Operating a food truck is much more than just making delicious food. It is about finding the right vehicle, acquiring necessary legal permissions, choosing your staff and finally identifying locations to maximise sales.
Take for example the case of Delhi-based Dosa Inc, a food truck business started by Jyoti and her husband Satya in 2012. After eight years, the truck caters to a network of 50,000 households across Delhi, Gurugram and Noida. They also have to be alert about the legal permits and hygiene protocols even today.
Like most food truck ventures, Dosa Inc was also started after the couple realised they wanted to take their local (South Indian) cuisine to people but at a low investment and easy maintenance of the vehicle. Another advantage of opting for movable eatery was to cover as many localities as possible. This included both, residential and commercial areas.
Dosa Inc was established with an initial investment of Rs 10,00,000 and today it clocks revenue up to Rs 1.5 crores. They may sell their food items at lower prices compared to restaurants but they have still managed to churn profits and expand their business over the years. Read their full story here.
Knowing how tedious the process can get, Jyoti shares her experience of setting up a food truck in a hassle-free manner.
Infrastructure includes truck, base kitchen, staffing and locations.
The size and type of truck will depend on the cuisine you want to serve. Also, take into account the purpose of your truck, if it will be driven around or parked in a fixed location.
“The cost can be anywhere between Rs 5,00,000 to Rs 25,00,000. This will depend on the purpose of the truck, its cuisine and if it’s a second hand or a new truck. Our fully fitted out trucks have cost us Rs 10,00,000,” says Jyoti.
If opting for an old or second-hand truck, check for fitness certificate, registration, road tax receipt, and insurance. Refrain from purchasing really old trucks as they emit heavy pollution.
In the beginning, the couple had purchased a tempo traveller but soon realised it was bulky and couldn’t move with heavy equipment in it. So, they switched to a CNG-run TATA Ace. The truck is environment-friendly as it does not cause vehicular emissions. Plus, while crossing borders at Gurugram and Noida, they don’t have to pay the Green fee, which amounts to Rs 800.
Next is the base kitchen (is optional) where the majority of the heavy cooking and cleaning is done, this needs to be in a commercial location and can be in a quiet place with lower rents. Dosa Inc’s sambhar and chutney is prepared at the base kitchen.
Staff hiring depends on the size of the truck and the type of cuisine served. In the case of Dosa Inc, the founders multi-trained the staff. For example, the driver of the truck is also the cashier.
Location is the most crucial factor that determines the growth of your business. “Decide the location as per the purpose of your truck – do you intend to remain in one location or intend to move between locations. You will also need permissions from local authorities, residential buildings and cops to function. Do not forget to study the footfall and demand analysis of the location,” she adds.
Cost Break Up of Running the Truck
- Raw materials, packaging material, cylinder, electricity, etc: 25% COGS
- Staff salaries, accommodation, food for staff: 30%
- Rent of base kitchen rent and location: 15%
- Equipment and vehicle repair and maintenance: 10% (fitness/permits/insurance, and other wear and tear)
According to the FSSAI website, you will need the following licences and permits:
- Employer Identification Number: The Revenue department uses this number to recognise your business and collect the relevant taxes from you, and employees.
- FSSAI License: Needed only during registration, the license is needed if your turnover crosses Rs 12 lakh.
- Business License: This is needed to run a food business. Depending on the city and state, and scope of services given, you may be charged a portion of your total sales or an annual fee, along with the license fee.
- Vehicle License: You will require a truck and driver license. Depending on the width and weight of the vehicle, some states may need a commercial driver’s license to run the vehicle.
- Seller’s Permit: In some states, food truck owners require you to apply for a seller’s permit so you can buy food and other goods at wholesale prices without paying sales tax.
- Health Department Permit: The inspection and approval of your local health department will check if the quality of the food you serve is being maintained and under hygienic conditions.
- Fire Certificates: The fire department will inspect your food truck if you’re practising cooking equipment on board. Fire Department
- NOC for the kitchen is needed if it is over 90 sq meters in area.
- Vehicle permits and fitness: Most of these have to be renewed yearly.
- GST registration: This is needed once the turnover crosses Rs 20 lakhs
For each of the above-mentioned permits/licenses, you will need documents like PAN card, Proprietor’s KYC, some architect’s drawings of the kitchen, vehicle ownership related documents (for permits & fitness) and insurance.
Click here to know more.
All images are sourced from Dosa Inc
Edited by Yoshita Rao
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