Food trucks continue to grow in popularity and don’t seem like they’ll be slowing down anytime soon. The concept of a mobile food business appeals to both business owners and customers alike for their convenience and accessibility.
Food truck businesses aren’t confined to one location and don’t have the same expenditures such as rent like a traditional restaurant. Due to this, food trucks are a great way for those interested in the food business to launch their menu with less expenses and increased flexibility.
However, there are a number of legal considerations to plan for before going ahead and dominating the food business with your recipes. Keep reading to learn more.
What Do I Need To Start A Food Truck Business?
In order to start a food truck business, you will need to gather a few important things first.
Firstly, all your legal documents need to be attended to. This means any contracts, licences and agreements need to be drafted and tailored to your business’ requirements. All of these will ensure your business is legally compliant and protected. We’ll explore this in more depth later, so keep reading to know more.
Next, you will need to think of the supplies for running a food truck (you may need to look into having the right Supply Agreements as well). This includes the truck itself, produce, ingredients, serving and cooking equipment. You will also need to think about hygiene standards and the items you will need to keep your truck clean.
This can be a lot to take into consideration, so many business owners opt to have a business plan where they write these things down to allow themselves to better strategise their preparations.
How To Start A Food Truck Business
The most important aspect of starting any business is doing the research. Assess the market, set a budget and create a business plan like we mentioned above.
You will also need to think about a number of different aspects such as the finances, marketing, legal compliance and the creative designs that all combine to make a successful business. The best place to start is researching and creating a business plan.
From here, you can think about your legal documents (like we mentioned above) to secure your business relationships.
Do I Need A Food Licence For My Food Truck Business?
Yes, you will require a licence to start a food truck business. The exact licence you will need will depend where in Australia you are, so be sure to check out your local regulations. For example, in Sydney, you will need to apply for a Mobile Food Vending Permit.
Further local regulations will also apply such as zoning laws and local government rules around food businesses in the area. Additionally, your business will also need permission to operate from the NSW Food Authority.
Prior to starting your business, it’s important to familiarise yourself with these requirements (or the relevant ones for your local area) and make a plan for compliance. Non-compliance could not only be considered illegal but may also pose a risk to the safety of your consumers due to the hygiene risks associated with handling food.
Register My Food Truck Business In Australia
Food trucks also need to be registered before they can begin business. The process to register your food truck business is the same as registering any business in Australia.
Registering your business will require you to provide all the relevant information, apply for the taxes that apply to you and pay a fee – this can all be done online. Once the application has been successfully completed and processed, you will receive an Australian Business Number (ABN).
Registering a business in Australia is essential for tax purposes and reporting obligations.
What Documents Do You Need To Start A Food Truck Business?
Having the right legal agreements for your business in place can be extremely useful in protecting your business from issues such as disputes and liabilities. It’s also a great way to secure your business relationships.
There are a number of legal documents you will need prior to starting your food truck business. We’ve summarised some of the key ones below.
You might need to hire employees to deal with the demanding nature of the food industry. If you are thinking of hiring staff, an Employment Agreement is necessary.
An agreement between you and your employees should cover:
- Duties and obligations of both parties
- Work hours and days
- Termination of the contract
Along with the above points, Employment Contracts can be adjusted to include anything else that is relevant to your unique business. Having the expectations of both parties in a formal, written agreement is the better way to start a working relationship.
It also provides the employee with confidence that you will take good care of them.
Supply Agreement For Food Trucks
Running a food business means you will likely need a supplier for your ingredients. A Supply Agreement is a contract between you and your supplier that puts the most crucial aspects of your arrangement into writing.
Usually, Supply Agreements include:
- The product been delivered
- Delivery dates and times
Supply Agreements not only address the details of delivery and the products themselves. They also cover what will happen if something goes wrong in the supply chain, which is essential in a highly unpredictable environment.
Having a Supply Agreement is particularly important if your supplies are coming in from overseas, as this carries higher levels of risks and obligations, such as customs and taxes.
Food Truck Terms and Conditions
Terms and conditions dictate the circumstances under which someone can enter or operate in a certain premises, whether this is online or in person.
Terms and conditions are often used in websites, allowing the owner of the website to set regulations for those that visit and use their website. This also limits their liability if something goes wrong while they use the site.
If you’re thinking of giving your food truck business an online presence, terms and conditions are a useful way to regulate activity on your site.
Non-Disclosure Agreements In The Food Industry
Non-Disclosure Agreements (NDAs) prevent others from leaking private information to an unauthorised third party. As a business owner, keeping the inner workings of your business secure is important as you don’t want competitors benefiting from all of your hard work and research.
There will be times, however, when exposing information about your business is required. This may be the case if you want to attract investors and they want to see your business plan, so they can see what they are putting their money into.
In this case, it’s always wise to get them to sign an NDA to uphold your privacy. Our lawyers can help you with a Business Plan Non-Disclosure Agreement to protect your business in its early stages.
In the food industry, NDAs can be particularly helpful for protecting things like recipes. In Australia, recipes cannot be patented. So, you can turn to Registering A Trade Mark or relying on copyright protection.
However, a NDA is also a popular option for protecting your business’ secret recipes.
Food Truck Business Plan
As we mentioned earlier in the article, a business plan is important to keep all your research and planning in one place. In addition to this, your business plan is one of the main documents investors will need to see before they decide to place their funds into your business.
Put simply, a business plan is like the blueprint of your business’ goals. It sets out what your food truck wants to achieve, specific milestones and the resources you need to achieve these goals.
Non-Compete Clauses In The Food Industry
When running a business in the competitive food industry, one of your biggest and most important considerations is how you can minimise or eliminate competition so you can attract the right customers.
In addition to NDAs and confidentiality clauses (which we’ll discuss below), Non-Compete Clauses are highly valued for food businesses. s
A Non-Compete Clause prevents a party from working directly with your business’s competitors. This could apply to employees, contractors or even service providers you engage.
They are commonly inserted into Employment Agreements so that an employee cannot work for your competitors or use the knowledge they obtained with your business to benefit another business in your industry.
It’s also a useful way of ensuring your valuable inside information doesn’t end up in the wrong hands, as your employees would have had full access to your trade secrets.
However, the Non-Compete Clause needs to be reasonable. While it can place limits on your ex-employees’ place or time of future employment, it cannot be unreasonable in its restrictive nature.
Confidentiality clauses are also used by businesses to ensure information that is meant to be private stays secure.
A confidentiality clause is a part in a contract that compels a party to keep certain information secure, and are often used in employment agreements.
For example, if you’re hiring staff for your food truck and want your recipes to stay within the business, confidentiality clauses can be inserted into their employment agreements.
What Laws Regulate Food Trucks And The Food Industry?
The Food Regulation 2001 is one of the laws that regulate how food businesses need to operate. Food business regulations set a standard for how food is to be handled, stored and cooked. It also covers other important aspects such as labelling and information.
Other important regulations to look out for include the:
Being compliant with these regulations are essential in running a legally compliant business – if you need help, reach out to us for a chat!
Protect Your Food Truck’s Business Name
Your business name is a part of your business’ identity and will be central to how the public identifies it. As such, you may wish to be the only one using a specific business name.
However, registering your business name doesn’t give you exclusive ownership of it. In other words, registering your business name doesn’t stop other people from using it as well.
If you’re looking to have complete ownership over your business name, then you should look into getting it trademarked.
An application will need to be completed with IP Australia. It’s a rather long process and we recommend getting in touch with our team of expert IP lawyers to help you through it!
Do I Need A Liquor Licence For My Food Truck?
Selling alcohol from your food truck will require a liquor licence. There are a number of different types of liquor licences. For example, if your food truck is only to operate during a certain or special event, you can look into getting a pop-up bar and events licence.
For most other food and beverage places that wish to serve alcohol, they usually require an on-premises licence. The type of licence you will need depends heavily on the specifics of your food truck business and location – be sure to do your research before applying for a permit.
You may need other types of licences to run your food truck in Australia – make sure you know which ones apply to you.
How Do I Get Funding?
Food trucks don’t have the same expenses as starting a brick and mortar restaurant. However, this does not mean it cannot be costly.
In fact, acquiring a physical food truck, ingredients, contracts, licences, training and marketing can all add up. Getting investors on board to help fund your venture is a great way to raise capital for your business.
There are also government grants and loans available for small businesses to help them get a smooth start. You can look online at the Grants and Programs Finder to find one for your business.
Do I Need A Dry Hire Agreement For My Food Truck?
A Dry Hire Agreement is used when equipment alone is rented out. You may find yourself needing to hire equipment for your food truck to cut costs.
Investing in equipment can be expensive and you may find it more cost efficient to simply hire out certain things – this is always a great idea, but it’s important to have a written agreement that lays out the details of your hire.
At its best, hiring equipment is an effective solution. However, if a dispute arises, it can be a frustrating and draining process. The best way to prevent this is by having an agreement in place beforehand that covers everything important.
There’s a lot to consider when starting your own food truck business! Don’t be overwhelmed – the right kind of help can make the process a lot smoother.
To summarise what we’ve discussed:
- Starting a food truck business require research and planning- it’s advisable to get a business plan together
- The licences and permits you need will depend on your location (this includes licences for serving alcohol)
- It’s important to look into getting all the right legal documents to protect your business
- Familiarise yourself and become compliant with any food regulations that apply
- If you want to protect your business name, consider getting it trademarked
- Raise funding for your business through investors or seek out grants
If you would like a consultation on starting your own food truck business, you can reach us at 1800 730 617 or email@example.com for a free, no-obligations chat.
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