Becoming a food vendor is a good way to work on your own schedule, set your own hours and be your own boss. At first glance, the concept of a vending cart or concession stand may seem like a simple venture, but as with any other business startup, there is some red tape involved. Make sure that you are properly informed before you begin vending from your cart. This includes filling out all of the correct paperwork and following all of the rules and regulations that have been set down for food vendors at both the state and county levels. The laws do vary by state, so be certain to check out all of the regulations set down by both your state and the county in which you will be vending. Below are some of the more common laws that you will have to follow with regards to permits, insurance and zoning.
In This Article, You Will Learn:
- How to obtain the proper permits for your food concession stand.
- What type of insurance is best for your concession business.
- How to determine the zoning of areas and where it is appropriate to sell.
Since many vendors are selling food from their cart or a trailer, it is important to remember that you will need to obtain permits in every county in which you intend to sell food. The fines for failing to have the appropriate permits can be very large, and it is worth the extra time and dollars to ensure that you have the appropriate permits prominently displayed.
Obtain an EIN. You will need to get is a sales tax account number and possibly an Employer Identification Number, or EIN. The sales tax account number is provided by the state’s Department of Revenue and the EIN is obtained through the US Department of Treasury.
Get an RFE License. A retail food establishment license or RFE for short is provided by the health department for the respective county. You will need to apply for these permits in each of the counties you plan on vending. Before obtaining the license, you must pass a basic health inspection of your cart, trailer or stand. To see what permits and licenses your county requires check here.
Pass a fire safety inspection. Depending on your state’s rules, you may also be required to pass a fire safety inspection. The best way to find out if you will need a fire inspection is to ask your health inspector when they come to inspect your establishment.
In general, regulations that apply to restaurants apply to concession stands and food vendors. However, there are a few exceptions to these rules. Some states allow the vending of hot coffee products without the need for and RFE license, but if iced coffee is sold, the license must be obtained. Prepackaged and uncut food may also be exempt from an RFE license as long as there are not samples being distributed. But if you are handing out samples, you will need to obtain an RFE license.
It is safe to assume that if you will be preparing or directly handling the food that you are serving to customers, you will have to pass a health and safety inspection. Each state and county can have different regulations with regards to which foods will require a health inspection, so it is important to read over them carefully.
Not every state requires insurance on a concession cart, so talk to a local insurance agent to be certain whether or not insurance is legally required. If it is required, make sure that you purchase all of the insurance necessary. Even if insurance is not required by your state, it is a good idea to have insurance on your cart, trailer or stand to protect your assets in case something happens. Look into purchasing the following types of insurance for your business:
- Property Insurance– This insurance will cover your cart or stand and all of the equipment and supplies within it. You can choose basic insurance, which will cover weather damage and acts of God, or broad form, which will allow coverage for riots or civil commotion, good when vending in areas that are near sports arenas or in areas where there are a lot of bars.
- Commercial Car Insurance– If you have a trailer, you will need to purchase this insurance, as it is federal regulation for all transportation vehicles to have insurance on them.
- Liability Insurance– This will cover you in case a customer is injured on your property. The liability becomes slightly more nebulous with mobile carts and kiosks, but it is a good idea to have coverage in case someone claims they were hurt on your premises.
When purchasing property insurance, most companies have the option of reimbursement as either cash value or reimbursement cost. The cash value insurance will reimburse you for the cost of the property and equipment after depreciation is taken into consideration. Reimbursement insurance will cover the cost to replace, fix or rebuild damaged or stolen property without considering depreciation.
Before you pick your favorite spots for selling, it is important to know the zoning laws in the area. Typically, stationary concession stands must be built in a zone that is designated for commercial businesses. Vending carts and trailers, while they are not stationary, must also follow zoning regulations as well. In most residential areas, it is illegal for a vendor cart to be stationed in the neighborhood, and it is wise to follow these regulations as an angry home owner can get you into a lot of trouble.
Many outdoor malls and stadiums also have some policies in place of their own about outside vendors and where they can sell food. Before you decide to set up shop, find out what the regulations are from the property managers of the stadium, park or mall. Taking the extra time before you start selling will ensure that you have a good relationship with your vendor neighbors.