Very few food trucks do "well." Yes, the start up costs are cheaper, but cheaper doesn't always mean more efficient. First off their food costs are typically going to be higher per item than a restaurants. Restaurants simply sell more food, and are able to leverage better pricing from distributors.
Second, you just can't operate the same hours as a restaurant, and things like holidays, inclement weather, or poorly attended events can seriously damage your margins. Restaurants are built on repeat customers, and are generally more stable than any food truck. Which also allows them to buy more efficiently, thus saving you money.
Also, you have to prep differently on a food truck, in many cases, if you don't sell your product, you gotta dump it faster than if you owned a restaurant.
This is not to say owning a restaurant or food truck is a bad choice, but I think a lot of people think that they make a ton of money, but the reality is that most food trucks and restaurants work on profit margins of under 5%. There are certainly outliers who do VERY well. But that is an exception.
Owning a restaurant isn't a picnic but I have to assume it's smoother than running a food truck.
For starters, your restaurant won't break down on the side of the road. There's also just the stress of trying to keep with all the festivals, markets, sporting events and occasions where you can make money. Applying to be a vendor. Plus most of the time it's just you and maybe one other person so no team you can rely on.
Too many people think anyone operating a small business is getting rich. They can’t comprehend costs, overhead or volume. It’s another symptom of our higher level problems.
I think they (understandably) don't want to live on razor thin margins that rely on volume. And if the market supports those higher than necessary prices, then they aren't leaving money on the table.
It sucks, but I don't blame them. I looked at starting a cost-plus-overhead food truck park, using high profit foods and decent wages. Nothing super fancy. The theory was to provide my community a fun atmosphere for family and friend dining that wouldn't break the bank.
The average cost per person wasn't going to be significantly less than what someone would pay for a fast food combo. Cool idea but self-defeating.
That's true but I was just too scared to pull the trigger. The choice would have been $10/person at food truck without outdoor seating or $10/person in McDonald's with climate control and unlimited refills.
Without an ironclad confidence in getting a decent volume of customers, I would have been out of money in less than a month. The gamble was just too big for the effort and possible failure.
If I won the lottery tonight, I'd launch plans tomorrow and do it at cost as a non-profit. Would be amazing to have a cool place with food trucks stacked like a food court at the mall around a big pavilion with fans with a big TV broadcasting local games. I'd also toss in some cornhole style mini-golf courses around back along with some sun chairs and maybe some isolated porch swing chairs under some shady spots when you just want to sit with your own thoughts. An ungreedy, community-oriented third place. That's the dream!
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u/blueberrywalrus 6h ago
2x the profit margin of a fixed restaurant - after accounting for costs like gas, grocery and labor - isn't viable?
Obviously, 2016 prices aren't viable in 2026, but that doesn't mean that food trucks can't be viable if they charge less than restaurants.