A practical LOI framework built for food truck acquisitions — covering purchase price, asset schedules, permit transfer contingencies, and owner transition terms before you enter due diligence.
A Letter of Intent (LOI) is the foundational document that moves a food truck acquisition from informal conversation to a structured deal. In food truck transactions, the LOI does more than state a price — it defines which assets are included (truck, equipment, brand, social accounts, catering contracts), establishes contingencies around permit and health license transferability, and sets the tone for how due diligence will unfold. Because food truck businesses often carry informal financial records, high owner dependency, and jurisdiction-specific licensing complexity, a well-drafted LOI protects both sides by forcing early alignment on the most contentious issues before attorneys draft a formal purchase agreement. Most food truck deals close between 1.5x and 3x EBITDA, and the LOI is where that multiple gets anchored. Whether you are an aspiring owner-operator acquiring your first truck or an established food service operator adding a mobile catering unit, use this template and guide to draft an LOI that reflects the real economics and operational realities of the food truck industry.
Find Food Truck Business Businesses to AcquireIdentification of Parties
Clearly name the buyer (individual or acquiring entity) and seller (individual owner or business entity). In food truck deals, sellers are frequently sole proprietors or single-member LLCs, and the operating entity name may differ from the trade name or truck brand. Capture all of them.
Example Language
This Letter of Intent is entered into as of [Date] by and between [Buyer Legal Name] ('Buyer') and [Seller Legal Name], operating as [Trade Name / Truck Brand Name] ('Seller'). Seller is the sole owner of the food truck business operating under the name '[Truck Brand],' including the vehicle identified as [Year/Make/Model, VIN], all associated kitchen equipment, intellectual property, social media accounts, catering contracts, and goodwill as further described herein.
💡 Confirm whether you are buying assets from an LLC or from the individual owner directly. This matters for permit transfers — in many jurisdictions, health permits and commissary agreements are issued to the individual, not the entity, meaning a new application may be required regardless of deal structure.
Purchase Price and Consideration Structure
State the total purchase price and break it into components: hard assets (truck and equipment), intangible assets (brand, social media, recipes, catering contracts), and goodwill. Food truck deals commonly include seller financing on 10–20% of the purchase price, particularly when tied to permit transfer milestones or owner transition support.
Example Language
The total proposed purchase price is $[Amount] ('Purchase Price'), allocated as follows: (i) $[Amount] for the food truck vehicle and all installed kitchen equipment; (ii) $[Amount] for intangible assets including the trade name, menu IP, social media accounts, and catering contracts; and (iii) $[Amount] for goodwill. Buyer proposes to fund the acquisition through a combination of [SBA 7(a) financing / personal equity / other], with a seller note of $[Amount] at [X]% interest over [X] months, subject to successful transfer of all material permits and licenses.
💡 Anchor the hard asset value to an independent equipment appraisal and a mechanical inspection of the truck. Sellers often overvalue goodwill when a strong personal brand exists. If the social media following is tied to the founder's personal account, push to reduce the goodwill allocation and build in an earnout instead.
Included and Excluded Assets
Define precisely what is and is not included in the sale. Food truck deals require granular asset schedules because the business may include one or more vehicles, commissary relationships, branded merchandise, event deposits, and social media accounts that the seller may want to retain.
Example Language
The sale includes, without limitation: (i) the food truck vehicle ([Year/Make/Model, VIN]) and all permanently installed cooking, refrigeration, and generator equipment; (ii) all smallwares, serving equipment, and branded packaging inventory as of closing; (iii) the trade name '[Truck Brand],' logo, website domain, and all associated social media accounts and followers; (iv) all transferable catering contracts and event booking deposits; and (v) supplier contacts and existing vendor relationships. Excluded from the sale are: personal bank accounts, any non-transferable municipal vending permits (to be replaced by Buyer), and Seller's personal vehicle not used in operations.
💡 Get a signed, dated inventory of all physical equipment before LOI execution and attach it as an exhibit. Sellers sometimes remove smallwares, POS hardware, or branded items between LOI and closing. Clarify whether event deposits held by the business belong to the buyer or seller at close.
Due Diligence Period and Access
Define the length of the due diligence period and what information Seller must provide. In food truck acquisitions, due diligence must cover POS data, bank statements, health inspection history, mechanical records, and permit status — all of which require proactive seller cooperation.
Example Language
Buyer shall have [30–45] days from the date of full execution of this LOI ('Due Diligence Period') to conduct a comprehensive review of the business. Seller agrees to provide, within five (5) business days of execution: (i) three years of tax returns and profit and loss statements; (ii) twelve months of POS transaction reports from [Square/Toast/Clover]; (iii) twelve months of business bank statements; (iv) copies of all current permits, health licenses, commissary agreements, and parking or vending contracts; (v) a complete mechanical service history and most recent inspection report for the truck; and (vi) copies of all catering contracts and event booking agreements.
💡 If the seller cannot produce POS data because operations are primarily cash-based, require bank deposit statements as a substitute and flag this as a material risk factor that may reduce your final offer. Build in a right to extend the due diligence period by 15 days if permit transfer status cannot be confirmed within the original window.
Permit and License Transfer Contingency
Food truck acquisitions are uniquely exposed to permit transfer risk. Health permits, commissary agreements, municipal vending licenses, and parking permits are often non-transferable or require lengthy reapplication processes. This section makes the deal contingent on resolution of these issues.
Example Language
Buyer's obligation to close is contingent upon: (i) confirmation that all material health permits and food handler certifications are transferable to Buyer or that new permits can be obtained by Buyer prior to or within 30 days of closing; (ii) execution of a new commissary kitchen agreement by Buyer on terms reasonably acceptable to Buyer; and (iii) confirmation that existing municipal vending and parking permits for primary operating locations can be transferred or reissued in Buyer's name without material delay. In the event any material permit is confirmed non-transferable, Buyer may terminate this LOI or renegotiate the Purchase Price to reflect the cost and delay of permit reacquisition.
💡 Research permit transferability in the target municipality before LOI execution — do not assume permits transfer automatically. Some cities require the original applicant to surrender the permit and Buyer to apply fresh, which can take 30–90 days and may require a commissary with specific certifications. Price this risk into your offer upfront.
Seller Transition and Non-Compete
Defines how long the seller will support the buyer post-closing, including training on recipes, supplier relationships, catering client introductions, and social media handover. Also establishes the geographic and time scope of the seller's non-compete obligation.
Example Language
Seller agrees to provide up to [60] days of transition assistance post-closing at no additional cost, including: (i) in-person training on all menu preparation, sourcing, and operational procedures; (ii) introduction of Buyer to all active catering clients and corporate accounts; (iii) transfer of all social media account credentials and cooperation with a mutually agreed public announcement of ownership change; and (iv) coordination with the commissary kitchen operator to facilitate Buyer's onboarding. Seller agrees not to own, operate, or consult for a competing food truck or mobile food service business within [25] miles of [Primary Operating City] for a period of [3] years following closing.
💡 If the seller's personal brand is a significant revenue driver, negotiate an extended social media transition period where the seller posts content introducing the new owner. A 60-day active social handover can meaningfully protect buyer revenue in the first months of operation. Non-competes in the food truck industry are difficult to enforce if they are too broad — keep the geographic radius tied to actual operating territory.
Earnout Provisions
When a food truck business has a strong personal brand or limited financial documentation, buyers may propose an earnout tied to first-year revenue performance. This section defines the earnout structure, measurement period, and payment terms.
Example Language
In addition to the base Purchase Price, Buyer agrees to pay Seller an earnout of up to $[Amount] based on the following performance milestones during the twelve (12) months following closing: (i) $[Amount] if gross revenue equals or exceeds $[Threshold 1]; (ii) an additional $[Amount] if gross revenue equals or exceeds $[Threshold 2]; and (iii) an additional $[Amount] if existing catering contracts identified on Exhibit A are renewed or extended under Buyer's ownership. Earnout payments, if any, shall be made within 45 days following the end of the measurement period. Buyer shall provide Seller with monthly POS and revenue reports during the earnout period.
💡 Sellers in food truck deals often resist earnouts because they feel uncertain about whether a new operator can maintain their revenue. Frame the earnout as upside for the seller, not a risk transfer. Set earnout thresholds at 80–90% of trailing twelve-month revenue to make them achievable under normal operating conditions while protecting Buyer from paying full price for performance that does not materialize.
Exclusivity and No-Shop
Grants the buyer an exclusive negotiating period during which the seller cannot solicit or entertain offers from other buyers. Critical in food truck deals where motivated sellers may be running informal parallel conversations with multiple parties.
Example Language
In consideration of Buyer's investment of time and resources in due diligence, Seller agrees that for a period of [45] days following execution of this LOI ('Exclusivity Period'), Seller will not, directly or indirectly, solicit, encourage, or accept offers for the purchase of the business or its material assets from any third party. Seller will promptly notify Buyer of any unsolicited acquisition inquiries received during the Exclusivity Period.
💡 45 days is standard for food truck deals. If due diligence is complicated by permit issues or equipment appraisal delays, negotiate an extension right of 15 additional days at Buyer's election. Sellers who resist exclusivity are often still shopping the deal — treat this as a red flag and address it directly before proceeding.
Deposit and Good Faith Escrow
Establishes a good faith deposit to demonstrate buyer seriousness while protecting seller's time and business confidentiality during the exclusivity period.
Example Language
Within five (5) business days of full execution of this LOI, Buyer shall deposit $[Amount] (the 'Good Faith Deposit') into escrow with [Escrow Agent / Closing Attorney]. The Good Faith Deposit shall be credited toward the Purchase Price at closing. If Buyer terminates this LOI following completion of due diligence due to a material adverse finding, the Good Faith Deposit shall be returned to Buyer in full. If Buyer terminates without a material basis following the due diligence period, the Good Faith Deposit shall be forfeited to Seller as liquidated damages.
💡 For food truck deals in the $300K–$1M range, a good faith deposit of $5,000–$15,000 is typical. Larger deals with SBA financing may require a higher deposit to satisfy lender requirements. Always define 'material adverse finding' to include permit non-transferability, truck mechanical failure, or revenue verification shortfalls exceeding 15% of represented amounts.
Binding and Non-Binding Provisions
Clarifies which sections of the LOI are legally binding (exclusivity, confidentiality, deposit terms, no-shop) and which are non-binding expressions of intent (purchase price, deal structure, asset list) pending execution of a definitive purchase agreement.
Example Language
This LOI represents a non-binding expression of intent regarding the proposed acquisition, with the exception of the following provisions which are expressly agreed to be legally binding upon execution: (i) Section [X] — Exclusivity and No-Shop; (ii) Section [X] — Good Faith Deposit; (iii) Section [X] — Confidentiality; and (iv) Section [X] — Governing Law. The parties acknowledge that neither party shall have any binding obligation to consummate the proposed transaction unless and until a definitive Asset Purchase Agreement has been fully executed by both parties.
💡 Make this section unambiguous. Sellers occasionally argue that a signed LOI obligates the buyer to close — it does not, except for the binding provisions. Have your attorney review this section before execution if there is any ambiguity about governing law or the consequences of deal termination.
Asset Allocation Between Hard Assets and Goodwill
The split between truck and equipment value versus goodwill and intangibles has major tax and financing implications. Buyers prefer higher allocation to depreciable hard assets; sellers prefer goodwill allocations taxed at capital gains rates. In food truck deals, negotiate this split based on an independent equipment appraisal and a realistic assessment of brand transferability — especially if the seller's personal identity is central to the brand's appeal.
Permit Transfer Contingency and Timeline
The most food-truck-specific negotiation point in any LOI. Define exactly which permits must transfer (or be reissued) before closing is required, and establish a clear timeline and cost allocation. If the buyer must reapply for a commissary agreement or health permit independently, negotiate a price reduction or seller credit to offset the cost and operational gap during reapplication.
Seller Financing Terms and Trigger Events
When seller financing is structured around permit transfer milestones, negotiate what happens if a permit is delayed beyond 60 days — does the note begin accruing interest, does the closing date extend, or does the buyer have a termination right? Seller notes in food truck deals are often small ($25K–$75K) but the trigger events matter significantly to deal certainty.
Earnout Thresholds and Measurement Methodology
If an earnout is included, negotiate whether revenue is measured by POS gross receipts, bank deposits, or net of refunds and voids. Also define whether catering contract renewals count toward revenue thresholds or are tracked as separate milestones. Sellers should push for gross revenue measurement; buyers should push for net revenue after refunds and event cancellations.
Transition Period Length and Social Media Handover
In personal-brand-driven food truck businesses, the seller's Instagram, TikTok, and Google presence may represent a significant portion of the business value. Negotiate a minimum 30–60 day social media transition period during which the seller actively posts about the ownership change and introduces the buyer to their audience. Define what happens if the seller refuses to cooperate post-closing — include this obligation in the definitive purchase agreement with a holdback tied to completion.
Non-Compete Geographic Scope and Duration
A 3-year non-compete within a 25-mile radius of the primary operating territory is a reasonable starting point for most food truck acquisitions. Sellers may push back on geography if they plan to relocate or open a brick-and-mortar concept. Buyers should ensure the non-compete covers mobile food service, catering, and any substantially similar cuisine concept — not just food trucks specifically.
Equipment Condition Representations and CapEx Credit
The truck, generator, and kitchen equipment represent the core hard assets of the business. If a pre-LOI inspection reveals deferred maintenance, high mileage, or aging refrigeration units, negotiate a price reduction or seller credit at closing rather than leaving it as a post-due-diligence issue. Define in the LOI that Seller represents all equipment is in good working order as of the effective date.
Find Food Truck Business Businesses to Acquire
Enough information to write a strong LOI on day one — free to join.
Most provisions of a food truck LOI are intentionally non-binding — including the purchase price, asset list, and deal structure — meaning either party can walk away without legal consequence if negotiations break down or due diligence reveals problems. However, specific provisions are typically made binding: the exclusivity period, good faith deposit terms, confidentiality obligations, and governing law. Make sure your LOI clearly distinguishes binding from non-binding sections, and have an attorney review it before you sign.
For most food truck acquisitions, a 30–45 day due diligence period is appropriate. However, food truck deals have unique complications — particularly around permit transfer status, equipment inspection scheduling, and commissary agreement negotiation — that can extend the process. Build in a 15-day extension right that the buyer can exercise unilaterally if permit verification is incomplete. If the seller cannot produce organized financial records promptly, factor that delay into your timeline.
Yes, an earnout is a smart tool when a food truck's revenue is closely tied to the founder's personal identity, social media presence, or community relationships. Structure the earnout around achievable revenue thresholds — typically 80–90% of trailing twelve-month gross revenue — measured over the first 12 months of Buyer's operation. This protects the buyer from overpaying for goodwill that may not transfer while giving the seller upside if the business performs. Always define the measurement methodology clearly and require the seller to cooperate with the social media and client transition as a condition of earnout eligibility.
A food truck LOI should specifically address transferability of the following: county or city health department food service permits, food handler certifications for any retained staff, the commissary kitchen agreement (often required by the health department as a condition of the food service permit), municipal vending or street vending permits for regular operating locations, and any parking or event agreements with private property owners. Research your specific jurisdiction before executing the LOI — some cities require a full new application regardless of ownership structure, while others allow permit transfers with a fee and inspection.
Most food truck deals in the $300K–$1M range are structured as asset purchases with a combination of buyer equity or SBA financing and a seller note covering 10–20% of the purchase price. The purchase price is typically allocated between hard assets (truck and equipment, often 40–60% of the total) and intangible assets plus goodwill (brand, catering contracts, social media, recipes). SBA 7(a) loans are available for food truck acquisitions when the business has documented EBITDA, a commissary agreement, and clean financials. Earnouts are used when financial documentation is thin or owner dependency is high.
Food truck businesses in the lower middle market generally trade between 1.5x and 3x EBITDA, depending on revenue consistency, documentation quality, asset condition, and the degree of owner dependency. A truck with documented catering contracts, a modern POS system, clean health inspection history, and a transferable brand may command the higher end of the range. A cash-heavy single-operator truck with aging equipment and no recurring contracts will typically trade at the lower end or below 2x EBITDA. Use the LOI to anchor your proposed multiple and back it up with comparable transaction data from your broker or advisor.
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