ENTERING THE FOOD TRUCK BUSINESS

Mike N Willies

[spencerdog]

In an article in the Wall Street Journal, it was reported that restaurateurs seeking an extra boost in sales or entrepreneurs looking to sell food without paying rent are hitting the streets in record numbers.  From their kitchens-on-wheels, they’re serving everything from crème brulee to rotisserie chicken – and customers are gobbling it up.

When it comes to the street food scene, “in the last couple of years, there’s been a groundswell of innovation,” says Sean Basinski, director of the Street Vendor Project at the nonprofit Urban Justice Center in New York, who regularly teaches a “Street Food Vending 101” class. “It’s great to have a variety of food,” he says. “Why not have every culture represented in the streets, from hot dogs to caviar?”

The WSJ recommends the three best ways to start a food-truck business:

1. Buy a used truck for cheap. While a hot-dog cart costs about $2,000 to buy, refurbished trucks can run $40,000 and upwards, since they have to be built according to health-department regulations. Kim Ima, owner of the Treatsr Truck of New York, which sells cookies, brownies and other baked goods, found a used vehicle for sale on eBay in fall 2006 and bought it for less than $20,000. Laurent Katgely, proprietor of French restaurant Chez Spencer in San Francisco, started a food-truck business called “Spencer on the Go” after picking up a $15,000 vehicle from a former burrito seller. Mr. Katgely sells take-away frog legs, sweetbreads, ratatouille and escargot.

2. Find a good location to sell your food. Getting a permit for your truck can be tough since certain cities have a cap. For example, New York limits permits to about 3,000 and the waiting list for them can run as long as 10 to 15 years, says Mr. Basinski. (Renting, borrowing or obtaining a permit on the black market is illegal, he adds.) Plus, some cities don’t allow trucks to be located in certain business districts and streets because they would affect surrounding restaurants or disrupt residential areas. Fortunately for Mr. Katgely, he doesn’t need to apply for a permit. He owns the parking lot where “Spencer on the Go” is located most of the time. It’s seven blocks from the restaurant, and he keeps menus in the truck to give to customers and direct them to Chez Spencer.

3. Use social-networking technology. Many of the new food trucks alert followers about where they’re located or what daily specials they’re serving at a certain time through Twitter, Facebook and blogs. Tweets or status updates can also help groom a loyal customer base. Mr. Katgely tweets from @chezspencergo to tell followers where and when the truck can be found. So far, the mobile business is paying off: Mr. Katgely says he makes a 50% profit on sales from the vending truck vs. 10% from his restaurant. [WSJ]

Opening a food truck may not be a road paved with riches, but it can provide a way for chefs to reach people without having to raise hundreds of thousands of dollars for rent and renovations.  It was recently reported that the Kogi BBQ truck in LA grossed $2 million last year, and a 50% profit on trucks vs. 10% in a restaurant is another decent argument for the food truck business.

kogi truck

15 COMMENTS

  1. Thank you Lucy. We love to hear from readers because it gives us a better idea of what people want to read about.

  2. Hi,
    Where and how one can lease permits for a mobile food business? It seems in NYC, this is nearly impossible to do. Is there a contact or a website where I can receive some guidance on this?

  3. NYC caps the # of permits, and has not issued new ones in a number of years. One way is to partner with someone who already has a permit. Why don’t you talk to a few of the trucks to see how they did it.

  4. Follow some of the trucks on twitter for a while and you get a feel for where they are welcome and where they get hassled by police, restaurants or other vendors.

    Our Mobile Munchies twitter feed has over 50 vendors. Follow it on twitter and you’ll get a feel.

  5. There is a very long waiting list for permits. A lot of the vendors have to “rent” permits from the owners, kind of like taxi medallions.

  6. I.m in the real estate business right now extremly slow, and my husband just got a pink slip effective the ending of januay 2012..we\’ve been planning on going into the food truck buiness brfore all this came into play, and now to find out that food truck permits in nyc is 10-15 years..just killed me. do you think its a good idea to cook from home and do bag lunches/dinner for offices etc..and i must say, i\’m an excellent cook. so far word of mouth is working, but rather slow.

  7. I want to start a food truck biz but 1) i dont know where to start, 2) obtaining a permit in new York is impossible..how much is the cost to rent a permit or get it on black market? please help or advise….

    thank you

  8. is a permit required if you are not stationary, but mobile (ex. mobile barista) in NYC? Kind of like an ice cream truck concept… driving around to a specific route instead of parking at one location?

  9. Yes, a mobile vendors permit is required whether you park in the same place or move around. Anything not brick and mortar needs a mobile vendors permit.

  10. im wondering about insurance issues and safety if doing a food truck biz in any big city…i would think anything categorized as \"mobile\" would need some kind of liability insurance and im sure any good book would talk about that;and what about the big Q of dealing with CRIME? if someone is dealing in cash,right out there in the open,arent the workers going to be a little nervous in a big city? it always struck me as an odd,but very real problem.

    thx…
    scott

  11. Good afternoon. My name is Dean Mascolo and I am eagerly trying to establish a mobile food truck business in Staten Island. I’m quite confused. Every call I make to the dept. of health gets me the same response, the waiting list is frozen for Staten Island. Every article I read tells me that the city cannot sell all the permits allocated to Staten Island. Is there any way you can provide me with the facts on this? I just completed the course for food handlers in N.Y. And I’m dying to get the ball rolling and obtain a permit, without having to deal with Black Market aquisition.
    Sincerely,
    Dean Mascolo

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