then pay for installation costs.
Other benefits include a warranty and potentially lower interest rates (if you have financing options at all). In most cases, if you purchase a brand new food truck, you’ll also get at least a five-year warranty.
A solid warranty can save you a lot of money in the long run when it comes to repairs and preventing lost revenue opportunities by keeping your truck up and running.
Plus, there’s definitely something to be said about the peace of mind that comes with having a brand new, reliable vehicle, especially when the vehicle is your livelihood.
A used truck with a new kitchen will probably cost anywhere from $60,000 to $100,000. This is a good option if you are worried less about the truck itself and more interested in new, quality kitchen equipment. However, these trucks run the risk of mechanical problems if you don’t have them checked out or if there are any hidden issues.
Sometimes, a truck in this category is a hidden gem. With a few engine or mechanical upgrades, you can have a top of the line professional kitchen on wheels at a fraction of the cost of a brand new food truck.
Another option is to purchase your new kitchen separately and install it into an older truck. This is kind of like purchasing an older home and renovating it with new, modern features.
Just like adding on to a home, the expense for this type of project can add up fast. Plus, you’ll need to consider the possibility that if the truck has mechanical problems or breaks down, you’ll still be paying for your brand new kitchen until you get the truck fixed and running again.
There’s also the potential that an older truck may not meet the current regulations and standards for emissions, weight, or other requirements.
A used food truck is normally your least expensive option, and it may cost anywhere from $25,000 to $100,000.
There’s always a risk when you purchase something used, so it’s a good idea to do your homework and have the vehicle carefully inspected by a professional.
In most circumstances, you’ll purchase a used food truck “as-is,” which means it won’t come with any kind of warranty. What you see is what you get. In many cases, these trucks may be more of a “fixer-upper” investment opportunity, just like buying a house that needs a little love.
That doesn’t mean that these trucks aren’t packed with potential. Sometimes you can score a great deal on an older truck that just needs a little updating.
On the other hand, you may find a modern, custom food truck that’s up for sale on the higher end of the price spectrum.
These are usually built with high quality kitchen equipment and engine upgrades to keep the truck running well and with fewer potential problems. Of course, you’ll pay a higher price for a used food truck that falls under this category.
You should also keep in mind that it may be more difficult to get financing on a used food truck versus a new one.
How Much Does it Cost to Lease a Food Truck?
Renting or leasing a food truck is a smaller investment up front, but the monthly payments can still be pretty steep. Most of the time, you will pay between $2,000 and $4,000 per month for a leased or rented truck.
In some cases, you may be able to find a lease-to-own arrangement, which could be a great alternative for anyone who doesn’t have the upfront capital to purchase a truck outright. It’s also possible to rent or lease an existing truck that’s already branded, which has the potential for starting your business with a built-in customer base.
Usually the rent may vary depending on if the lease is a long-term or short-term agreement. Leasing a food truck for a longer period normally results in a lower monthly rate, but you’re locked in for a longer amount of time, even if you aren’t getting the results you’d hoped for.
Food Truck Costs Breakdown and Factors
Startup Costs for a Food Truck
There are many one-time startup costs to consider for owning and operating your own food truck. These range from the costs associated with the truck itself to things like marketing and website design expenses.
Let’s take a look at some of the startup costs you should plan for.
|One-Time Startup Item||Estimated Cost|
|Food Truck||$30k – $80k (and up)|
|Food Truck Inspection||$100 – $500|
|Standby Generator||$900 – $10k|
|Point-of-Sale System||$500 – $2,000|
|Paint & Truck Wrap||$3,000 – $8,000|
|Initial Food Cost||$750 – $5,000|
|Utensils and Paper Products||$500 – $2,500|
|Website Design||$500 – $3,500|
|Office Supplies||$200 – $1,000|
|Advertising Costs||$500 – $2,000|
|Licensing and Permits||$500 – $20,000|
|Legal and Other Consulting Fees||$500 – $5,000|
Kitchen equipment is another major expense for starting up a food truck business. It’s important to select quality equipment that will last, but you’ll also have to consider the cost for the equipment.
The type of kitchen equipment that you should get for your food truck mainly depends on what kind of food you’ll serve and what the truck is already outfitted with. Either way, you’ll need some basic equipment like ovens, grills, fryers, refrigerators, freezers, and hot-holding equipment. You’ll also need to consider storage containers, pots and pans, dishes, knives, and other small appliances like food processors.
Kitchen equipment will likely cost you several thousand dollars, so it’s important to take an inventory of what your truck has and what you’ll need whenever you formulate your business plan to determine your upfront startup costs.
Purchasing used equipment is one way to potentially save some money, but it’s also a risk. Whenever you purchase used items, you run the risk of malfunctions and often forfeit any warranty protections that you’d get with new equipment.
For the basic license and permits to operate your food truck, the average fees are between $1,500 and $2,500.
Permit Costs for a Food Truck
Licenses and permits are a big expense for food truck operators. According to the U.S. Chamber of Commerce, the average food truck owner spends around $28,000 on permits, licenses, and legal compliance during their first year of operation.
Of course, that number may be much lower depending on where you live. In any case, you’ll need to have various permits and licenses to meet administrative regulations, health and food safety rules, vehicle requirements, safety regulations, employment rules, and zoning.
If you live somewhere like Indianapolis, Indiana, you’ll have a much lower bill for your various permits, as the fees in that area average around $600.
On the other hand, if you’re in Boston, Mass., you should expect to pay over $17,000 for your permits.
For the basic license and permits to operate your food truck, the average fees are between $1,500 and $2,500.
Something else to consider is that if you take your food truck on the road, you’ll need to know and follow the rules and regulations for every city and state that you visit. You will probably need a permit for each city that you set up in, which can really add to your upfront and ongoing expenses to run the business.
Ongoing Expenses for a Food Truck
There are many ongoing expenses to consider when planning for your food truck business, just like ongoing expenses for any other restaurant. However, unlike a typical restaurant, your biggest expenses aren’t usually from food and ingredients.
The biggest ongoing expenses for a food truck include gas, insurance, permits, licenses, maintenance for your truck, equipment, supplies, and so on.
|Ongoing Monthly Expense Item||Estimated Monthly Cost|
|Payroll||$2,000 – $10,000 (and up)|
|Commissary Rent||$500 – $5,000|
|Monthly Credit Card Fees||About 3% of monthly sales|
|Fuel||$300 – $1,000+|
|Insurance||$150 – $600|
|Telecom Equipment/Usage Fees||$65 – $200|
|Permits||$500 – $1,000+|
|Maintenance||$50 – $200+|
|Event Fees||$200 – $1,000|
Food items and ingredients will be ongoing expenses that you’ll have to account for. One way to help reduce this cost is to buy your supplies in bulk and build relationships with local vendors to get better prices.
In many cases, once your food truck becomes established and you purchase from vendors on a regular basis, you’ll be able to secure more competitive pricing. It never hurts to ask about quantity deals and other discounts or rebates that you may be able to take advantage of.
How Much Does it Cost to Run a Food Truck Monthly?
When you take into consideration the ongoing expenses for operating a food truck, it’s easy to see that the monthly costs add up quickly.
Beyond that, you’ll need to consider the costs for your food items and ingredients, beverages, utensils, and paper products each month.
Food trucks usually run about 25% to 33% food cost. So, it’s important to plan your menu in a way that will maximize your profits and reduce your cost. Most experts agree that it’s key to offer a few menu items that you do very well rather than having an extensive menu with dozens of items on it.
It’s a good idea to offer two or three core items that your food truck can become known for, as well as some drink items and maybe a dessert. It’s also helpful to offer a couple of seasonal options that may change over time.
Another important consideration is your staff. If you’re not able to do all the work yourself and you’re in a position to hire some extra help, it can be a good business move.
If your business takes off you don’t want to lose your customers because the service takes too long. If you hire staff, the payroll typically runs about $15 per hour for kitchen and window staff, and at least $20 per hour for a manager.
Is it Worth Owning a Food Truck?
Owning and operating a food truck can be a rewarding and profitable venture if it’s done right. However, it’s also hard work that will take a lot of blood, sweat, and tears, especially when you’re starting out.
It can definitely be worth it to own a food truck if you do it right. It’s a great way to be your own boss, do something outside the box, and turn a profit selling great food in your own restaurant on wheels.
If you’re going to start up a food truck, you should plan to be out there hustling at least six (if not seven) days per week for lunch and dinner. Being available to attend various events, festivals, and food truck rallys can also help boost your business and get your name out there.
There are a lot of up front and ongoing costs to consider, including things that a normal restaurant doesn’t have to worry about.
Keeping your truck maintained and running is essential to keeping your business up and running. You need to have some money stashed away for repairs so that you can get back out there as soon as possible. Every day that your truck is in the shop or not out selling food, you’re not making money!
Being visible and getting into various events is essential to your food truck’s success. Keep in mind, however, that attending these events isn’t always free. You may have to register or pay fees to attend these events. Still, food truck events are some of the best ways to showcase your product to customers and increase your popularity.
That being said, you can still make a great living owning a food truck. The most popular food trucks in some cities have monthly revenue of $50,000 or more. Even in less populated cities, some smaller food trucks make around $15,000 per month, which isn’t bad for selling street food.
Owning and operating your own business can be a very rewarding experience and one that leads to great profits. A food truck is no exception. Still, like any other business venture, what you get out of it will be directly correlated to what you put into it.
Food trucks are more popular than ever, so it’s a great time to make the investment in such a business venture.
If you’re still uncertain about starting up your own food truck, you can also consider investing in a food truck franchise. These are less risky than starting your own food truck from scratch, as they come with a built-in business plan and some customers who are familiar with the brand.
Unlike a traditional restaurant, owning a food truck has low overhead and the potential to change your offerings to suit your customer base or the season. Many people that own food truck businesses agree that the reward is worth the risk, and they often wish that they’d started their business sooner.