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Food Trucks - A Fad? Or a good business model?

post #1 of 17
Thread Starter 

So food trucks are the new thing, but I wonder if they are just a fad that will pass.  They're all the rage right now and even have TV shows about Food Truck races (which I do find entertaining and do watch).  In certain situations, I can see food trucks being a "cool thing," but seriously, is this a good way to make money in the food business or will this soon die off?

 

Don't get me wrong, I think food carts are pretty cool.  In fact, I absolutely loved the fact that downtown Portland (Oregon) was full of them.  But other than Portland, I fail to see the allure of checking Facebook just so I can drive around town following a food truck.  Maybe it is just me.  Also, as an entrepreneur, I just can't figure out how many of these food trucks make good money.  Between overhead, uncertainty (weather, traffic, laws, etc.), labor and food costs, how can a 3 person crew make a good living on a food truck.

 

My opinion is that it is a fad that is growing rapidly and I am starting to get sick of the whole thing.  But maybe I am wrong.  Any opinions on the latest and greatest food trend? 

post #2 of 17

I have heard that one of the big benefits is the overhead. I don't own a food truck myself, so I can't speak to how much it costs them, but I have heard of some restaurants complaining that it is difficult to compete directly with food trucks when the trucks don't have to pay for a building. I may be wrong. It does seem advantageous, however, that a truck would allow you to have better liquidity. It's easier to sell off a truck than to break a lease.

post #3 of 17

For 3 guys to make a decent living, the truck would need to knock it out of the park every day, lunch and dinner/late night. That's my take on it.

I have one, we worked a show on Saturday, just me and a cashier.

8am rts for all vendors, no one shows until around 10:30...starts getting busy around 11.

Steady line until 3:30....trickle until 4:15....time to pack up and leave.

So, I had someone on the clock from 6:30am to 6pm.

Now if I had two people I would not have made any $$

I did all the prep the two days before hand, no extra labor for that, and picked up the slack on Monday trying to reorganize and reset for lunch, which I work solo during the week.

 

I know what I did $$ wise, and would need to do that five days or more a week, two shifts each day to earn a GOOD living for myself and a decent living for two others.  18-20 hrs a day. 

Problem is, there is only so much you can put out in a day, your limited on what you have on board, if you sell out in two hrs, great, but now you go home. If you had the capacity to carry more stock, then you could continue selling if there were people to sell to.

 

The food truck race only shows the glamorous part of a food truck, selling and making $$,,,,not all the back breaking hrs needed before and after.

I want to see them getting up from 4 hrs sleep, after working for 18 hrs the day before, prep, drive, set up, work, clean, wash dishes, dump the tanks, get propane, shop, reload, deal with the health inspector, get a tire changed, fix the broken fryer.... you get the picture.

post #4 of 17
Thread Starter 

Thank you for the detailed info and explanation.  I have done the math many times and just cannot make it work to my favor.  I already have a commercial kitchen and parking lot space to put a truck, but after calculating the sales I would have to do just to make a reasonable profit, the venture just didn't make sense.  At least I am not the only one.

 

Btw, I came across a couple of interesting reads -

 

Are Food Trucks Missing The Point

http://joonbug.com/miami/firstcourse/Are-Food-Trucks-Missing-The-Point/vd6lRRSy05T

 

8 Food and Drink Trends That Are Totally Played Out

http://www.zagat.com/buzz/8-food-and-drink-trends-that-are-totally-played-out

post #5 of 17

I do think that food trucks are a fad, but I also think that they will be around awhile.  Sure, I expect that within a couple of years you will see the field thin out considerably.  The newness will die off and many wont make it, but I think there is a place for these things and I think that the smartest (not necessarily the best) will continue on.

 

Unless you have a whole fleet of food trucks I don't see how they can be that profitable, in the long run.  Sure, if you are lucky, you might be able to support a family, with your spouse also working, but I see limited potential for long term prosperity from a food truck.  I see it more as an off-shoot of a brick and mortar place.  It is a great way to reach new people-those that can't, or won't make to your restaurant, but looking at it as a stand alone venture I just can't see it making it long term.  Of course there will always be those that make a killing at it, but that takes a lot of hard work...and a lot of luck.  Those are few and far between though.

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http://www.onceachef.com/ is my personal blog where I share many recipes, my passion for cooking, and all things food.
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post #6 of 17

Isn't the overhead higher? You need a kitchen to do the prep, right? It reminds me alot of the

little tiny franchises/kiosk's that popped up in the 90's. You buy one of these and work it. Paying for the franchise or truck seems like

buying a job. Probably decent weekly pay.  but you're capped. Don't know if it's prudent to buy a job in this economy. I'd find a free one.

I don't know, my uncle quit being an engineer in the 60s and had a hotdog truck on route 9 NY for ever.  He was  wealthy.

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post #7 of 17

All depends.... some counties/states require everything prepared at a commissary, others don't. I have a full commercial kitchen in the 8.5'x20' trailer, full size 3 comp sink, produce sink, hand sink, 9' hood, broiler, stove, oven, flat top, 2 bay steam table, fryer, slicer, 2 door r/i, 4' sand table. 

 

Anything goes for me in my county, Every thing is done in the trailer. I have done festivals in other counties that won't allow anything premade, ie:pulled pork, chili, soups.....long cook items. Everything has to be cooked on site, day of, no re heating, any leftovers must be tossed, no cooling.

 

I also have a permanent spot. I don't move around, except to do events. I'm in a small town, everyone knows where to find me. Some people are "scared" of a mobile unit, most like it. I just do some simple stuff well.

 

Some people pay big bucks for the use of a commissary, I got lucky, $165 month. Catering kitchen, I get half of the walk in, use of the dish machine, ice, dry storage, etc.

$75mo for power, $3-400 mo propane., $1200 yr insurance, truck, trailer, business.

 

I look at it this way, I wanted a b&m place, could not negotiate a decent lease on anything, was going to need 50-60k put into someone elses building, just for hood, plumbing, electrical, grease trap, etc.

Plus whatever else I spent on the front end. If I had to walk away I loose all that. With this, I can sell it tomorrow.

 

I also have the benefit of being able to do weekend gigs, Have done 2 car shows, a 3 day jazz fest and a biker rally in the last month.

Was asked last week if I wanted to do our county fair for 5 days, no way... they take too much of your $$.

 

And yes. I bought myself a job.... a part time job, lunch only... in at 10, out at 2, M-F.... it keeps a roof over my head, and that was all that I was looking for at this point in time.

 

post #8 of 17

No, I don't consider that buying a job. You still have some controll of you're destiny.

You bring up many good points. biggest thing seems to be your mobile

Never! Live To Work!:::::::Work To Live!::Life Is Too Short!!
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post #9 of 17

I actually find thinking of food trucks as a "fad" a bit odd. Perhaps it has something to do with the fact that there are 7 food trucks on my area (out of about 2 dozen total) that have been here since the 1970s, one of them being here since the 1950s. Granted more than a dozen did start up in the past 2 years, but, the fact remains food trucks have been a staple here in Southern Maine (Greater Portland Area) for more than 40 years, which to mean seems to defeat the meaning of a fad (something that is all the rage for a season and gone the next season).

 

Perhaps, food trucks are fads in other areas of the country. I can certainly understand how if you live in a region the doesn't have a long history with food trucks, and suddenly they start popping up, sure, that does seem like a fad. I think that maybe in some regions they are fads and in other regions they are just a part of life. I think too that maybe some types of food trucks are fads, say cupcake trucks for example. Right now cupcakes are "hip" and "cool" and they are 3 cupcake trucks in my local area, all of which showed up in the past year. One of them is selling cupcakes for $3 a piece! OMG! The bakery (which has been there since the 1940s) down the street from the food truck, sells cupcakes for $5 a dozen, and they taste and look better than the $3/per ones from the food truck. I really don't expect the cupcake truck to still be in business next year, at least not unless they travel to another location with less competition, and not unless they start offering something on the menu besides outragously expensive cupcakes. Maybe you can charge $3 for a cupcake in New York, but not here in Maine. It shows poor market research on the part of this truck's owner - they have a good idea, but they put it in th wrong location, they compared the market/menu/prices of other cupcake trucks in America, but they did not compare the market/menu/prices of bakeries in the local area they planned to park at!

 

So, my thoughts on this is, yes they are fads for some, but no they are not fads for others. I think people who are really serious about the food truck business are going to be around for 20, 30, 40 years same as the food trucks that have already been doing just that. I also feel that folks who are jumping in on the fad and thinking they can "get rich quick" or are looking at it as "a cool thing to do" are going to fail and be gone. Food trucks are just like any other resturant - the ones that put in the long hours and hard work and are truly passionate about what they are doing are going to be around for a long time, but most are going to fail before their 3rd year.
 

post #10 of 17

edited below*

post #11 of 17

Great thread! Some very interesting points are made here and a very valid. Here's my take on this as a former food truck owner...

Yes, it is a fad! But if you know what you're doing, there is longevity in this business. Very few people do know what they're doing in this business and will not find longevity.

In my area, sushi and pho restaurants are a pretty big fad. Sure, sushi and pho will always have a demand but I highly doubt 70% of these new sushi or pho places are going to be open 5 years from now.   

 

Quote:
Originally Posted by chefbuba View Post

For 3 guys to make a decent living, the truck would need to knock it out of the park every day, lunch and dinner/late night. That's my take on it.

I have one, we worked a show on Saturday, just me and a cashier.

8am rts for all vendors, no one shows until around 10:30...starts getting busy around 11.

Steady line until 3:30....trickle until 4:15....time to pack up and leave.

So, I had someone on the clock from 6:30am to 6pm.

Now if I had two people I would not have made any $$

I did all the prep the two days before hand, no extra labor for that, and picked up the slack on Monday trying to reorganize and reset for lunch, which I work solo during the week.

 

I know what I did $$ wise, and would need to do that five days or more a week, two shifts each day to earn a GOOD living for myself and a decent living for two others.  18-20 hrs a day. 

Problem is, there is only so much you can put out in a day, your limited on what you have on board, if you sell out in two hrs, great, but now you go home. If you had the capacity to carry more stock, then you could continue selling if there were people to sell to.

 

The food truck race only shows the glamorous part of a food truck, selling and making $$,,,,not all the back breaking hrs needed before and after.

I want to see them getting up from 4 hrs sleep, after working for 18 hrs the day before, prep, drive, set up, work, clean, wash dishes, dump the tanks, get propane, shop, reload, deal with the health inspector, get a tire changed, fix the broken fryer.... you get the picture.

 

This is spot on, 3 guys can't make a living in this business. 2 however, is a more realistic option. I don't know how many 3 man crews came out to see my food truck for sale that had no idea anything about the business. 

 

Quote:
Originally Posted by UptownKevin View Post

 

Are Food Trucks Missing The Point

http://joonbug.com/miami/firstcourse/Are-Food-Trucks-Missing-The-Point/vd6lRRSy05T

 

 

 

This article is great!!!!! I love it! Most food trucks are missing the point. Street food should be cheap and awesome. Most of the food trucks in my area are in the same category... in that they miss the point. When I was doing my food truck, I was making food that was extremely flavorful, looked great and was a lower price point than my rivals. The reception I had for my truck was extraordinary. I was busier than the most popular and well known food truck here most of the time (when I was right next to them) and people were giving me great feedback. I was blowing their minds! It was like SLC finally had a great food truck and everybody was "getting it". I'm sad that I have had to leave my customers. I really don't think there is another food truck here that could fill my shoes.

 

Quote:
Originally Posted by chefbuba View Post

All depends.... some counties/states require everything prepared at a commissary, others don't. I have a full commercial kitchen in the 8.5'x20' trailer, full size 3 comp sink, produce sink, hand sink, 9' hood, broiler, stove, oven, flat top, 2 bay steam table, fryer, slicer, 2 door r/i, 4' sand table. 

 

Anything goes for me in my county, Every thing is done in the trailer. I have done festivals in other counties that won't allow anything premade, ie:pulled pork, chili, soups.....long cook items. Everything has to be cooked on site, day of, no re heating, any leftovers must be tossed, no cooling.

 

I also have a permanent spot. I don't move around, except to do events. I'm in a small town, everyone knows where to find me. Some people are "scared" of a mobile unit, most like it. I just do some simple stuff well.

 

Some people pay big bucks for the use of a commissary, I got lucky, $165 month. Catering kitchen, I get half of the walk in, use of the dish machine, ice, dry storage, etc.

$75mo for power, $3-400 mo propane., $1200 yr insurance, truck, trailer, business.

 

I look at it this way, I wanted a b&m place, could not negotiate a decent lease on anything, was going to need 50-60k put into someone elses building, just for hood, plumbing, electrical, grease trap, etc.

Plus whatever else I spent on the front end. If I had to walk away I loose all that. With this, I can sell it tomorrow.

 

I also have the benefit of being able to do weekend gigs, Have done 2 car shows, a 3 day jazz fest and a biker rally in the last month.

Was asked last week if I wanted to do our county fair for 5 days, no way... they take too much of your $$.

 

And yes. I bought myself a job.... a part time job, lunch only... in at 10, out at 2, M-F.... it keeps a roof over my head, and that was all that I was looking for at this point in time.

 

 

See, this is a great, viable long term business model above... I was a bit similar in some ways. I had considered finding a permanent location like you. I think it would have worked better for me... I was moving around to all the "popular spots". I was following your typical "gourmet" food truck business model that we have here in SLC. Office buildings, mobile food courts, and a few popular venues and private parties. The money was working for me. I was just doing lunches for the most part. I started to do a few dinner hours and "after" hours but it was never solid for me. A typical lunch for me was doing between $500-$700 gross. I was working with my wife so effectively (in a way) we had no labor. My food costs ran usually only around 20-25%. I was only spending about $70 a month on propane! That stuff is cheap! My first commissary was only $170 a month. No utilities. Although I had a few problems with my first commissary and moved to one that charged $400 a month after that. The $400/month place had a closed garage bay and a security gate and a great kitchen so it was well worth the move. The cheaper place I was parking outside and I had constant problems with electricity and refrigeration needs and no kitchen to use.  

 

A few hours of prep in the morning and a 2 hour lunch (always busy) was all the hours I was putting in. I was working 4 days a week and working on filling in 1 or 2 other days with solid spots and looking into getting solid spots for dinner. The money worked for me and I am confident that if other things didn't get in the way, I'd still be doing it and making good money and I'm sure I'd be the most popular food truck in SLC at this point... Leagues above the rest. 

 

Quote:
Originally Posted by EelKat View Post

I actually find thinking of food trucks as a "fad" a bit odd. Perhaps it has something to do with the fact that there are 7 food trucks on my area (out of about 2 dozen total) that have been here since the 1970s, one of them being here since the 1950s. Granted more than a dozen did start up in the past 2 years, but, the fact remains food trucks have been a staple here in Southern Maine (Greater Portland Area) for more than 40 years, which to mean seems to defeat the meaning of a fad (something that is all the rage for a season and gone the next season).

 

Perhaps, food trucks are fads in other areas of the country. I can certainly understand how if you live in a region the doesn't have a long history with food trucks, and suddenly they start popping up, sure, that does seem like a fad. I think that maybe in some regions they are fads and in other regions they are just a part of life. I think too that maybe some types of food trucks are fads, say cupcake trucks for example. Right now cupcakes are "hip" and "cool" and they are 3 cupcake trucks in my local area, all of which showed up in the past year. One of them is selling cupcakes for $3 a piece! OMG! The bakery (which has been there since the 1940s) down the street from the food truck, sells cupcakes for $5 a dozen, and they taste and look better than the $3/per ones from the food truck. I really don't expect the cupcake truck to still be in business next year, at least not unless they travel to another location with less competition, and not unless they start offering something on the menu besides outragously expensive cupcakes. Maybe you can charge $3 for a cupcake in New York, but not here in Maine. It shows poor market research on the part of this truck's owner - they have a good idea, but they put it in th wrong location, they compared the market/menu/prices of other cupcake trucks in America, but they did not compare the market/menu/prices of bakeries in the local area they planned to park at!

 

So, my thoughts on this is, yes they are fads for some, but no they are not fads for others. I think people who are really serious about the food truck business are going to be around for 20, 30, 40 years same as the food trucks that have already been doing just that. I also feel that folks who are jumping in on the fad and thinking they can "get rich quick" or are looking at it as "a cool thing to do" are going to fail and be gone. Food trucks are just like any other resturant - the ones that put in the long hours and hard work and are truly passionate about what they are doing are going to be around for a long time, but most are going to fail before their 3rd year.
 

 

Agree 100%... most food trucks here are just hoping on the fad and won't be around in 5 years. I myself, never planned on doing it for more than 5 years. I always planned that when business slowed down, I'd sell the truck and do something else. There are several food trucks operating around SLC that nobody seems to know of that have been around for years and years before all this took off. There is one guy here that owns 3 trucks and a restaurant and he's been doing it for 15 years. Few people have heard of him. There are also a few taco trucks that nobody here knows of that have been around 10+ years. 

post #12 of 17
Food trucks have been the new "catering" for the last decade. C'mon, guys, we know this already. Everyone and their mom has a food truck. But here's the thing- food trucks work best in a community. I have had ribs that would make a grown chef weep with the glory of it, from a food truck. Granted, that family has been doing it for the last 30 years, and has little to no overhead.
Here's the point: not all things are meant to be commercialized, or franchised, or even shared outside of county lines. Just because an idea has succeeded elsewhere doesn't mean everyone should try it. Here, in the little college town I live in, ten different truck businesses got together and started a food truck rally, with venues. That was two years ago, and their cross-promoting plus cashing in on the fad of a certain tv show has kept them, all of them, in business.
However, I live in a slightly magical place where we support our small businesses, and fight tooth and nail for it.
post #13 of 17
egads, i hope it's not a fad as i just opened a food truck last month!!....independent of our lake restaurant with a totally different concept, menu,direction and motivation......we are still in the growing pains stage but it is fun to be a part of something new and exciting and to bring something positive to our wonderful community. I don't know if it's viable yet...time will certainly tell, but i am committed to making it work. This is a first for our small town with more restaurants per capita in the state, and at times it's been slow going and hit or miss, but it is getting better and that's a good thing....repeat customers are a good wind vane. We are a self contained commercial kitchen that needs no commissary. We are in a fixed spot with a few other trucks. We have beautiful courtyard seating with easy access,no parking hassles or meters. Funny thing though, we are on north main but 'uptown'. Seems to be a stigma about 'uptown' eateries.....we're not cool enough or something. I say a year from now they won't be thinking that! Down/up side is that here in the colorado rockies you can only operate a truck 7 or 8 months of the year depending on the winter....that's okay with me though...we leave for the winter anyway! wink.gif
joey
Edited by durangojo - 8/13/13 at 12:58pm

food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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food is like love...it should be entered into with abandon or not at all        Harriet Van Horne

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post #14 of 17

i needed some insight on the business i currently own a food truck but i havent really done anything with it. i own a small bar with the capacity being around 83 im currently trying to build a patio in the back of the bar no extra rent (thank God) the landlord said it was completely fine, so if and when the patio gets built i would like to put the food truck along side the patio my question is how much can a food truck actually make, you know best or worse case scenario, thanks

post #15 of 17
Quote:
Originally Posted by pocketpairben View Post
 

 my question is how much can a food truck actually make, you know best or worse case scenario, thanks

 

 

That depends on a lot of factors. Like... How much storage is on the truck? Refrigeration space? What type of equipment is on the truck? What is your menu like? Are your cooks slow? Is there a kitchen in the bar and a staff to help replenish the truck? 

 

What type of food you serve and how fast it can come out is big on a food truck. Every food truck is limited on space. Only so much food fits in one. 

 

When I had my truck, I was doing 2 hour lunches. I would cook all morning, set up at my spot, serve, tear down, then prep the rest of the day for next days service. Those 2 hour lunches, I'd usually be slammed most of the time. Just me and my wife on the truck. We would do about 70-80 covers. Just under $10 for an average check. 20-25% food cost. On a bad day, we'd do about 30-40 covers. All that prep would only cover the best case scenario of the 70-80 covers. After that, we ran out of food. I was trying to fill my schedule with dinners too but could not figure out how I could get all that prep done in time for a dinner after a busy lunch service. I would have had to hire a prep cook to work at my commissary to accomplish that.  

 

That's how food trucks can be tricky. They aren't really designed to be high volume business's. You have to really plan well to get these things to make money.   

 

Now with you, you're going to have longer hours and less of a mad rush and probably higher food costs. You'll have to figure how to replenish the truck on long, busy days when the staff has their hands full just operating the truck. And you'll probably lose money on the slow days.  

post #16 of 17

Thinking of doing a food trailer in a permanent spot.  Have no knowledge in cooking or restaurant.  Business degree and husband few sons 16 to help. Owner of bar on a lake said he wants food. Only place on lake. Fish Fry for sure on Friday then idk what other food to do burgers, sandwich or like a bbq pork on a stick.  Any suggestions?  Would it be worth it to hire a chef for a bit and to get some great food ideas.  Open prob Fri, Sat, Sun. Lunch to maybe 9pm?

Thanks.

post #17 of 17
Quote:
Originally Posted by girlonlake View Post
 

Thinking of doing a food trailer in a permanent spot.  Have no knowledge in cooking or restaurant.  Business degree and husband few sons 16 to help. Owner of bar on a lake said he wants food. Only place on lake. Fish Fry for sure on Friday then idk what other food to do burgers, sandwich or like a bbq pork on a stick.  Any suggestions?  Would it be worth it to hire a chef for a bit and to get some great food ideas.  Open prob Fri, Sat, Sun. Lunch to maybe 9pm?

Thanks.

 

Remote or limited access area, limited operating hours and no professional cooking or restaurant knowledge. I would stop right there.

Is the guy that owns the bar going to bear some of the cost for you to bring food to his customers? He has nothing to loose if you fail.

I would not touch it with a 10ft pole.

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