The food truck industry has witnessed steady growth in the past two decades. With close to 5,000 trucks employing roughly 16,000 workers throughout the US, the food truck business is one of the fastest growing segments in the food industry. According to our experts in the food and beverages sector, the following are the five reasons why food trucks make sense as top choices for entrepreneurs:
1) Less initial investment and operational cost
On an average, the initial investment involved in a food truck is as low as $50,000, while costs involved in a high-end dining restaurant can easily run into the millions. Especially for those who have just started off in the food industry, food trucks provide an affordable opportunity to make a mark.
Similarly, running a food truck does not require a big collection of people like cooks, kitchen managers, cashiers, servers, etc. Rather, the operational cost is limited to food supplies, gas, and a staff of 3 to 5. Aspects like monthly rentals, related taxes, and maintenance and repair expenses are almost negligible in the food truck business.
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2) Ease of brand building
Brand building takes years. In the food industry, the business is known more by the brand name than the names of its founders. The inherent dynamism in the food truck business allows the owners to build a brand in an easy and quick manner. Given that the background work involved in running a truck is relatively minimal, it is not difficult to make changes in the business plan and give a major facelift to the brand image. These changes can be in the form of choosing a new location, customized menus, or experiments with new recipes. Any minor change in even one of these verticals is sure to bring in immediate results to the business, which makes brand building a much easier process.
3) Customer loyalty
What differentiates a food truck from a restaurant or a high-end hotel is the motley group of customers it attracts. Right from kids, seniors, office-goers, and millennials, the food truck caters to an eclectic group of people.
Lately, the food truck business has gotten a major boost in the Asia-Pacific region. This is mainly because food trucks are positioned as an inexpensive and quick source of hygienic food. This aspect of food trucks has helped them win the undisputed loyalty of their customers. And, ironically, most of the latter are highly health-conscious millennials.
4) Flexible location with the food truck
According to our latest report, annually, 60% of new restaurants go out of business due to wrong choice of location. Food trucks, being mobile in nature, are immune to this problem. Owners of food trucks can relocate and experiment with several locations to identify the best fit for their business.
5) Uncomplicated legalities
The legal aspects involved in maintaining food trucks are relatively simple and uncomplicated. Typically, the documents required to run a food truck are:
- Proof of ownership, proper identification, and vehicle license
- Proof of district-issued food manager identification card
- Food purchase record and recordkeeping
- Depot, commissary, or service support facility meets needs of vending unit operation
- Copy of license for the service support facility and/or a recent inspection report
The seamless legal process and minimal red tape is a major reason why food trucks are so popular amongst prospective restaurateurs and entrepreneurs. Food trucks offer a chance to start small and build a reputation and fanbase. Eventually, this popularity can be profitably cashed in with bigger and costlier investments.
