How To Open a Food Truck

Emerging industry gives new meaning to the term 'fast food'

Patrons gather around the Pollo Palenque taco truck in the p
Getty ImagesIt's a car! ...It's a van! ...It's a taco truck!
By Jon Fortenbury, Schools.com, and Mack Gelber

There's a reason ABC News called food trucks the "hottest new business venture."

According to IBISWorld, a leader of business intelligence and industry research, the street vendor industry, which includes food trucks, has reached a revenue of one billion dollars, with approximately 30,810 businesses and 35,502 employees. It took the food industry by storm, with hundreds of new food trucks opening each year. But before you race to join the food truck industry, there are some things you should consider.

Is the food truck industry for you?
To determine if you should go into the food truck industry, consider these three facts:

1. A lot of food trucks go out of business: Though it's tough to put an exact number on it, one estimate in a Huffington Post article showed that of the 100 food trucks that opened in 2012 in Los Angeles, 35 of them have closed. And though perhaps California doesn't represent the situation everywhere, no one doubts that the situation is similar elsewhere. Can you deal with that risk?

2. Food trucks thrive in big cities: As IBISWorld pointed out in its research, the food truck industry is "located in areas which have a large population" and is "more concentrated in the most populated cities, and particularly, in the central parts of these metropolitan areas." According to Zagat, the American cities with the "hottest food-truck scenes" are: New York City; Chicago; Miami; Austin, Texas; Portland, Ore.; Los Angeles; Cleveland; Boston; Houston and Washington, D.C. If necessary, would you be willing to live in a large city where food trucks thrive?

3. Food trucks are still businesses: With its flexible location and hours, it may be tempting to lose sight of the fact that food trucks, in many ways, still run like any other business. Have you earned a bachelor's degree in business or studied independently on how to build a successful business? Since opening a food truck is entrepreneurial, a business-related degree may not be required, but anyone starting a business may benefit from it.

If you can accept the risk, you're open to the possibility of relocating if necessary, and you prepare yourself for the business side of food trucks, then you may be ready to enter the food truck industry.

How to break into the field
You can't just buy a vehicle and call it a food truck. There are more hoops than that to jump through. According to Mobile Cuisine magazine, there are several steps to undergo as you're breaking into the food truck field, including:

• Decide on a menu, which requires demographic research and perfecting recipes
• Choose a location, which requires finding legal spots to park and areas that are popular
• Decide if you're going to rent a food truck ($2,000-$10,000 a month, according to the article), buy a used food truck ($10,000-$75,000), buy a new food truck ($75,000-$125,000) or buy a custom food truck ($125,000-$300,000)

And then, according to the article, there are legal considerations, such as finding a legal spot to park the truck when you're not using it, taxes, licenses, insurance and more. A business degree or a knowledge of how businesses run could be beneficial when tackling all of these factors. Some culinary degree programs also offer instruction on running a food business.

Permits
Okay, so you've got the truck. You've retrofitted it with a six-burner flat top, spray painted the words "Korean Tacos" on the side, and registered on your city's live food truck map. But until you've applied for a permit with your city's health department, those tacos aren't officially street legal. The cost of permits varies from one city to the next, from relatively cheap (Philadelphia, $150) to wallet-busting (Los Angeles, $695). But even if you have the dough, actually getting your hands on a permit can still be a major headache.

According to PBS, New York City caps its permits at 5,100 vendors; wait lists for citywide truck permits are currently closed. This means that most of the estimated 10,000 vendors on the street are using black market permits, which could run you as much as $20,000, with or without your kneecaps. That's worth keeping mind if you regularly patronize food trucks, since it suggests that all permits are not the same--and that some trucks may not be in compliance with local health code requirements.

The future of food trucks
No one can be certain, but there seems to be a general consensus on the food truck industry's future. According to an Emergent Research report published by financial company Intuit, food trucks are expected to generate between 3 and 4 percent of the total restaurant revenue (about $2.7 billion) by 2017, which is a fourfold increase from 2012. Over time, according to the report, food trucks will expand to smaller cities and suburban areas, gaining share in catering and special events, such as weddings.

The food truck industry has a bright future. Deciding to be a part of it takes a lot of work. You'll need money up front, a passion for and knowledge of food, some degree of business acumen, a desirable menu and location and a good understanding of the law. Only you can make that call.

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Jon Fortenbury is an Austin-based freelance writer who specializes in higher education. He's been published all over the place, ranging from the Huffington Post to USA Today College, and is a featured contributor to Schools.com. Follow him on Twitter. A version of this article was originally published on Schools.com.

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Rick Myrick

Mobile Cuisine has recently launched a new Food Truck Jobs section. For anyone interested in finding a job in the food truck industry take a run over to http://foodtruckjobs.mobile-cuisine.com

July 22 2014 at 2:33 PM Report abuse rate up rate down Reply
stinkyheadzzz

it's a 80-100 per week commitment most won't/can't do it for long

March 07 2014 at 5:12 AM Report abuse rate up rate down Reply
Eva Cashe

Where I live it's a refreshing change to enjoy a meal that will not break your pockets. There are three reasons I would support the food trucks,
1- It's economical
2- It's legit
3- A lot of restaurants also have food trucks on the road realizing the MONEY that can be made while still having guest come to there brick and mortar establishment.

It's fair game for all and yes they do pay taxes, the truck has to be registered . The food trucks are inspected by the health department. I'm all for it.

March 06 2014 at 7:26 PM Report abuse +1 rate up rate down Reply
fernbergbear1953

Where I live, I refuse to by from them. Thee reason is, the other places pay taxes that these scamers get away without paying. For one, no building. They don`t have to comply with regular inspections, which the industry as a whole does. Nope.... I`ll support my local real business instead.

March 06 2014 at 8:57 AM Report abuse -2 rate up rate down Reply

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