A food delivery business is a very lucrative endeavor especially in this post-pandemic age, with revenue expected to attain US$29,222 million in 2024 at a CAGR of 5.1%.

Aside from being a lucrative endeavor, it also presents any willing entrepreneur with the opportunity to make an impact in the community by supporting small food businesses and providing residents with flexible meal options. These businesses are known to also help restaurants grow their reach beyond foot traffic.

When you start this business, note that you will be coming against some well-known players in the market, like Uber Eats, GrubHub, and DoorDash. Nonetheless, your local connections and partnerships could offer a competitive edge with a more appealing commission and delivery fees.

Have it in mind that starting a food delivery business comes with lesser challenges when compared to certain other businesses. Note that you can easily align with local restaurants, cafes, and food outlets that are willing to deliver their food to customers.

To start a food delivery business, you will be expected to fulfill various legal formalities. While the licenses will vary based on your location and services, note that these legalities ensure that your business keeps running smoothly and stays on the right side of the law.

Licenses Required for a Food Delivery Business

  1. Business License

To be considered a business in the United States, you will be expected to register as a legal business entity. This will ensure you avoid personal liability in case someone sues your business for any reason. New business owners are always advised to register their business as an LLC or as a Corporation. However, the LLC remains the most commonly used business structure in the United States.

Acquiring a business license from the city or county office will entail filing an application and paying a statutory licensing fee which costs around $50-$500 for LLC. Also, note that you would need to register your business with the state or local government to obtain a federal tax identification number and other additional legal documents as well as tax benefits.

  1. Food Licenses

If you will be making the meals yourself, then you may need a Food service license. A food service license certifies that a business or person meets all food preparation, storage, and safety regulations, and they have been granted a license to sell food.

Note that this license ensures that your business is in accordance and up-to-date with the United States food safety laws. Most often, this license will cost around $100-$1000 and need periodical renewal. Depending on the locality and region of your food delivery business, you may also be expected to get a food handling permit, food-vending license as well as a general business license.

The Food Handler Certification is noted nationally as a food safety course that can be taken with an instructor or online. You may also be expected to obtain a ServSafe Manager Certification if you are the primary operator of your business.

  1. Certificate of Occupancy

If you are making the foods you deliver to clients, you may need a certificate of occupancy. This license shows that the building where your food business is situated has scaled its final inspection and has been considered safe to operate in. To obtain a certificate of occupancy, note that your location will have to be inspected by your local building or zoning department.

To make arrangements for this appointment, search your state’s name plus the term “certificate of occupancy” in an online search engine to obtain all necessary information on your state government’s website. Also, note that this certificate may also include a city and fire permit often provided by your local fire marshal.

  1. Tax Identification Number

To run a food delivery business in the United States, you will be expected to get an Employer Identification Number EIN. Have it in mind that this number is critical to register for state and federal taxes. It more or less tells the federal government that you are an employer and provides you with a tax ID.

With this number, you are permitted to hire employees and have them on a legal payroll. Also note that your state will make available an employer identification number that is different from your federal number, and helps legitimize your business’s standing.

To obtain an EIN, you will have to visit the IRS’s website and comply with the application process listed there. Ensure to apply as early as possible especially since it can take a while. You can also fax, mail, or call the IRS to submit your application

  1. Building Health Permit

You will need a building health permit if you intend to prepare the meals delivered to your clients. This permit shows that your food business building and practices comply with sanitation regulations. You will only require a building health permit if it’s a new building.

Howbeit, a good number of places in the US may require it for older buildings to ensure a sanitary dining environment. Have it in mind that this permit is issued by your local government. To maintain this permit, your location will be subject to routine inspections.

  1. Sign Permit

You might need a sign permit because it allows you to display or change permanent signage outside your business building. In many places in the US, signage size, brightness, and location are regulated and will have to be approved before you mount. Acquiring the permit shows that you have met the standard and codes necessary and can go ahead with adding the sign.

To apply for a sign permit, visit your local county government’s website for the steps and application. You may be expected to present a scale drawing of the signage, or even submit variations for approval. If you intend to include lighting in your signage, you may also have to provide the wiring and circuit plans.

  1. Insurance Policy

It is also crucial you acquire insurance as per your state requirements. Consider speaking with an insurance broker or company to note the general liability insurance that aligns with your state’s guidelines. In addition, you may also be expected to get workers’ compensation insurance for your employees.