2 ms·

A couple years ago I was privy to a conversation Danny Bowien (mission chinese) was having with a journalist at his restaurant. Danny had already had been getti

A couple years ago I was privy to a conversation Danny Bowien (mission chinese) was having with a journalist at his restaurant. Danny had already had been getting buzz; and Mission Chinese was about to blow up.. The conversation led to food trucks. What Bowien had to say about the economics of them is that.. They really aren't worth it. You have to purchase a vehicle.. out fit it.. and then you still have to rent at a commissary for food prep + clean up. Plus if you really care about food.. You aren't able to make the best product in a van. Paying rent on a space that has already been outfitted as a restaurant will come out cheaper(depending on decore), and allow you to make a better product.

ChuckMcM 14y ago
Hmm, did you read the article? The priconomics guys went into that where they said: "The costs of running a food truck are relatively modest compared to a restaurent. Phat Thai is mostly a family affair, with only one employee from outside the family. The main expenses outside of labor are $1,000 a week for food and supplies, $200 of insurance, and $120 to fill up the truck’s enormous tank. Its engine is the same one that powered Camaros in the seventies, but even at its terrible gas mileage, a tanks suffices for the week. Bobby’s family borrows kitchen space in a friend’s restaurant, but commissaries complete with a kitchen, waste disposal, and a parking space run up to $1,000 a month. " Not only does it cost less to start from 0 to operating food truck than it does a restaurant, there is also the fact that you (probably) own the truck so rent doesn't go up. On a tax basis you can actually depreciate the truck which you can't do for the restaurant. The food isn't prepared "in the truck" it is actually prepared in a certified kitchen. And then moved to the truck. Granted not all meals work well like this, but a number of them do. So I suspect Danny wasn't thinking things through. Given the surge perhaps a good investment would be a commercial kitchen tailored to support food trucks more efficiently. Sort of a food warehouse kind of deal.
- joonix 14y ago
  The fact that employees are family is completely irrelevant and ignoring it as a cost is pure fallacy. You still have to count their labor at the prevailing wage when evaluating the economics.
  - phreanix 14y ago
    Exactly. Running the truck yourself without pay and celebrating a $5k profit at month end is ridiculous. Then again, any truck that is doing 200 tix for lunch and 100 for dinner is doing just fine, even paying 3 employees a decent wage.
  - ChuckMcM 14y ago
    They cover that too in the article, the truck still comes out ahead.
- rootedbox 14y ago
  Number 1 reason for restaurant failure in the first year.. undercapitalization. Initial capital investment in a food truck is higher than renting a location which already has a kitchen. You are basically setting yourself up for failure. Plus lets get down to the real money.. Profit margins in restaurants suck for the food items (unless you are high end); You make all your money on drinks + booze + deserts. But with food trucks a large percent of the people aren't purchasing drinks, booze, or deserts; as they are getting the items to go.

ChuckMcM 14y ago

Hmm, did you read the article? The priconomics guys went into that where they said: "The costs of running a food truck are relatively modest compared to a restaurent. Phat Thai is mostly a family affair, with only one employee from outside the family. The main expenses outside of labor are $1,000 a week for food and supplies, $200 of insurance, and $120 to fill up the truck’s enormous tank. Its engine is the same one that powered Camaros in the seventies, but even at its terrible gas mileage, a tanks suffices for the week. Bobby’s family borrows kitchen space in a friend’s restaurant, but commissaries complete with a kitchen, waste disposal, and a parking space run up to $1,000 a month. " Not only does it cost less to start from 0 to operating food truck than it does a restaurant, there is also the fact that you (probably) own the truck so rent doesn't go up. On a tax basis you can actually depreciate the truck which you can't do for the restaurant. The food isn't prepared "in the truck" it is actually prepared in a certified kitchen. And then moved to the truck. Granted not all meals work well like this, but a number of them do. So I suspect Danny wasn't thinking things through. Given the surge perhaps a good investment would be a commercial kitchen tailored to support food trucks more efficiently. Sort of a food warehouse kind of deal.

joonix 14y ago
The fact that employees are family is completely irrelevant and ignoring it as a cost is pure fallacy. You still have to count their labor at the prevailing wage when evaluating the economics.
- phreanix 14y ago
  Exactly. Running the truck yourself without pay and celebrating a $5k profit at month end is ridiculous. Then again, any truck that is doing 200 tix for lunch and 100 for dinner is doing just fine, even paying 3 employees a decent wage.
- ChuckMcM 14y ago
  They cover that too in the article, the truck still comes out ahead.
rootedbox 14y ago
Number 1 reason for restaurant failure in the first year.. undercapitalization. Initial capital investment in a food truck is higher than renting a location which already has a kitchen. You are basically setting yourself up for failure. Plus lets get down to the real money.. Profit margins in restaurants suck for the food items (unless you are high end); You make all your money on drinks + booze + deserts. But with food trucks a large percent of the people aren't purchasing drinks, booze, or deserts; as they are getting the items to go.