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Should You Join The Food Truck Revolution?

Meals on the move may be democratizing gourmet food from coast to coast, but before you get your own truck here are a few things to consider.

By Deborah Moss

Not so long ago, eating street food was an adventure for culinary risk takers. But in the past five years, gourmet food trucks have hit the streets in record numbers—in New York and Los Angeles as well as cities such as Austin, Denver, Miami, San Francisco, Seattle and Washington, D.C.—offering fine foods at reasonable prices. Requiring far less start-up capital than restaurants, trucks make it possible for culinary professionals to offer everything from schnitzels to snails. Initially, many food truck pioneers were young entrepreneurs who chose to hit the streets because they couldn’t afford to start a restaurant, but today, restaurants, bakeries and retailers are expanding their brick-and-mortar businesses by starting a truck.

Laurent Katgely, owner of Chez Spencer in San Francisco, started doing meals on wheels in 2009 on his truck, Spencer on the Go. “We do a three-course prix fixe for $15 from the truck, whereas the tasting menu at Chez Spencer is $80 to $100. People are more willing to try a new food if it’s more affordable,” he says. “And we have gotten customers who tried food on the truck, like snails, and then came to the restaurant. They didn’t want to spend $20 on a dish that they didn’t know but would pay a few dollars to try one from the truck.”

Sean Moore, who co-owns Denver’s Cake Crumbs Bakery and opened The Denver Cupcake Truck in 2010, says his truck expansion also brought more customers into the bakery, plus a new revenue stream from the exotic cupcakes sold on-the-go.

With so many success stories, a food truck may seem like a logical way to grow your business. Here are some of the things you’ll need to consider or tackle before taking your food on the road.

1. Do your due diligence about local regulations.

“The only absolute about the food truck business is that it’s absolutely unpredictable,” says Matt Geller, CEO of the Southern California Mobile Food Vendors Association. Rules and regulations for food trucks not only vary from state to state, but in California, they can change within a few blocks, Geller explains. That’s no small issue for a business that relies on being mobile. “I get a lot of calls from people who want to start a food truck. The first thing I tell them is ‘research, research, research,’” says Geller. “This business changes constantly and requires you to be an expert at things that are always changing (such as licensing and permit requirements). The more you know personally, the better you can navigate it.”

Before considering a food truck outpost, you need to find out if your city even allows food trucks; where they’re allowed to park; what they are permitted to serve (for instance, Chicago will not allow food to be prepared in the truck); and what licenses, insurance and permits are required. You also need to know if there are permits available: In New York City, for example, there’s a 10- to 15-year waiting list. Permits are available on the black market, but this approach is not recommended. “That can be a tense process filled with unknowable variables, and it’s illegal,” says Sean Basinski, director of the Street Vendor Project at the Urban Justice Center in Manhattan. “If you already own a business, you’re risking your business based on an illegality. That’s what keeps a lot of established places away from opening a truck.”

Allow plenty of time for every step of the process. “It took us about six months to find insurance,” says Scott Baitinger, co-owner of Streetza, a pizza truck in Milwaukee, Wisc., started in May 2009. “They had to write a new policy just for us—an umbrella policy that included vehicle and restaurant liability.” Because Baitinger’s Streetza was the first gourmet food truck in Milwaukee, he says agencies had to create rules and regulations in the process. “We worked with the health department to make sure we met their standards—which weren’t that well defined in this emerging market,” he explains. Streetza’s operators also learned that ice cream trucks require different licensing than pizza trucks and trucks preparing food require different licensing than those delivering food.

2. Create a detailed business and financial plan.

Although food trucks don’t demand the capital it takes to set up a store or restaurant, they do require a significant investment of finances, time and energy. “It’s always a good plan to flesh your ideas out and think things through,” says Basinski. Whether you’re estimating how much food you can serve or tallying operating costs, consider every expense line by line. Basinski—who teaches a class called Street Food Vending 101 at the Street Vendor Project headquarters in downtown Manhattan—says people need to be thorough when projecting operating costs. Factor in not only insurance, permits and licenses, but also commissary lot fees, truck and food costs.

And don’t forget about unexpected expenses like parking tickets, truck maintenance and health inspections. “Tickets are very high in New York and enforcement is quite strict,” explains Basinski. “Restaurants get inspected once a year on average, whereas food vendors get visited frequently—five to eight times a year.”

Ben Van Leeuwen, co-owner of Van Leeuwen Artisan Ice Cream trucks in New York City, has experienced unexpected expenses first hand: “There have been weeks where we got $3,000 worth of violations [for trivial things]. Our trucks are pristine, but you can be fined for using a tea towel the wrong way,” he says. Van Leeuwen, who started his business in 2008 with his wife and brother, also discovered that there are restrictions for hiring people. “It takes anywhere from two-and-a-half months to four months to be certified to work on a food truck in New York,” he explains. “If we want to hire for a busy time, we have to interview way ahead. Nobody knows why this process takes so long.”

But even with the headaches, many truck owners would still recommend starting a truck as long as you understand what you’re getting into. “It is a lot of work. You’re constantly being inspected by the health department, you’re always on show when out on the street and you have to wear many hats [driver, cook, accountant, mechanic and so on],” says Moore of The Denver Cupcake Truck. “I have 10 to 15 people a day who say they want my job. They may not know that I’m at the bakery every day at 4 a.m.”

But Moore, who started the truck as an off-shoot of the bakery he owns with his wife, has had an overall positive experience. “The truck has allowed us to pay down about 30 percent of our start-up debt with the bakery,” he says. “Some days the truck will make just as much as the bakery in sales. When considering overhead on the truck and the product cost, we are able to put about 70 percent of our sales back into profit. There is a high margin compared to the bakery.”

Spencer on the Go’s Katgely agrees. “If you do your homework, you won’t have too many surprises,” he says, adding that you can make more money more quickly with a truck. “Your margin of return on a restaurant is 10 percent if you’re lucky. With a truck it’s more like 40-50 percent. Our restaurant has been in business for eight years and we’re starting to see some profit, but the truck has already been paid off over and over in less than two years.”

3. Know your food and competition.

You are already in the food business, so you may believe that you know your product and competition. But when you take your food on the road, everything changes. Here are things to consider:

Can your food be eaten standing up? Street food is all about convenience, which is part of the reason why Baitinger of Streetza chose pizza for his truck. “Pizza is a core handheld food,” he explains. “We bake pizzas, slice and serve. No pizza sits around for longer than a few minutes and we can get food into a customer’s hands in about 25 seconds.”

Can your food be prepared and served quickly? Pilar Chapa, a restaurant chef who now cooks lamb brochettes and burgers in New York’s Bistro Truck, suggests creating your menu based on what can be made quickly in a truck without sacrificing taste—since speed is at a premium. “Cooking in a truck is a totally different experience,” Chapa says. “People don’t have time to wait. They want their food right away. They want it hot and delicious. That’s not so easy to accomplish in a small truck kitchen.”

Is your concept different from the competition? Husband and wife team Brook Howell and Erik Cho, who own Los Angeles’ Frysmith, a truck that serves french fries with various toppings (such as free-range chicken in tomatillo-tamarind sauce), assessed the market before opening their truck. “We had a unique idea for what we wanted to do,” Howell says. “For example, L.A. doesn’t need another cupcake truck. It’s the same thing as a restaurant: Don’t open an Italian place if there are already three on that block.”

Peter Korbel, co-owner of Fojol Bros. in Washington, D.C., says, “You’ve got to be strategic about the market you pick and the cuisine. We were the first food truck in D.C. serving a proper meal. We moved into an area where food was either not affordable or not good. There were a lot of chains there.”

According to Korbel, Fojol Bros. chose Indian cuisine, in part, because curries move fast. For their second truck (which hit the streets in fall of 2010) they chose Ethiopian cuisine. “There’s a huge Ethiopian population in D.C. but it’s hard to access some of the restaurants,” he says. “We wanted to make it more accessible and expose the city to that cuisine.”

4. Be prepared for issues with buying a truck.

Your vehicle must be a road-worthy combination of a chef’s kitchen and a storefront—so you can’t just pick one at your local car dealer. New trucks will need to be customized for your business and can actually cost more than $100,000, so purchasing can take a while.

Be prepared for delays. “The hard part for us was getting the truck. We were told it would take four to six weeks, but it took six months. The company building it oversold how long it would take. It took two months just to get the plans approved by the health department,” Frysmith’s Howell says. “When we started there were no real competitors for what we were going to do. We wanted to get on the road before the competition grew. That was frustrating.” To avoid extra delays, she advises having a truck outfitted by an experienced builder who’s familiar with the city in which you’re planning to operate. They’ll know what will or won’t work and they’ll know if things are against a code.

Be prepared for setbacks. Even with loads of research, Streetza ran into some unexpected snafus. “We outfitted our truck with an electric oven. It wasn’t until we went to the Department of Transportation for our inspection that we realized it wouldn’t work because our generator for it wouldn’t fit in the truck and couldn’t sit outside it,” Baitinger explains. “I still have that oven in my garage.”

Be prepared to spend money on maintenance. Because new food trucks can be so expensive, many people opt to buy a used one or rent a vehicle. And old trucks do require a lot of TLC. Katgely of Chez Spencer bought a used truck with 400,000 miles on it when he started Spencer on the Go in 2009. “It breaks down. We did a TV show recently [“The Great Food Truck Race” for the Food Network] where we were traveling across America. We broke down so they lent me another one to finish the show,” he says.

But Katgely and other truck owners have a fondness for their older vehicles. “We have an old truck,” says Moore of his 1969 Ford Vanette. “My target market is people in their 30s. This truck reminds them of childhood and it draws a lot of attention. People snap pictures of it all day long. It’s great for advertising.”

5. Plot out locations.

Once you have an idea of where you want to park, get friendly with the neighbors. Frysmith in L.A. sets up close to bars frequented by twentysomething men. “Our demographic is mainly young men,” says Howell. “I talk to bar managers to see if they’d like us to be outside. They usually do because it enhances their business. People drink in the bar, come out for food and then go drink some more.”

Streetza also parks in front of bars from time to time. “When we first rolled out, we were not necessarily welcome with open arms. That has changed 180 degrees. Now people are reserving spots for us because we bring business to their neighborhood,” Baitinger says. “Still, I don’t park in front of a restaurant. I won’t park within three or four blocks of an Italian or pizza restaurant.”

Spencer on the Go parks in only one location, next to a wine bar called Terroir. “They allow us to bring our truck to their lot and they pair the wine with it,” Katgely says.

Whereas Katgely stays in only one lot, Baitinger doesn’t stay in one place for too long. “We have an iPhone app—streetzatracker—with a GPS tied into our truck. People can find out where we are. If enough people tweet us, we’ll move to a new location,” he says. That’s clearly a luxury traditional restaurateurs do not have.

6. Court customers with social media.

Van Leeuwen Artisan Ice Cream It isn’t just location options that are different in running a food truck restaurant; the relationship with your customers is different as well. Geller of the Southern California Mobile Food Vendors Association says it succinctly: “Restaurants have customers. Food trucks have followers.”

Moore of The Denver Cupcake Truck jokes that, thanks to social media, people fight over him. “We have a dialogue with our customers. We have 6,700 Facebook fans and more than 1,000 Twitter followers. All of them are active. Today, for example, I had 120 comments on my postings,” he says.

Baitinger found using social media in advance of his launch to be helpful. “We had a presence on Facebook and Twitter before we went out on the road,” he says. “Our fans helped us choose the truck design and make the menu. They are the best brand evangelists we could ask for. It isn’t just our truck anymore. It’s theirs.”

So with all those things to consider, is having a food truck worth it for your business? “I’m the happiest I’ve been in my life,” says Korbel, age 29, of Fojol Bros. “We started the truck when I was 27. I needed to take a risk, to do something entrepreneurial. And it paid off.”

Ben Van Leeuwen, who used his ice cream truck as the launching point for selling packaged pints at Whole Foods Markets and opened a store in Brooklyn in 2010, says the work a food truck brings is worth it: “It can be super stressful but in a good way if you’re passionate about food. If you don’t have a ton of money but want to do amazing food for other people who love amazing food, the truck is great.”

For established businesses, having a food truck can be a powerful marketing tool. Trucks are a great way to sample or to scope out a possible new location, notes Baitinger. “It’s the best way to do quick, accurate market research. Worst case, if you park at the busiest corner, it’s a great marketing vehicle and probably less expensive than a billboard.” |SFM|

Deborah Moss is a freelance writer whose work has appeared
in Sports Illustrated and Shape.

THE TRUCKS

Here is some information on the food trucks mentioned in the story.

BISTRO TRUCK, NEW YORK CITY
bistrotruck.com
Moroccan/Mediterranean-influenced bistro food such as Dijon Chicken over rice or Salad Nicoise. They have one truck.

THE DENVER CUPCAKE TRUCK, DENVER
cake-crumbs.com
Exotic cupcakes such as Maple Bacon or Rocking Red Velvet. The truck was an expansion for Cake Crumbs Bakery.

FOJOL BROS., WASHINGTON, D.C.
fojol.com
Indian and Ethiopian foods. The business has two trucks.

FRYSMITH, LOS ANGELES
eatfrysmith.com
Fries with unusual toppings such as Rajas Fries (with fire roasted poblano chiles, caramelized onions, shawarma-marinated steak with Jack cheese). The business has one truck.

SPENCER ON THE GO, SAN FRANCISCO
spenceronthego.com
On-the-go French fare such as a Braised Lamb Cheek sandwich or an Escargot Puff lollipop. The truck was an expansion for French restaurant Chez Spencer.

STREETZA, MILWAUKEE, WISC.
streetza.com
Unusual pizza by the slice such as The Wisconsin State Fair Chili Slice or the Chicken Alfredo Slice. The business has one truck.

VAN LEEUWEN ARTISAN ICE CREAM, NEW YORK CITY
vanleeuwenicecream.com
Gourmet ice cream, (such as Red Currant or Espresso flavors), coffee and homemade pastries (such as Cheddar scones). The success of the trucks led Van Leeuwen to open a storefront in Brooklyn in 2010.

This article was featured in the January/February 2011 Issue of Specialty Food Magazine. See other articles in this issue at:
January/February 2011 Specialty Food Magazine.