Ever since I started my coffee van business in 2018, I thought, “Geez, wouldn’t it have been great to lease a vehicle and equipment and test this out first?”
Although considered one of the cheaper ways to start a food and beverage business, food trucks and coffee vans still come with a significant outlay. This often means purchasing expensive vehicles and equipment before really knowing what you need or want.
Luckily, there is an emerging trend in the mobile vendor industry: B2B vehicle/equipment leasing. This allows underutilised assets to be put to good use while letting aspiring vendors explore their own business concept before jumping fully in.
A Word of Warning: “Lease to Own” Schemes
“Food truck leasing schemes” have been around for donkey’s years. Primarily facilitated by manufacturers or finance brokers, these “lease to own” models can land you with hefty fees and “balloon payments” at the end of the lease. This puts immense pressure on you to succeed immediately and often leaves people frustrated and out of pocket.
The Alternative: Short-Term Rental
An alternative is to find an existing owner looking to rent out their vehicle on a short-term basis. This is a win-win but requires careful planning and legal contracts to mitigate risks.
Your Pre-Lease Checklist
Before signing a leasing agreement, ensure the following are in place:
- Your Own Credentials: You need your own ABN, Council registration, and business permits. (Note: Your local council will need to inspect the vehicle before issuing your registration).
- Public Liability Insurance: You must have your own policy to cover your business operations.
- A “Hire Agreement” Contract: This should outline obligations and include a schedule covering:
- Detailed equipment list/vehicle description.
- Hire fee, payment schedule, and period.
- Bond amount and insurance excess.
- Specific conditions (e.g., descaling the coffee machine).
- Detailed Handover Document: This should cover water tanks, generators, machine operations, and towing/hitching processes.
- Comprehensive Handover Session: Don’t just take the keys. Tick off every process, sight every piece of equipment, and sign the document together.
Pro Tip: Take photos and videos on the day of hire to ensure there is timestamped evidence of the condition of the equipment.
5 Tips for First-Time Lessees
- Commit to 3 Months: It takes at least 90 days to get a real feel for the industry.
- Verify Council Approvals: Ask to see the owner’s previous Council vehicle approval. While requirements vary by LGA, most follow the Food Safety Standards for mobile food businesses.
- Get Documentation: Ask for specific instructional videos for specialist equipment like grinders or espresso machines.
- Establish Support Lines: Understand if the owner is available for “on-call” technical questions during your first few shifts.
- Pre-fill Your Calendar: Get your business moving by securing bookings before the lease starts.
Start Taking Bookings from Day 1
Personally, I would love to see more people leasing food trucks and coffee vans. Many passionate people want to enter this industry, but good equipment and vehicles can cost upwards of $30-$40K, which is inaccessible for many. I love that leasing allows people to test-run their business concept (try before you buy, if you will), and test different equipment and vehicles. I often coach people to consider what type of vehicle and equipment will suit their needs, as different types of trading, locations, and business models will require different set-ups. Leasing can allow aspiring vendors to try different set-ups. For example, a vintage caravan coffee van may work for longer, larger jobs like a festival, but will not be suitable for small, quick jobs like auctions.
Conclusion
Leasing allows you to “try before you buy.” A vintage caravan might look great at a festival, but it won’t suit a quick-turnaround auction site. Leasing different setups helps you discover what business model actually works for you without the $30k–$40k entry price.
If you are interested in leasing a vehicle, try searching Facebook food truck/coffee van groups, or reach out to info@vendaly.com and we can connect you to our vendor network.