Right Place, Right Time

Benefit from food trucks without having one of your own

By  Linda Abu-Shalback Zid, Senior Editor

Photo courtesy of Kogi BBQ

RANCHO PALOS VERDES, Calif. -- If Ray Villaman's friends would have told him he would be in the food-truck business decades ago, he'd have said they were crazy.

Back then, the president of Mobi Munch Inc. thought of them as the so-called "roach coaches" and "hot trucks" that provided a quick bite for construction and industrial workers.

But in 2008, everything changed when Roy Choi, who couldn't afford to start a brick-and-mortar restaurant, launched his Kogi BBQ Taco truck. Promoting the truck and providing where it would be located using Twitter and Facebook, Choi had more than $2 million in sales his first year. Today, Choi has five trucks and more than 80,000 followers on Twitter.

Today there are 4,000 licensed food trucks in LA alone, many of which are gourmet trucks or part of the "modern food truck movement," as Villaman calls it. (His Mobi Munch website helps customers track 400 of the gourmet trucks.)

"Many people thought it was a fad; it's a trend and it's here to stay,” Villaman told the audience of suppliers and c-store retailers at CSP's Outlook Leadership Conference, held here in August.

Food trucks might be seen teaming up with venues, such as popular bars, that don't serve food, or providing catering for events.

Food trucks also are often invited to the parking lots of big-box retailers, such as Home Depot, "because they know it's a draw, they know it's a traffic generator," Villaman said.

And it’s not just big-box retailers who can benefit from food trucks. While Home Depot might be seeking the traffic a food truck might bring, a c-store with a parking lot in a prime location could take advantage of that traffic, as well as make a profit from the truck itself. "If your property is that valuable, these food trucks would pay anywhere from an average of 8% to 10% of their sales back to the business that invited them to that property," Villaman said.

Running a food truck is not without its challenges, including vendor and inventory management, maintaining and servicing trucks and stocking and cleaning trucks. This makes partnering with existing food trucks all the more appealing. "What a nice situation to be in where you're mostly serving as a landlord because you have the right location and you have a high visibility--and there's a multitude of cuisines you can provide to your customer and take a cut of their sales,” Villaman said.

Villaman shared additional details during a question-and-answer session:

  • The trucks are typically rented by their operators for $2,500 to $3,500 a month.
  • Buying a truck new can range from $125,000 to $200,000.
  • A good operator should generate 15% to 20% margins "pretty confidently."

Mobi Munch is a mobile foodservice infrastructure company and online marketing channel dedicated to providing established chefs and restaurateurs with an integrated online and offline platform for launching restaurant concepts aboard state-of-the-art food trucks.