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Easiest metros for starting a food truck

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Easiest metros for starting a food truck

There’s nothing like a food truck for quick bites, reasonable prices, and convenience—which helps to explain how the food truck industry came to reap more than $2 billion a year.

Food trucks began in the 19th century with a covered wagon selling lunch food to journalists in Providence, R.I., and took off after World War II in growing suburbs where restaurants were rare. More recently, in 2008 a chef named Roy Choi started selling $2 Korean barbecue tacos from a truck on the streets of Los Angeles, jump-starting the modern food truck industry. Today, city governments have gotten involved with tangled bureaucracies, tedious processes, high fees, and more.

Industry data show food truck revenues from 2011 to 2016 grew at an annual rate of 7.9%. The foods being sold represent the diversity of the truck owners: In Chicago alone, four out of five local food trucks are minority-owned small businesses. But vast differences in local regulations mean trucks are more popular and more successful in some places than others.

Some market research has predicted that competition and unfavorable regulatory conditions in some cities could force food truck growth to slow to a halt. While food trucks may seem like simple operations, owners pay for permits, maintenance, and insurance; find parking spaces and storage spaces; prep kitchens and get employee licenses. In food-truck-centric New York City, for example, the number of street food vending permits being issued for carts and trucks has hardly changed in the last 30 years—and the permit for the most expensive hot dog stand in the city (not even a truck, mind you) runs more than a quarter of a million dollars.

One estimate says opening a food truck will take several months and can cost more than $125,000. In some places, restaurateurs complain that food trucks threaten their business, but data have shown that high growth in local mobile food trucks is linked to higher growth in local restaurant and catering businesses.

Research shows the best U.S. cities for food trucks are Portland, Denver, Orlando, Philadelphia, and Indianapolis. The five most difficult cities are Boston, Washington D.C., San Francisco, Minneapolis, and Seattle.

Stacker compiled a gallery of the easiest metros for starting a food truck in using a ranking by the U.S. Chamber of Commerce’s Food Truck Nation, which surveyed hundreds of food truck owners. Metros are ranked by an index that factors in the cost to start, restrictions on location, and the regulatory cost to operate food trucks.

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#20. Boston, MA

- Obtaining permits and licenses rank: #20 ($17,066 registration fees and permits)
- Restrictions rank: #7
- Operating rank: #20 ($37,907 annual fees)

Among the cities Food Truck Nation looked at, Boston ranked worst for starting a food truck. Food trucks must install GPS devices to report their location every five minutes, and Boston requires 32 procedures to start a new truck. Owners pay about $17,000 to the city government, mostly for zoning permits. That said, the online permitting portal and food truck start-up guide are easy to navigate.

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#19. Washington D.C.

- Obtaining permits and licenses rank: #19 ($2,720 registration fees and permits)
- Restrictions rank: #17
- Operating rank: #19 ($29,382 annual fees)

Starting up a food truck in the nation’s capital means high start-up fees, a size limit on trucks, and a vendor badge requirement for each worker, also with associated fees. Vendors say the city does not offer enough public spots in its monthly lottery and say they are kept from high-tourist areas such as the National Mall on weekends.

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#18. San Francisco, CA

- Obtaining permits and licenses rank: #17 ($3,481 registration fees and permits)
- Restrictions rank: #18
- Operating rank: #18 ($28,642 annual fees)

San Francisco requires permits and licenses at a minimum cost of nearly $4,000. Each permit is valid for one location, so moving to another vending spot requires going through the approval process again. Truck owners must notify competing businesses within a specified radius that they intend to set up shop and then get those businesses’ written authorization.

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#17. Seattle, WA

- Obtaining permits and licenses rank: #4 ($6,211 registration fees and permits)
- Restrictions rank: #20
- Operating rank: #14 ($32,076 annual fees)

In Seattle, proximity restrictions mean no food truck can operate within 50 feet of a restaurant but must operate within 200 feet of a bathroom with an agreement with its owner for access. The online permitting system is frequently inoperable, inaccurate, and inflexible according to food truck owners. Even changing menus is difficult, and trucks are prohibited from preparing ingredients on board.

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#16. Minneapolis, MN

- Obtaining permits and licenses rank: #18 ($1,674 registration fees and permits)
- Restrictions rank: #15
- Operating rank: #9 ($31,694 annual fees)

It is relatively easy to obtain permits and licenses in Minneapolis, but the city ranks at the bottom in terms of restrictions. A dozen proximity rules govern distance from restaurants, festivals, residential buildings, and more. Throughout the state, food trucks cannot vend in one location for over 21 days straight, nor stay open past midnight. Also, downtown Minneapolis’ combined taxes on prepared meals are 10.775%, the highest among the nation’s 50 largest cities.

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#15. Columbus, OH

- Obtaining permits and licenses rank: #16 ($1,560 registration fees and permits)
- Restrictions rank: #16
- Operating rank: #5 ($20,820 annual fees)

In Columbus, starting up and running a food truck is relatively easy. The troubles lie in zoning, the use of public right-of-way, and regulations such as keeping a space of 25 feet beyond the truck free of refuse. Locals say some of the best food trucks are run by immigrants from Latin American nations offering cuisine from their homelands.

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#14. Phoenix, AZ

- Obtaining permits and licenses rank: #7 ($1,540 registration fees and permits)
- Restrictions rank: #19
- Operating rank: #2 ($25,187 annual fees)

One of the trickiest regulations for operating a food truck in Phoenix is the distance that must be kept between two food trucks on the same side of a street which is about two city blocks. Even in such a sprawling city, the restriction is significant. Other localities nearby require peddler permits for vending at a private event even just once a year or require fingerprint cards for each employee.

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#13. Chicago, IL

- Obtaining permits and licenses rank: #15 ($2,713 registration fees and permits)
- Restrictions rank: #9
- Operating rank: #17 ($32,461 annual fees)

Chicago’s food truck scene is in trouble, vendors say, because of onerous regulations, an unfriendly business environment, and high taxes. To obtain a permit, owners must first meet with a business consultant and fill out an extensive pre-application form. Every menu change triggers an inspection. No food truck can operate within 200 feet of a restaurant, grocery store, or even vending machine. Only 3% of the downtown Loop is legally open to food truck operators, a truck cannot remain in one location longer than two hours and the average food truck undergoes about 15 inspections a year.

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#12. St. Louis, MO

- Obtaining permits and licenses rank: #11 ($1,204 registration fees and permits)
- Restrictions rank: #11
- Operating rank: #16 ($26,191 annual fees)

In St. Louis, start-up fees are low, and the city’s website is easily navigable. But many agencies are involved, and the process is poorly defined and understood. Also, each of the over 100 townships in the St. Louis area has its own fees and permitting processes. In the city, trucks are required to have a flashing signal device to indicate transactions underway.

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#11. Raleigh, NC

- Obtaining permits and licenses rank: #10 ($848 registration fees and permits)
- Restrictions rank: #14
- Operating rank: #8 ($22,827 annual fees)

Running a food truck in Raleigh means complying with a sizable number of proximity limits that restrict the public right-of-ways that can be serviced. Also, there is an array of regulations across the metro area, adding costs. Government support, zoning, licensing, and taxes all cause problems, operators say.

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#10. Nashville, TN

- Obtaining permits and licenses rank: #12 ($1,343 registration fees and permits)
- Restrictions rank: #12
- Operating rank: #11 ($29,579 annual fees)

Nashville’s operating costs are average, and interactions with city offices are manageable. What is unusual is a 150-foot restriction around competing restaurants, and parking closer to a restaurant requires permission from the owner. Neighboring suburbs require more permits.

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#9. New York City, NY

- Obtaining permits and licenses rank: #14 ($1,075 registration fees and permits)
- Restrictions rank: #5
- Operating rank: #15 ($28,085 annual fees)

A cap on the number of licenses available for food trucks in New York City means getting a two-year vending permit takes 15 years on a waiting list or paying some $25,000 on the black market. No food truck can vend from metered parking, which closes off most of Manhattan, and permissible spots must be 10 feet away from a crosswalk and 20 feet from a building entrance.

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#8. Los Angeles, CA

- Obtaining permits and licenses rank: #13 ($2,439 registration fees and permits)
- Restrictions rank: #8
- Operating rank: #10 ($29,096 annual fees)

In Los Angeles, food trucks cannot operate on public property but there are plenty of private lots. Relatively few proximity restrictions allow vendors to operate in busy areas, such as downtown Los Angeles. But a food truck must pay multiple fees and get multiple permits as it roams the metro area. In West Hollywood, trucks must move every hour to a different street.

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#7. Austin, TX

- Obtaining permits and licenses rank: #6 ($1,139 registration fees and permits)
- Restrictions rank: #10
- Operating rank: #12 ($22,168 annual fees)

Opening a food truck in Austin is simple, with relatively few steps and relatively low fees. But the inspection process is onerous. Inspections are long and afterward, the approval process can be slow. The city charges property taxes even for trucks based elsewhere.

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#6. Houston, TX

- Obtaining permits and licenses rank: #9 ($1,788 registration fees and permits)
- Restrictions rank: #6
- Operating rank: #7 ($22,746 annual fees)

Houston’s food truck operators face regulations that can cut into their business. Street parking is prohibited for vendors, and food truck owners must pay the city more than $200 a month as an electronic monitoring fee. To operate on private property, truck owners must have a notarized letter saying they have bathrooms on-site and another letter certifying they have permission from the property owner. The letters must be obtained a year in advance.

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#5. Indianapolis, IN

- Obtaining permits and licenses rank: #2 ($590 registration fees and permits)
- Restrictions rank: #13
- Operating rank: #3 ($20,435 annual fees)

Indianapolis is welcoming to the food truck business, with the lowest start-up fees and few trips to regulators. But trucks cannot operate within 1,000 feet from a school in session, and information on the city’s website is scattered across several online locations and often written in dense terminology.

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#4. Philadelphia, PA

- Obtaining permits and licenses rank: #3 ($1,778 registration fees and permits)
- Restrictions rank: #1
- Operating rank: #13 ($25,292 annual fees)

Philadelphia’s rules are among the best. Few regulations apply, and enforcement is mostly focused on food safety and sanitation. But inspections can occur 10 to 30 times a year. Approvals to operate in the most popular spots can mean years on a waiting list, and much of Center City in downtown Philadelphia is off-limits.

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#3. Orlando, FL

- Obtaining permits and licenses rank: #5 ($629 registration fees and permits)
- Restrictions rank: #4
- Operating rank: #4 ($19,621 annual fees)

Orlando is one of the best places to start up a food truck business. It has one of the least expensive permits and low operating fees, and the online site is easy to navigate. But traveling around the metro area requires additional permits and inspections.

 

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#2. Denver, CO

- Obtaining permits and licenses rank: #1 ($811 registration fees and permits)
- Restrictions rank: #2
- Operating rank: #6 ($22,751 annual fees)

Starting a food truck business in Denver is easy and straightforward, with few procedures and easily accessible information online. One hassle is a requirement by the Denver Fire Department that truck owners install new fire suppression systems and change their gas lines and propane tanks. Also, trucks cannot operate in and around the busy 16th Street Mall.

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#1. Portland, OR

- Obtaining permits and licenses rank: #8 ($1,877 registration fees and permits)
- Restrictions rank: #3
- Operating rank: #1 ($5,410 annual fees)

Portland takes top honors as the best city for food trucks, which are a fixture of local culture. It has no proximity restrictions or sales taxes, and it sets aside several parking lots for the exclusive use of food trucks. The city’s Economic Development Plan specifically incorporated mobile food vendors as the key to promoting growth and deterring blight downtown. Even so, owners complain about expensive permit fees and a requirement for a 50-gallon water tank, even if only used for hand-washing.

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