Changing the Face of Downtowns

Food Trucks Drive Local Dining

Food Trucks Drive Local Dining

Sep 24, 2012

We all know that restaurants drive downtown revitalization. But with a median startup cost of $225,000 and average startup cost of over $470,000, getting a new restaurant downtown takes some serious effort mixed with a good dose of crazy. But what about this new food truck trend? Food trucks are not just for big cities anymore. From New York to Portland, these mobile gourmets are serving food on streets and in parks all over America.

A Food Truck serves up funnel cakes in Gypsey Hill Park in Staunton, Virginia.

Columbus, Riverside, and Framingham are joining the Los Angeles’ and Boston’s of the world by having Food Truck Festivals. But the question we should ask is, “How can food trucks drive our downtown economy?”  That sounds really smart, doesn’t it?

Here are some numbers:

Food Trucks cost between $15,000 and $80,000 to start. That means that you can have three food trucks for every one local owned business.

Food Trucks are mobile. Hence the 4 wheels. What does that mean for us? It means that a community that might not be able to support a Thai Restaurant might be able to support a Thai Food Truck that visits several close communities during the week.

Food Trucks offer chefs an opportunity to focus on great food. There are over 3 million food trucks and 5 million food carts in the US. With this many options, it is allowing American consumers the opportunity to sample foods that they never would have if they had to walk into a themed restaurant, but might try it in a mobile food experience.

Entreprenuer.com defines six categories of mobile food sales:

1. Food kiosks 
Food kiosks are temporary booths or stands used to prepare and sell foods like pretzels, ice cream, and hot dogs. The low overhead, flexibility and ease by which a kiosk can be opened and closed are among the reasons why they’re so popular. Because they are usually operating indoors, kiosk owners typically sign licensing agreements at malls, stadiums, movie theaters or other locations. Many major food businesses such as Ben & Jerry’s franchise express kiosks.

2. Food carts and concession trailers

This style of mobile food business has been around for decades and is a multibillion-dollar industry. Cart owners prepare food in advance or purchase ready-made food like ice cream bars. Then, the food is heated up or pulled from the freezer. Food carts used to focus on simple fare like ice cream and hot dogs, but have expanded their menus in recent years to include dishes like kebobs, gyros, salads, and fish and chips.

Mobile snow cone cart, Manhattan

Food carts usually either have room for the vendor to be inside and serve food through a window, or they utilize all the cart space for food storage and cooking equipment. Concession trailers, on the other hand, are often found at fairs, sporting events, or other places where they can be unhitched and sit for awhile. Unlike most carts, trailers allow for cooking and have room for two or three people inside.

Carts are less expensive than food trucks, and are usually pulled by a vehicle or pushed by hand. They’re fairly easy to maintain and, in many areas, require less licensing than the full-sized food trucks.

 

3. Food trucks
Larger than carts, trucks can carry more food and handle more business. However, food trucks need more space to park both when doing business and when off-duty.

A food truck can carry more sophisticated equipment for storing, serving, cooking and preparing foods. Food trucks can serve traditional quick lunch fare, be stocked with food from concessionaires, be run by a chain restaurant like In-n-Out or California Pizza Kitchen, or serve gourmet fare by an up-and-coming chef. They can do big business in corporate parks and places that have limited access to restaurants.

There are two types of food trucks: the mobile food preparation vehicle (MFPV), where food is prepared as customers wait, and the industrial catering vehicle (ICV), which sells only prepackaged foods. An MFPV costs more than an ICV, and both cost more than a food cart. A used hotdog cart may cost under $2,500, while a retro-fitted used food truck typically costs $30,000 or more. A new MFPV could cost upwards of $100,000. Complying with additional health department rules and regulations can also drive up food truck costs.

4. Gourmet food trucks
Basically the same as a food truck, the gourmet food truck takes food quality to a higher level. Of the 4,000 food trucks licensed to do business in the Los Angeles area, only about 115 are considered gourmet. They are run by ambitious young chefs who offer cuisine not typically found in food trucks, such as specialty crepes, Korean-Mexican fusion, osso buco or velvet cupcakes. Many gourmet trucks have specialties and themes. In addition, they let their clientele know where they’ll be parked through their websites and social media sites like Twitter. While food trucks need not have kitchens, gourmet trucks are more likely to have food prepared on the spot — and high-end food at that.

5. Mobile catering businesses
Mobile catering trucks are similar to mobile food trucks, but are hired for specific events. The client chooses food from a catering menu, and the truck then serves the food at the event.

The differences between catering trucks and food trucks are primarily in the manner of doing business. One particular advantage of a mobile catering business is you’re not risking as much in inventory because you are cooking and bringing food as ordered for the party. You also have a specific destination, so you need not worry whether your favorite destinations will be busy or not.

6. Bustaurants
As the name implies, a bustaurant is not a truck but a bus, often a double-decker with the lower level for the kitchen and the upper level for customers to sit and eat. This is a new concept and hasn’t really been proven yet, especially since the idea tests a rash of licensing issues. They also require more room to park, and are more costly to start because the buses need to be fully refurbished.

So what do these options mean for downtown business? We have seen food trucks work, almost stereotypically, for years in large urban markets. But, we need to take a tip from our big city neighbors. Food trucks work in small and medium markets.  They offer a wide alternative to the local fast food, can quickly change the menu based on local demand, and will even make custom requests.  There is a renaissance in dining and local food carts can lead the charge.  Customer demand has driven this sector to need credit card acceptance about 5 years ago and with very low average tickets, the owners are usually very, very savvy and look to any way to limit expenses given up on each transaction. The typical business in this category is pulling in about $9,000 per month on credit cards.  In cash they see perhaps 60% more.  Let’s call this at $14,000 in sales every month. Pair that with low start up cost, moderate maintenance, and the ability to move to where the customers are – you have a dynamic and dynamite approach to kick starting your downtown dining experience.
time to OWN it

Step 1- Food Truck Business Plan

Step 2- Design Your Food Truck

Step 3- Creatively Market Your Truck

Step- Food Trucks Get Social

 

 

2 comments

  1. This is a great site for research!!
    http://mobile-cuisine.com

  2. Excellent post, Ben. I have a new-found appreciation for food trucks after spending 3 weeks in Boston this past summer. Food trucks not only provide great variety but they can cater to areas that are not accessible to full scale restaurants (riverwalks, parks, playgrounds, etc)

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