How Much Does a Food Truck Cost?

Food trucks can be a great way to get started in the restaurant business. They require less capital than a brick-and-mortar restaurant and give you enough flexibility to bring your food directly to customers.

But just like any other restaurant, you need to understand how much capital you’ll need to get your business up and running. So, how much does a food truck cost? Let’s find out.

What is the average cost to open a food truck?

The average cost of opening a food truck falls between $50,000 and over $150,000. The actual capital needed for this type of restaurant depends largely on the truck you buy and other factors, like the kinds of dishes you want to serve and the level of customization your truck needs.

Food truck costs to consider

If you want to open a food truck, you must be aware of the costs involved. Aside from buying a vehicle and customizing it, you also have to take into account expenses for licenses and permits, parking and storage, and fuel and maintenance.

1. Food truck

Your food truck’s price takes up a huge chunk of your capital. The initial investment also varies depending on the type of vehicle you purchase. Buying a new and fully-fitted truck can set you back around $50,000 to $175,000, while a used one costs between $30,000 and $100,000.

A new truck allows for a kitchen tailored to your specific menu and workflow needs. Plus, it also means you’re less likely to face immediate maintenance issues, allowing you to allocate funds to grow your business.

Used trucks, on the other hand, are more affordable, and since they’re already built, you can start operations sooner. Of course, older trucks may come with wear and tear, leading to repair costs that may arise before you’ve even profited.

You also have the option to rent a food truck. However, the cost of renting a food truck falls around $2,000 to $3,000 per month. This can reduce initial expenses and offer enough flexibility to test your business concept before being tied down by ownership.

One major disadvantage is that rental agreements might limit customization or impose usage constraints, which can affect your operations. Monthly payments also don’t contribute to ownership, and over time, rental costs can surpass the price of purchasing.

2. Kitchen equipment and customization

For efficient operations, you’ll need to stock your food truck with the right kitchen equipment. Common appliances include ovens, grills, fryers, and refrigerators. You also have to consider sinks and storage units for dry goods and supplies.

Beyond basic equipment, additional customizations, such as fireproofing, may be necessary. You may also need to implement serving windows and specialized cooking stations, including ventilation systems, for proper airflow.

Expect to shell out a minimum of $25,000 on kitchen equipment alone. The amount can go as high as $100,000 when you include customization.

You can cut costs by buying second-hand appliances or leasing them. When you’ve started earning enough, you can prioritize buying the most critical equipment and add more as your business grows.

3. Licenses and permits

You’ll need a business registration, also known as a Mobile Food Facility Permit, which allows you to operate legally in your area. The actual cost varies by location, ranging from $200 to $500.

And you’ll also need truck permits from the health and fire departments to ensure your food truck meets safety and health standards. Additionally, you must file for parking permits so that your food truck can operate in designated areas.

All in all, set a budget of around $28,000 for licenses and permits. Check with your local health department, Chamber of Commerce, and Department of Motor Vehicles (DMV) so that you can calculate the exact costs.

4. Initial inventory and menu supplies

Your initial inventory will depend on your food truck idea and how complex your offerings are. For instance, a burger food truck will have different inventory needs compared to a gourmet taco truck. As such, you’ll need to estimate the cost of ingredients based on your specific menu.

A good rule of thumb is to allocate around $1,000 to $2,000 for initial inventory. This budget should cover your first month’s worth of ingredients, including proteins, vegetables, spices, and any specialty items unique to your cuisine. Plan for approximately 10% to 15% extra inventory so you’re prepared for recipe variations or unexpected demand, which is a good problem.

Manage food costs through proper menu engineering. As you design your menu, analyze ingredient costs and preparation time on top of the potential selling price for each menu item.

Additionally, keep track of stock levels each day to avoid waste and overspending. You should also train your staff to store food correctly to extend its shelf life. For example, storing fresh produce in sealed containers and maintaining proper refrigeration temperatures can help prevent spoilage.

5. Parking, storage, and commissary kitchens

Parking, storage, and commissaries are essential aspects of food truck operations. First, you’ll need a secure location to park and store your truck when not in service. Monthly rental fees can range anywhere from $300 to $1,000, depending on your location and the amenities provided.

Then, there’s the commissary kitchen. Many states, like California and Texas, require food trucks to use a dedicated place for food preparation, cleaning, and storage. These commercial spaces provide the necessary infrastructure for mobile food businesses.

Commissary rental costs typically start at $250 to upwards thousands of dollars monthly. Some commissaries offer additional services like equipment rental, ingredient storage, and waste disposal, which can help simplify operations and maintain compliance with local health regulations.

Make sure to look for commissary kitchens and parking facilities that offer the services you need at prices within your budget. You can also opt for shared kitchen spaces, which can be more affordable than private rentals.

6. Insurance and liability coverage

Given the mobile nature of a food truck business, accidents can occur, leading to property damage or bodily injury. For example, serving food outdoors can introduce the potential for foodborne illnesses.

That’s why you must invest in business insurance to cover claims related to such incidents. You’ll need general liability insurance, which covers third-party claims of bodily injury, property damage, and personal or advertising injury.

For example, if a customer slips near your food truck and gets injured, this policy helps cover medical expenses and legal fees. The annual premium typically ranges between $385 to $1,900.

Since your business operates on wheels, commercial auto insurance for the truck is essential. It covers damages from accidents, theft, or vandalism involving your food truck. Expect to pay around $2,500 to $4,200 for the annual premium.

Then, there’s workers’ compensation insurance, which covers medical expenses and lost wages if an employee is injured on the job. Costs are influenced by the number of employees, payroll size, and the nature of work, but it’s around $78 per month or $940 annually on average.

Make sure you get proper coverage by assessing potential risks specific to your operations. For instance, if you serve hot foods, consider additional fire-related insurance that protects against kitchen equipment malfunctions or potential grease fire incidents.

Consult with multiple insurance agents and compare quotes to find the best price. As your business grows, don’t forget to adjust coverage as needed.

7. POS systems and more

An efficient Point of Sale (POS) system is crucial for managing sales in any restaurant, including food trucks. It tracks all transactions and sales while helping you manage inventory. Investing in a reliable POS system can enhance customer experience and boost efficiency.

Expect initial restaurant POS system costs to range between $2,000 and $20,000, depending on the hardware, software, and additional accessories your food truck needs. Afterward, you’ll have to account for monthly software subscriptions.

You may also need customer-facing displays to take orders faster and reduce long wait times during busy hours. Some POS providers have these as add-ons for around $200 to $800 per device.

8. Labor and staffing

While you can be more hands-on with your food truck, you still need at least one to two employees to operate successfully. This often includes a cook to prepare the food and a server to take orders and interact with customers.

The average hourly wage for food truck cooks in the U.S. is approximately $16.03, while servers usually earn around $11.96 per hour. Aside from wages, employers must account for payroll taxes and benefits.

For instance, employers are responsible for contributing 6.2% to Social Security and 1.45% to Medicare based on the employee’s wage. There are also other benefits to consider, like health insurance and retirement plans.

Use payroll software to manage wages, tips, overtime, and tax deductions easily. This way, you can process payroll faster while reducing the risk of costly errors.

9. Marketing and branding costs

Make sure people know where your food truck is through effective marketing and branding. Investing in your food truck’s visual appeal helps attract customers. You can design and apply a full truck wrap, which costs between $2,000 and $5,000.

There are also menus, signages, posters, and flyers to consider, which can add at least $1,000 to your marketing and branding costs.

And don’t forget about digital marketing, which is a cost-effective way to promote your food truck online. Estimated monthly costs include paid social media ads, with a minimum budget of $7 and $5 per week for Facebook and Instagram.

Investing in a website can also lend credibility to your business. Professional development can range from $500 to $5,000. You can save money by hiring freelancers rather than agencies to create your website.

Make the most of your marketing budget by posting photos and promotions on social media daily. Don’t forget to constantly share location details as well.

“There’s no doubt all the food trucks and carts need to serve amazing food,” Chad Reynolds, co-founder of YXE Street Food, said in an interview with 7shifts CEO Jordan Boesch. “But food aside—a truck must be locatable. They need to be constantly engaging with their customers on social media and addressing any inquiries and/or bookings.”

10. Fuel and maintenance

Fuel costs can vary based on how much you drive and fuel prices. Currently, retail gasoline price falls at around $3.20 per gallon. If you get around seven to eight miles per gallon, you can expect fuel expenses of around $350 to $450 monthly.

Aside from fuel, you also have to budget for maintenance right at the start of your business. Allocate 1% to 3% of your truck’s annual value for maintenance and repairs.

Let’s say your truck’s value is approximately $150,000. Your target maintenance budget should be around $1,500 to $4,500 annually. Divide it by 12 to get a monthly allocation of $125 to $375, which you should set aside for potential repairs along the way.

Preventive maintenance is key to reducing long-term expenses. Perform routine checks on your vehicle and kitchen equipment to identify potential issues early.

Always follow the manufacturer’s recommended maintenance schedule for both the truck and its equipment. Lastly, ensure all staff members are trained to operate equipment correctly, reducing the risk of misuse and damage.

Minimum capital needed to open a food truck

You can start with around $46,700, while a more equipped setup can cost up to $100,000 or more. The exact amount depends on factors like whether you buy or rent a truck, the type of food you serve, and how much customization your kitchen needs.

A brand-new truck with custom kitchen equipment will cost more while renting a used truck and keeping a simple menu can help reduce startup costs.

Truck financing options

Consider truck financing options to help get your business off the ground. Many lenders offer equipment loans where the food truck itself serves as collateral. Interest rates can range between 5% to 6%, depending on the lender and your credit score.

Another option is through the government-backed Small Business Administration (SBA) 7(a) loan program. It’s designed to help small businesses, including food truck owners, get funding with lower interest rates and longer repayment terms compared to traditional business loans.

Typical SBA loans cover $50,000 to as much as $5 million. Repayment terms can go up to 10 years for working capital and 25 years for real estate (if applicable). Take note of a 10% to 20% down payment, a credit score of 680 or higher, and a strong business plan showcasing the potential profitability of your food truck.

You can also choose business lines of credit, which function like a credit card. This means you borrow only what you need and pay an average interest of around 7.65% to 9.15% on the used amount.

When can I expect ROI after opening my food truck?

The ROI for a food truck usually takes between 18 months and 24 months, depending on sales, expenses, and competition. Where you park your food truck can also make or break your business. Be sure to scout high-traffic areas, like downtown spots, festivals, and events to boost sales.

Full speed toward food truck success

Starting a food truck business lets you bring your culinary vision to life while keeping startup costs lower than a traditional restaurant. Knowing how much you’ll have to spend upfront and what recurring expenses to anticipate can help you create a solid business strategy.

Managing your food truck’s payroll and labor costs is just as important as tracking inventory and fuel expenses. With 7shifts, you can make schedules easily, track labor costs in real-time, and simplify team communication, all in one app. This way, you can focus on launching and driving your business to success.