Opening a Food Truck? 4 Crucial Legal Steps
Thinking about opening a food truck? Why not. The mobile food scene has been growing, drawing lines of hungry tourists and locals alike to many food truck windows. It's a great way to test a restaurant concept prior to opening a brick-and-mortar location. Here are some legal steps to think through before opening your own food truck.
That Catchy Food Truck Name
Every business needs a catchy name, but food truck owners have a special sense of humor. (Hence, food trucks such as Bun Intended, Serial Grillers, and Be More Pacific). Keep in mind, though, descriptive names might not be a good place to start from a trademark perspective. Descriptive brand names (like, say, “Detroit Taco Truck”) are more difficult to protect. It's really a first amendment thing -- there are only so many ways to describe yourself if you are a taco truck in Detroit, Michigan. That's why trademark law disfavors descriptive marks -- you can't stop someone from describing her business accurately. Take some time to think of something unique that fits with your vision and shows off your creative genius. Your truck name will be a crucial part of your business, as that will be what attracts customers to both your window and your brand.
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I implore you start thinking about a trademark clearance search some time during this naming process; at least pre-launch. This isn't a simple Google search. It consists of hours of thorough searching and focuses on 1) the availability of the trademark with the U.S. Trademark Office, and 2) whether your chosen name is likely to put you on the receiving end of a cease-and-desist letter. (There are some "cheap" alternatives, but know the risksbefore going down that road).
You may not be thinking about converting your food truck into a brick-and-mortar restaurant just yet. However, many successful food trucks have taken that route (think drool-worthy Nashville eats like The Grilled Cheeserie or Biscuit Love), so it is good to keep your options open. Because your brand accrues customer recognition during the food truck phase, you're establishing your brand in the restaurant scene, adding to its strength and value in commerce. Proactive protection of your trademark will put you in a far better position once you do open that sit-down restaurant.
Opening a Food Truck and Getting Down to Business
opening a food truck four crucial legal steps spear ip
Before starting the engine and firing up the grill, it's time to think about business entity formation. LLCs ("Limited Liability Companies") are increasingly popular. In fact, Forbes specifically recommends LLCs for restaurateurs. Here are some things to keep in mind about the LLC structure for your food truck:
An LLC keeps the owner from being personally liable, creating a separation between the owner and the company. Owning a food establishment is an inherently risky business, and it’s best to be prepared for any situation without putting your personal assets up for grabs (like your house, car, and bank account) if a conflict arises.
For food truckers who are looking to turn their rig into a restaurant, LLCs can help. If you decide to keep the food truck running as you open your brick and mortar store, the two could remain separate entities. That way, in the unfortunate event that a slip and fall or a kitchen accident puts you in hot water, only one business is legally on the hook.
With an LLC, having a business partner is optional, and there are no shareholders to tell you what to do. This gives you more freedom to make the important business decisions.
Licensed to Sell
Now that you have a great name for your food truck, how do you go about legally serving food and beverages to hungry customers? Start your business off on the right foot. Do your homework and get all of your paperwork filed with the appropriate governmental offices. Regulations vary from state to state (and even county by county), so you'll want to check in with your local government for the specifics.
In Nashville, Tennessee, for example, you need a Mobile Food Vendor Permit. You'll see from the Nashville.gov website that you'll also need to submit other documentation such as proof of insurance, your vehicle registration, hours of operation, and menu description.
Trade Secrets
Don't forget about the special sauce that (literally) keeps people coming back to your food truck. Trade secrets (like recipes and customer email lists) are your intellectual property. Your secret recipes are probably worth keeping under wraps.
In order for information to be considered a trade secret:
Your recipe must be an actual secret; and
You have to gain an economic benefit (customers + $) that you otherwise wouldn't have by keeping that information secret; and
Reasonable attempts must be made to keep it, well, a secret.
Having employees sign nondisclosure agreements, sharing the recipe with only a few specific people, and not advertising specific ingredients are but a few recommended protocols when it comes to safeguarding trade secrets.
Conclusion
There are other things to think about. Hiring and firing employees, getting some solid insurance in place, and using email marketing for your food truck are all part of it. But this list should give you a good start in terms of gearing up for your launch. If you are ready to take your first legal steps to getting your truck out on the street, feel free to drop Spear IP a line below to schedule a free consultation.
Thank you to Spear IP intern Katelyn Jezowski for her hard work on this blog post!