Food truck due diligence

Due diligence on a food truck covers the same ground as any small-business purchase — financial records, contracts, registered liens — but the mobile, permit-dependent nature of the business means several checks matter more here than they would for a fixed-location restaurant. A buyer’s advisor should treat the permit file, the vehicle’s condition, and the assignability of the truck’s event relationships as the three items most likely to change the deal, not routine box-checking.

Verify the permit and licensing history directly with the authorities that issued it

Do not rely on the seller’s account of the truck’s permit standing — contact the municipality and the relevant public health unit directly to confirm the vending permit’s current status, any conditions attached to it, and its actual reissuance process for a new owner. Where the food-premises licence sits with the health unit and the vending permit sits with the municipality, as is common, both need separate confirmation, because clean standing on one does not guarantee clean standing on the other.

Search the personal property registry against the vehicle and the kitchen equipment

A food truck’s vehicle and its kitchen build are exactly the kind of asset that gets financed, and a registered lien against either does not disappear on a change of ownership. In Ontario, that means a search under the Personal Property Security Act; other provinces run their own personal property registries, and a buyer should search the one that matches where the truck and its owner are actually registered, not assume it mirrors Ontario’s system. An undisclosed lien found at this stage is grounds to revisit price or require payout at closing, not simply a paperwork fix.

Get the vehicle inspected by someone other than the seller’s mechanic

Have an independent inspection done on the vehicle’s drivetrain and, separately, on the cooking and fuel equipment’s safety condition — a generator, propane system or ventilation hood that fails inspection is not a minor item on a food truck the way it might be on a fixed kitchen, because the vehicle cannot legally operate at all until it passes. A finding here is not automatically a deal-breaker, but it needs to be priced or resolved before closing, not discovered by the buyer on the first day of ownership.

Confirm which contracts actually assign to the buyer

Request the commissary or base-kitchen agreement, if the truck relies on one, and confirm directly with the commissary whether it will consent to an assignment or requires a fresh agreement with the buyer. Do the same with any event or festival booking contracts: read the actual agreements, not just a calendar summary, to see whether they name the business or the individual seller, and whether the counterparty’s consent is needed to reassign them. A calendar full of bookings that cannot legally move to the buyer is worth far less than the same calendar with assignable contracts behind it.

Pull the food-premises inspection history, not just current standing

A snapshot confirming the truck’s food-premises licence is currently valid tells a buyer less than the actual inspection history behind it. Request the health unit’s past inspection reports, not just current status, to see whether violations have been recurring or isolated, and how quickly they were corrected when they occurred — a pattern of repeat findings on the same issue says more about how the business is actually run day to day than a single clean inspection on file at the moment of sale. Where the truck operates in more than one municipality or health-unit jurisdiction over a season, ask for the history from each one, since a truck can hold clean standing in its home jurisdiction while carrying an unresolved issue somewhere it only visits for festivals.

Confirm workplace-safety insurance standing if the truck has any employees

A food truck with even one or two paid staff beyond the owner carries the same workplace-safety insurance obligation as any other employer, and an unresolved arrears balance does not necessarily stay the seller’s problem once ownership changes. In Ontario, request a WSIB clearance certificate confirming the account is in good standing before closing; other provinces run their own workplace-safety insurance boards with a comparable clearance mechanism, so confirm with the one matching where the truck’s staff are actually employed. A truck run solely by its owner with no employees has little exposure here, but that should be confirmed directly rather than assumed from the truck’s small size.

What these findings actually mean when they show up

A permit that cannot be reissued, or that lands the buyer in a new lottery with no guaranteed outcome, is one of the more serious findings in this sub-sector because it can undercut the core reason the buyer is paying for the business at all. A vehicle that fails inspection is usually fixable at a defined cost, which makes it a pricing conversation rather than a walk-away trigger on its own. Event contracts that turn out to be personal to the seller reduce the calendar’s value without necessarily killing the deal — the response in each case should be proportionate to what was actually found, not treated as automatically fatal.