Midtown Lunch

Grub Street has a great look at all the things that go into opening a food truck in New York City, including start-up costs, obtaining permits, and finding a location. It’s spot on about permits and the difficulty finding a spot to vend in, though I would caution that it’s a little too optimistic about profit margins:

“According to one business plan we’ve seen (but never came to fruition), a pizza truck seeking $300,000 in start-up capital expected to make money right away. High volume and excellent margins can be a reality for trucks. For this pizza concept the profit margin was estimated to be over 50 percent, as compared to a good restaurant, where the margins aren’t greater than 10 percent, if you’re lucky.”

Is that true?

Saying that “high volume and excellent margins can be a reality for trucks” is like saying that recording an album of music can net you millions of dollars. Sure it happens, but few carts have the benefit of high volume and excellent margins. It’s more than likely one or the other. And if the Dessert Truck story from Friday is any indication, even some of the high profile trucks that have opened in the past two years are struggling to make money. And I’m not sure we should be taking our cues from a business plan that never got funded. My guess is it didn’t take into account the number of vending days you lose to bad weather, how tickets can adversely effect bottom line, and that it’s virtually impossible to be profitable from day one. It takes time to find a spot that works, and build up your audience.

The end of the guide makes a point to say that many big restauranteurs in the city “big restaurateurs in the city have passed on trucks because of the complications around permits and location.” So what does that tell you when guys who do nothing but make money open restaurants in New York City don’t think opening a cart is worth it?

“Don’t let that scare you,” Grub Street says. Really? I say be afraid. Be very afraid.

Related:
SVP Wants to Help You Quit Your Job and Open A Street Cart
Rule #1 of Vendor Fight Club is You Don’t Talk About Vendor Fight Club
Is The Current Street Vendor Explosion Sustainable? LA Times Says Yes, I Say No.