# Food Truck #1 — Requirements & Planning

**Entity:** subsidiary of SnS Network Solutions Holdings LLC — **but unlike the other
subsidiaries, Holdings is NOT the sole member here.** Foodtruck1 LLC will have two
Members:
- **SnS Network Solutions Holdings LLC** — 85%, holding Sam's ownership stake (keeps
  Sam's interest inside the liability/succession structure described in
  [`../00-sns-holding/00-sns-holding.md`](../00-sns-holding/00-sns-holding.md))
- **Kiowa** — 15%, granted for $0 cash under
  [`../00-sns-holding/docs/kiowa-equity-framework.md`](../00-sns-holding/docs/kiowa-equity-framework.md),
  vesting quarterly over 12 months from Foodtruck1's Opening Date, contingent on
  cumulative net profit reaching 2x Sam's invested capital in Foodtruck1 by month 12

This does **not** change Holdings' own cap table — Sam remains the sole owner of
SnS Network Solutions Holdings LLC itself (see `../00-sns-holding/docs/operating-agreement.md`).
The two-member structure applies only at the Foodtruck1 subsidiary level.
Draft operating agreement: [`docs/operating-agreement.md`](./docs/operating-agreement.md).

`[TODO: fill in the remaining brackets in that agreement — entity legal name, EIN,
registered agent, day-to-day manager, staffing model — and record the actual Opening
Date and Sam's total invested capital here once known, since both drive the vesting
framework's math. Then route it through LegalShield for review before signing.]`

**Owner role:** Sam (via Holdings, 85%) and Kiowa (15%, vesting) co-own the truck;
day-to-day running (routes, customers) is not done by Sam.

## Staffing Model — decision pending
Two options discussed, not yet chosen:
- **Lease/License model** — truck leased to an independent operator (their own
  business entity) for flat rent or % of revenue. Operator hires/manages their own
  staff; no W-2/1099 question for the subsidiary at all. Cleanest for liability and
  avoids employer obligations entirely.
- **Direct W-2 hire model** — subsidiary hires ~3 employees directly (cooks/crew).
  Food-truck crew doing the core work almost certainly must be **W-2, not 1099**
  (behavioral + financial control tests both point to employee status).

Whichever model is chosen changes everything below — the cost estimates in this doc
assume the **direct W-2 hire model** (3 employees).

## Software / Ops Cost Estimates

| Item | Estimate | Notes |
|---|---:|---|
| **Gusto** (payroll) | **$80/mo** (high end) | Covers withholding calc, federal/state tax deposits & filings, new-hire reporting, year-end W-2s. Actual quote for 3 employees on the Plus tier runs ~$80–116/mo; using $80 as the planning number. |
| **ERPNext hosting** (Frappe Cloud) | **$20/mo** (confirmed) | Decision: **Frappe Cloud "Servers" plan** (shared VM, dedicated bench) instead of self-hosting on AWS. Cheaper than the $44/mo self-hosted AWS Lightsail 8GB option calculated earlier, and Frappe manages patching/backups/snapshots instead of us. Plenty for our light (1–3 user) usage. |
| **Total planning estimate** | **$100/mo** | Software/ops line only — excludes wages, employer payroll tax match, workers' comp premium, and any insurance/permits (see Outstanding Items below). |

## Mandatory Insurance (fact-checked)

| Coverage | Mandatory? | Est. Cost | Notes |
|---|---|---:|---|
| **Workers' Compensation** | **Yes — Indiana law, no employee-count exemption.** Required from employee #1. Penalties for skipping: up to $50/day fine, plus a misdemeanor (up to 1 yr jail / $5,000 fine). | **~$75–150/mo** | Food-service class code rate ~$1.00–4.50 per $100 payroll nationally; exact number depends on actual wages once set. |
| **General Liability** | **Functionally yes** — not a blanket state law, but every mobile food vendor permit requires proof of GL (typically $1M/occurrence, $2M aggregate, city/county named as additional insured) before the permit is issued. | **~$42/mo (~$500/yr)** | Confirm exact limit with South Bend / St. Joseph County health dept when applying for the permit. |
| **Commercial Auto** | **Yes** — Indiana requires liability coverage on any vehicle on public roads, and a personal auto policy typically **excludes commercial use**, so the truck needs its own commercial policy. | **~$170/mo (~$2,041/yr)** | Bundled GL + commercial auto + equipment/build-out coverage commonly runs **$300–700/mo** total industry-wide — treat the two lines above as a floor. |
| **Health insurance (ACA employer mandate)** | **No** — mandate only applies at 50+ full-time-equivalent employees. Not a factor at 3 employees. | $0 | Common misconception; explicitly not required at this size. |

**Revised planning total, insurance included:** ~$80 (Gusto) + $20 (Frappe Cloud) + ~$75–150 (workers' comp) + ~$42 (GL) + ~$170 (commercial auto) ≈ **$390–460/mo**, before wages, the employer FICA match, and SUTA.

## Outstanding Items (not yet priced/decided)
- [ ] Confirm staffing model (lease vs. W-2) before finalizing payroll requirements
- [x] Workers' compensation insurance — confirmed mandatory, ballpark cost above; get real quote once wages are set
- [ ] Mobile food vendor permit / health department licensing — confirm which entity holds it, and exact GL limit required by South Bend / St. Joseph County
- [x] Commercial auto insurance for the truck — confirmed mandatory, ballpark cost above
- [ ] Employer payroll tax match (~7.65% FICA) + Indiana SUTA — scales with actual wages, not a fixed cost
- [ ] Lease/License Agreement or W-2 onboarding paperwork (W-4, WH-4, I-9) — draft with LegalShield once model is chosen
