You may have been a customer or seen them around town. Maybe you caught an episode of “The Great Food Truck Race” on Food Network and thought “I could do that.” Perhaps you’ve always had an itch to get into the restaurant business and considered a food truck to be a way to dip your toe in the water. Or you may already own a restaurant and are looking for a new way to expand your brand.
Food trucks have become a $1 billion industry, with more than 4,000 trucks on the road. Here’s why you might want to get in on the trend.
1. It’s Less Expensive Than Opening a Restaurant
According to a survey of independent restaurants by the Center for Foodservice Education, the median startup cost to open a restaurant was $375,500. Startup costs for a food truck business or mobile vending cart range from about $50,000 to $250,000, depending on the vehicle and whether you purchase it new or used, making it a less expensive way to get into the foodservice business than opening a restaurant. And you usually can get into business faster, depending on where you are. Even getting a custom-built food truck along with the licenses and permits involved can be done in six months or less, whereas a restaurant build-out often takes longer.
2. Overhead is Lower
Food truck menus are typically more limited than those of traditional restaurants, and space is a lot more limited, so you save overhead on food, labor and, of course, the fixed costs of restaurant space.
3. Food Trucks Let You Take the Business to Your Customers
Instead of waiting for customers to come to you, you can take a food truck wherever there’s the likelihood of a good crowd. You’ll have to learn all about the parking regulations pertaining to food trucks in your market, but because your business is mobile, you can move it around and try different locations to see where you can best match your food to customers’ needs and wants.
4. You Can Set Your Own Schedule
Just want to serve lunch and cater special events on the side? Have a great dinner and late-night snack concept? While owning any business gives you the freedom to set your own schedule, customers expect brick-and-mortar restaurants to be open during normal business hours. With a food truck—and the aid of social media—you can let your customers know when you’ll be open and where.
5. You Own Your Business
Unlike most restaurants where you lease the space and buy the equipment and furnishings, you purchase a food truck (though leasing is an option). You have no rent payments, and you have flexibility in your business. Want to move to a different part of the country? You can take your business with you. Ready to retire? You can sell your truck or pass it on to your kids, which leads to the next reason…
6. A Food Truck is a Great Family Business
You can get the whole family involved in the business on a profit-sharing basis instead of hiring employees. If you have teenagers, a food truck can be a good way for them to make extra money or save for college. And you can pass the business on to them, easing out as you near retirement and taking only a portion of the profits.
7. Maybe Easier to Expand the Concept/Menu Quickly
If you find underserved demographics or want to switch out concepts, it’s relatively easy with a food truck compared to a restaurant. You might have to swap out one piece of equipment for another, and you may have to change the wrap on your truck to reflect the new concept and menu, but that’s less involved than converting a restaurant kitchen and decor. Think through your concept as you develop your business plan and give yourself space to experiment and find your niche. You might really have your heart set on selling gyros, for example, but instead of branding your food truck “We Need A Gyro,” think about branding it “In The Pocket” to give yourself the flexibility to try other foods or flavors beyond traditional gyros.
Owning a food truck also can be a smart business venture even if you already have a restaurant. Here are some additional reasons to get into the food truck business:
8. To Extend—and Reinforce—Your Brand
If you own a restaurant, a food truck with eye-catching graphics can provide “free” advertising while inviting new consumer trials beyond the neighborhood where you typically operate. Consumers are still really taken with the concept of food trucks, and they get a lot of attention wherever they go. A truck with your restaurant logo, phone number, social media handle, and the website address will go a long way toward gaining your new converts (and increasing incremental sales). Even if you don’t own a restaurant, a food truck’s mobility means that you extend your brand every time you’re on the road.
9. To Gain New Revenue Streams
For restaurant owners, a food truck is a catering kitchen on wheels that allows you to cater special events—like weddings, birthday or retirement parties, and grand openings—that you might not have the capacity for in your kitchen. It also lets your “restaurant” attend events such as farmers’ markets or community fairs that provide incremental sales without straining your kitchen capacity. Even for those who only want to open a food truck, these types of occasions can provide incremental sales to the normal schedule your business operates.
10. To Test Menu Items Easily
Again, for both restaurant owners and food truck-only operators, a food truck gives you a kind of laboratory on wheels where you can test a new or special dish among different groups of customers to see what has the potential of being a good seller.
1. Margins are thin
Food truck customers expect menu items to be reasonably priced. You can’t charge as much as a restaurant does, so profit margins are razor-thin.
2. Hours are long
No one goes into the restaurant business thinking they’ll work 40-hour weeks, but many people think the flexible schedule of the food truck business means the hours aren’t as long. But prepping food, cleaning the truck, buying supplies and all the other tasks that go into running a restaurant apply to food trucks, as well.
3. You’ll do everything
Maybe your initial thought is that you’ll cook great food and serve customers. The fact is, you’ll also wash dishes, clean and sanitize the “kitchen,” handle the books, buy the product and fix the truck when it breaks down.
4. Competition is fierce
Food trucks are everywhere and they’re all competing for the best location.
5. The red tape is endless
There are more regulations governing food trucks, with more restrictions, than there are for restaurants.
6. Mother nature is fickle
You’re at the mercy of external forces. With no indoor seating, rain, snow, heat and cold may keep customers away, not to mention flat tires, blown transmissions, leaky radiators and running out of gas—be it gasoline or propane.
7. It’s not the same as opening a restaurant
Even if you’re familiar with running restaurants, food trucks are different. Due to the size constraints of a food truck, special equipment is required, and there are special regulations specific to this type of foodservice operation. All of this means that it’s critical that potential food truck operators do specific and thorough research, not only about what you’ll need to go into the business but also what unique rules and regulations your local area might require.
Kelsey Moriarty is a Content Specialist at Central Restaurant Products. Her focus at Central is in the Food Prep and Furniture areas. Kelsey’s background is in technology and marketing with particular experience in SEO and E-Commerce. She enjoys helping customers make better decisions as well as working on her copywriting skills!