Editor's note: This four-part series explores the growth of the food truck industry. Click here to read parts 1,2 and 3.
While the food truck industry is already in overdrive, many restaurateurs are just starting their engines. To help the new kids in town, FastCasual interviewed several operators, who offered insights on the challenges they face as well as the opportunities offered by the emerging foodservice sector.
Here are their stories.
|Photo courtesy of Jimboy's Tacos|
Jimboy's Tacos, a chain of 43 fast casual Americanized Mexican restaurants in California, Texas and Nevada, has operated food trucks for three years.
"We are expanding, and we're aggressively franchising. In order to get the word out about our restaurants when we expand into a new market, we thought the food truck would help us do that," said Dina Guillen, director of marketing.
The food trucks have been extremely successful introducing the brand to new markets. "We have such a different product, so because we differentiate ourselves that way, we've been able to get into highly competitive markets," she said.
"Having a food truck has expanded our market place in a way we didn't expect," Guillen said.
In northern California, about 30 percent of the food trucks are affiliated with restaurants, while in southern California it's a bit lower, she said.
The quality of the food and the service has nothing to do with whether or not a truck is affiliated with a brick-and-mortar restaurant, Guillen said.
"I haven't seen any extreme differences whether you have a restaurant or not," she said.
The company invested a lot of time researching food trucks and it has paid off. Guillen and her team spent a lot of time looking at trucks' menu pricing and social media strategies.
"Research, research, research," Guillen said."As a marketing tool, I see a huge future for food trucks."
She continues to visit restaurant websites that operate food trucks.
"That's how I've learned how to market it on my end," she said.
In the time the company has operated trucks, the quality of food trucks' products and services has improved, she said. Consumers now have higher-quality expectations as a result.
|Photo courtesy of LazyBones SmokeHouse|
The owners of LazyBones SmokeHouse, a Roseville, Michigan carry-out restaurant, decided to launch a food truck last year before expanding to a second restaurant, said co-owner Bob Smiljanovski.
"It'll help us find a good location, and it'll help us get the name a little further than we've gotten it,” said Smiljanovski, who created his mobile restaurant by buying a used Freightliner truck from Food Truck Stop and adding an oven, fryers, coolers, sink and generator. LazyBones did the specifications for the appliances, which Food Truck Stop installed. The local health department approved the truck. The truck cost $17,000, while the equipment was $60,000. The wrap, logo and some new tires added another $8,000.
Smiljanovski said he expects to recover the investment in a year and a half.
While the food truck business is relatively new to the Greater Detroit area, Smiljanovski has had enough success to hire one dedicated employee to run the mobile business, who takes it to local businesses and special events. He relies on social media for marketing.
Saladworks, a fresh salad franchise chain based in Conshohocken, Pennsylvania, recently launched its first food truck to serve customers while it remodels its stores. This allows the company to continue serving customers and keep workers employed while the stores are closed for remodeling, said company CEO Pat Sugrue.
"That was the genesis of why we invested in food trucks," he said. “However, there will be times when we don't have remodels going on.” They will have the truck go to office parks. "The truck is a beautiful billboard that will let people know that we're there, and will build sales in those office parks," he said.
Saladworks will use food trucks to familiarize new markets with its brand in advance of new brick and mortar stores, he said. "We can be in that area, seeding the brand, before we open up," he said.
|Photo courtesy of Voodoo Kitchen|
Kevin Brune launched Voodoo Kitchen three years ago when he recognized a demand for Louisiana cuisine in central Florida. There are now more than 100 trucks in central Florida, which he considers a saturation point.
"It's not a fad any more, it's an actual entity," he said. "The challenge is to find your niche and stick with your niche."
In addition to operating the food truck as an extension of his daily business, Brune uses the truck to attract catering work.
"The catering aspect is where you can really be profitable," said the Louisiana native and former director of events for the American Culinary Association.
In central Florida, there are a lot of food truck events, which he refers to as "rallies," typically held in town centers, shopping malls and at developments. They each host about 10 to 20 trucks, and participation fees are 10 to 15 percent of their sales.
"Those are ‘hit or miss,'" he said, depending on the weather and how good a job the promoter does marketing the event. Even if a promoter is good, truck operators must do their own promoting and not rely on the events they attend to do the marketing, he said.
Brune, who was motivated to start the truck by his passion to share his state's food, plans to eventually open a brick- and-mortar restaurant.
"To go into it (opening a restaurant) blind with no experience in the restaurant industry, that's a recipe for failure," he said. "There are so many things we've learned, not just (about) the food truck itself, but the business side of the food business." The truck requires a third of the investment of a restaurant.
Brune initially purchased a used catering truck with 50,000 miles on it. He added a fryer, stove, oven, fire suppression system, hood and vent. His total outlay was $50,000, along with a $5,000 generator, which required some reconfiguration that ran another $6,000 to $7,000. He also changed the three sinks, which added another $1,500.
With the food, marketing and labor costs, Brune's total startup cost was $100,000. In addition to himself and his wife, he has two part-time workers.
It is necessary to have plumbing and electricity skills to be able to troubleshoot problems, Brune said. "If you can handle some of the basic maintenance yourself, you're going to save a lot of money," he said.
It is also necessary to be proficient with social media.
"You have to be true to your product," he said. "I try to stay as close to authentic Louisiana cuisine as I possibly can. People who are constantly changing what they do are never going to build a following."
Brune pays attention to RoamingHunger.com, an event scheduling website, as well as Toast Magazine, a site focusing on food industry business practices.
"Not every municipality opens food trucks with open arms," he said.
It helps to be able to make a large amount of servings in advance of events, Brune said. "I can crank out 100 servings in an hour," he said. He recently served 144 people at a function in 90 minutes.
|Photo courtesy of Thai This|
Thai This Food Truck
Ethnic and fresh food have emerged as popular food truck concepts. A case in point is the husband and wife team of Brian and Jang Lawson, who stumbled across a demand for Thai food in Christianburg, Virginia, after serving it to friends. Jang, being from Thailand, brought Thai culinary skills while Brian, a former manager for Outback Steakhouse and a Sysco salesperson, brought the restaurant experience. Two years ago, they launched Thai This Food Truck.
The business broke even its first year and increased profitability in year two. To continue the growth, the Lawsons have added three full-time employees and three part-timers who help with special events.
Like other food truck operators, the Lawsons did their due diligence before investing in the business.
Prestige Food Trucks proved a helpful resource.
"They made it a really easy process and built us a beast of a truck," Brian said. The total investment in the 25-foot Freightliner truck was $98,000. Prestige installed the custom-built kitchen. The two biggest expenses were the truck and the generator.
Prior to taking the truck out to locations, the Lawsons promoted the truck on social media and attracted a following of 5,400 people. They also got an article published in a local newspaper.
"It gave us a lot of exposure in the local area," Brian said. "Making friends with the folks in the newspaper is a good thing."
Giving free samples has also been critical to building sales.
"Once we do, we get business," Brian said.
Having learned the importance of partnerships, the Lawsons have teamed up with a local convenience store. Although they serve food in the parking lot, they have agreed to not sell drinks, forcing the customers to buy their beverages in the store.
"We just kind of piggyback off of each other," said Brian, who expects to pay off the truck a year ahead of schedule and hopes to launch a brick-and-mortar restaurant in the not-too-distant future.
Although the business is now successful, it had its share of challenges. In the first year, for example, the Lawsons were not able to get permission from one of the local universities to park the on the school's campus. That has recently changed, which has helped the business a lot.
"People are not used to the food truck yet," Brian said. "There are not a lot of laws about how to deal with trucks."
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/ Elliot Maras is the editor of KioskMarketplace.com and VirtualCurrencyToday.com.