Thursday, November 15, 2012

Trucks Are Closing: What's Going On?


Over the last month, several high profile food trucks have closed their doors, including Food Traveler Truck, The Bacon Wagon, Zombie Food Truck and The Wiener Man.  Is it coincidence that these three trucks are all Fort Worth based? Is the food truck market shrinking instead of growing? What is going on?  are all questions I get every time I posted to say a truck is closing.

After watching the industry for the last 16 months, I am not sure that I have any better understanding of which specific trucks are going to fail, at any given time but there are some trends among the trucks that are closing and they seem to revolve around the two most important resources for any business owner, time or money.



To put things in context, since I have been blogging about food trucks, there have been approximately 85 gourmet trucks that have rolled, somewhere in the Metroplex.  In the same time period, approximately 19 have closed their doors. The a majority of these closings seem to be because of one or two things.

1. Time:  a high number of the trucks have closed were right around their one year anniversary,  City Street Grille, Crazy Sisters, The Wiener Man all went a few weeks post one-year.  The Bacon Wagon, just a few weeks short.  One year is long enough to determine if the food truck lifestyle is a good fit for the owner. They have been through a brutal summer  and in the case of early 2012, a fairly mild but stressful winter.  They have had 52 weeks of placing orders, standing on their feet, scouting locations and plenty of time to question their passion.

For those truck owners with families, like Zombie's owner, it didn't take a full year to determine that owning a food truck took too much time away from family.

2.  Money:  Quite a few food truck owners get in to a truck thinking it will be quick money. Nothing could be farther from the truth.  In reality, for most truck owners, for the first year, the hope becomes breaking even. For many, they do, but for some, the sinking in to debit comes deeper.  At some point, especially with those owners with families, the realization that they can get another type of job, that pays more and most likely  has less hours has a strong allure. 

Fort Worth vs. Dallas
People also ask if there is something with Fort Worth, since it seems that a disproportional number of Fort Worth trucks have closed.  26% as compared to 8% of Dallas trucks.   From the outside, it seems  harder to operate a truck in Fort Worth than Dallas.  The laws between the two cities are significantly different, both in type of trucks and how they can operate.  Fort Worth is more lax in truck design, allowing trailers, over sized trucks and trucks retro-fit by the owner to all operate freely.  Dallas requirement are more stringent in terms of size, as well as requirements regarding the standards for the retro-fitting.   Fort Worth does not require the trucks to operate out of a commercial commissary but allows designation of commercial or private kitchens as a commissary.  Dallas requires trucks to operate out of a commercial commissary, although rules changes last year loosened some of the restrictions on which  commissaries can be used.

The most notable differ race between Dallas and Fort Worth is the areas in which trucks can operate. With the exception of certain areas in the Central Business district, trucks are allowed to freely operate in Dallas, subject to an agreement between the property owner and the truck operator and a few code restrictions regarding being on paved ground, access to restrooms and other minimal issues.   Trucks can rotate through locations and have multiple trucks on location without additional permits.  This is the primary reason Dallas has truck events almost every night of the week, especially when they are put together by the trucks, who don't charge other trucks to be there.

In Fort Worth, the food truck scene has built up around food truck parks, primarily because of restrictions concerning where and how many trucks can park at a given location. When a truck owner and business owner agree that the truck can park on the business property, the truck must apply for a Certificate of Occupancy from the City. The application must include a sketch of the parcel of land and only one truck can hold a Certificate of Occupancy for that parcel, in accordance with the Rules.  The City does allow a variance to the Certificate of Occupancy processes, which is how the food truck parks operate. The owner must apply for this variance and I am told the process is time consuming to complete.  Many trucks prefer operating at the parks as it takes a bit of the hardest part of operating a truck, finding locations, out of the equation. However, the trade-off is the amount of rent paid to the park owner and being subjected to the business decisions made by the park owner. 

Fort Worth has lower start-up costs which are significantly off-set by the limited locations in which to operate. Dallas trucks have more restrictions at start-up but once they get permits in Dallas, they can get them in every other city in the Metroplex that allows trucks. This is not true for Fort Worth, where a small trailer, operating out of their home is most likely limited to doing bushiness in Fort Worth.

Even with all these restrictions on truck operations, in reality, the Dallas Fort Worth food truck scene is thriving. Nationwide, 23% of restaurants will fail the first year.  I don't have the numbers for a 12-month period in DFW, but in the 16 months that I have followed the industry, 21% of the DFW trucks have closed their doors. The percentage is higher, in Fort Worth with 26% and lower in Dallas with 9%. 

More and more, trucks are now operating  between both Dallas and Fort Worth, even trucks that were adamantly committed to one city or the other have recently been seen passing city limit signs in order to expand their customer base. With this mobility, the potential for growth increases, albeit tempered by the increase in costs of fuel and wear and tear on the trucks.  Despite the recent closings of high profile trucks, I do not see an end to the food truck scene in DFW.  Like all new industries, the field does have some leveling off, while those with great product, passion and resources thrive and others find other business opportunities.

post signature

7 comments :

  1. Great article. As an individual who is going through the process of finding a truck to build out in the expectation of opening around the new year, I am glad to hear that Dallas is more accessible. I was also glad to hear the recently approved ease of restrictions on Denton.

    ReplyDelete
    Replies
    1. Yes, Denton opening is a great thing! I predict by this time next year Denton and parts of Collin County will be filled with trucks!

      Delete
  2. This is a great post! It's all an interesting bsuiness and we are lucky to have you documenting and observing it!

    Lilly

    ReplyDelete
  3. Thank you so much for keeping us all informed. As I read your blog and keep up with the latest news in the industry it eases some of the fears of potential new operators, including myself. It also raises important questions and considerations. Its slow going but I need to be smart so as not to burn out or cash out. Thanks again!!!

    ReplyDelete
  4. Are there any events with food trucks?

    ReplyDelete
  5. Are there any events with food trucks?

    ReplyDelete
    Replies
    1. I am interested in opening a mobile store in Texas. Looking for truck events to be a part of and have something unique and different.

      Delete

 
TEMPLATE ERROR: Unknown runtime binding: else in widget