With food trucks gaining popularity, many restaurants are finding that it makes more sense to join them than fight them.
That much was evident from a panel discussion session I moderated on driving sales with food trucks at the Restaurant Franchising and Innovation Summit in Dallas last week.
The panel featured three food truck owners who shared their insights on how they drive sales.
|Jae Kim takes a question.|
- Keith Hill, co-founder of I Love Bacon in Huntsville, Alabama, a food truck specializing in bacon recipes.
- Kyle Hollenbeck, owner of Aioli Gourmet Burgers & Catering in Phoenix, Arizona, specializing in burgers.
- Jae Kim, founder of Chi'Lantro in Austin, Texas, a Korean barbecue restaurant, food truck and catering company.
The men gave insights on every aspect of the business from finding good locations and business management challenges to meeting government regulations.
The questions the attendees asked about how to succeed with food trucks indicated that many restaurant owners are anxious to join this growing channel. Most of the attendees were from fast casual franchise organizations that were seriously considering adding food trucks to increase their brand awareness and at the same time cash in on the growth food trucks are experiencing.
But the expansion isn't only happening one way.
The panelists indicated that food trucks offer an excellent learning ground for opening a brick-and-mortar restaurant. All three of them have or will have brick-and-mortar restaurants in addition to their trucks.
Hill, who launched his first food truck in 2014, is now working on his first brick-and-mortar restaurant. He initially saw the food truck as a practical way to get into the foodservice business. He said it made more sense to spend $50,000 to start a food truck as opposed to having to spend a lot more to open a restaurant.
Now that he has two trucks and is looking to grow, his business plan has changed a bit. He thinks he can operate a restaurant with fewer employees than it would take to operate three food trucks and make more money.
While the hour-long panel discussion covered a variety of topics, one take-away was that there are various approaches to running a food truck business.
Two of the three panelists said they were using spreadsheet accounting, while one is using a software program, for example.
All said they are using mobile apps that allow customers to order and pay.
Knowing how to plan for events, inventory management, government regulations, food safety and employee recruitment were also topics of extensive discussion.
Given that the amount of business is not always predictable at food truck events, Hill of I Love Bacon said he asks people who have attended the events in the past – either the organizers or others who have attended – what to expect.
Hollenbeck of Aioli Gourmet Burgers & Catering said he asks the organizers how many attendees are expected and how many competing food trucks there will be. He also asks if any other trucks will be selling burgers, which is his specialty.
Kim of Chi'Lantro said inventory management on the truck is a challenge since there are a lot of uncontrollable factors. Sometimes he comes out ahead, while other times he loses money because he either runs out of food or doesn't sell everything he prepares.
There are special events in Austin, where Kim knows from experience how much to prepare, however. In some cases, he asks the event organizer for an upfront minimum payment based on an hourly return.
On the topic of government regulations, the panelists agreed that different cities have different rules and in some cases, different tax requirements. The panelists viewed regulations as a necessary task.
When I asked if regulations were doing a good job making sure the trucks are following safe food handling practices, the panelists said they were. I raised his point because it is an area that calls on the food trucks to be proactive as their industry grows.
On the topic of food safety, the panelists said that as food specialists, they place a priority on safety. Hill said he uses the National Restaurant Association's ServeSafe program, for example.
No doubt, many if not most of today's food trucks share a commitment to safety as part of their dedication to provide customers a satisfying experience. But at the same time, the industry needs to be proactive with food safety because as food trucks increase, so will the likelihood of safety problems.
The food truck industry has done a good job of maintaining safe practices to date, but for this to continue, truck owners should be taking the lead in seeing that workable regulations are enforced.
As for the biggest challenge the truck owners face – they were unanimous: finding good help. It's a challenge that all restaurant segments, unfortunately, understand.
Elliot Maras Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.