5 Advantages of Opening a Food Truck Instead of a Regular Restaurant

Why You Should Open a Food Truck Instead of a Regular Restaurant

With a rise in youth spending, middle-class expenditure, conscious consumerism, mobile lifestyle and requirement of food on the go, the Food Truck model has become quite a rage among the Indian population. The future of food trucks seems bright with their projected revenue growth at a rate of 3.7% in the next five years. If things work out this way, the industry total will climb to $1.7 billion, which is a huge growth for a newly introduced industry. Find out how to open your own Food Truck Business here.

With low investments and minimal risks involved, Food Trucks are now becoming the popular choice for opening a restaurant business, especially for first-time restaurateurs.

Benefits of Running a Food Truck Over a Regular Restaurant

Read on to find out why you should open a food truck instead of a regular restaurant.

1. Food Trucks Require Low Initial Investment

Opening a food truck is a much lower investment as against a sit-down restaurant. This alone is a competitive advantage of running a food truck instead of a regular restaurant as the money you save in setting up can be used for other operations like marketing or menu engineering. The only main cost is buying your own truck, which is also avoidable if you take advantage of the growing food truck rental business. With an old truck and re-used equipment, you can set up your food truck in less than Rs 10 Lakh!
Next, you will need to outfit your truck with the right equipment, including exhausts, grillers, heat lamps, and any other specialty equipment your particular food needs.
Food trucks are a steal on the wheel. A typical street vendor in Mumbai, for instance, makes an average monthly profit of 40 to 50 thousand rupees; the basic food truck is priced at Rs. 21,500 which is inclusive of added charges for upgrades like- extra hot plates, water filtration, and refrigeration units. Three-year sales and lease options mean that vendors don’t have to break the bank to get some fancy new equipment.

2. Food Trucks Involve Low Operation Cost

Owning a restaurant requires you to invest in expensive utilities, hire a wide range of staff including cooks, cashiers, servers, kitchen managers, cleaners etc., and pay property tax if you are the owner of your real estate or monthly rentals if the property is on rent.

On the other hand, operational costs of a food truck are month-to-month and limited to food, supplies, and gas. You don’t need to have a full staff; just a small team will do and most of your taxes will be much lower.

Repairs and fixes required in a restaurant can also burn a hole in your pocket. There is no denying that a brick and mortar real estate requires continuous maintenance. Maintaining furniture, electrical appliances, and other kitchen equipment, restaurant decor, leaking pipes or ceiling, etc.,  all require a lot of efforts and of course- money.
Food trucks, on the other hand, can do well with just a little maintenance and repairs here and there over time.

how much does it cost to start a food truck

3. Food Trucks Attract More Customers

With better quality food (as compared to the street vendors) at a marginally lesser price, Food Trucks have become the latest fad among the consumers as well.

  • Inexpensive: Almost all food trucks are pocket-friendly; a meal at food trucks starts from as low as Rs.50. The famous Lalit Food Truck which was started by the Lalit Hotel on Barakhamba Road claims to target audience that cannot afford a five-star restaurant, yet desire a scrumptious, quality meal. Vegetarian dishes at the five-star associated food truck start at Rs 150-Rs 200 and non-vegetarian dishes start from Rs 200.
    Since the food costs are low, you can please your customers with budget-friendly meals.
  • Health and Hygiene: Food trucks are a safer and healthier alternative to street food.  Food from street vendors is generally considered unsafe for consumption. With growing health consciousness, more and more people are switching to alternatives like small restaurants and food trucks.

4. Food Trucks Can Experiment with Location

Restaurants rise and die with their location. Around 60 percent of new restaurants fail within the first year. And nearly 80 percent shut before their fifth year of operation; one of the major reasons being poor location and high rentals. Fortunately, Food Trucks are immune to this problem, they are mobile, and you can choose the location of your food truck as per your choice. If your services do not seem to work well at a particular location, you can move to some other location and see if your business model is capable of thriving there.

Apart from keeping all your documents ready while you are on a move, you will just have to take permissions from the RWAs before parking your food truck in posh residential areas.

You can use this mobility of food trucks to attract potential customers as well. Being a food truck, it will be far easier for you to take part in different events and food fests so you can introduce your dishes to your potential customers. You can also strategically change your location on a daily or weekly basis depending on the rise and fall of footfall in some areas.

Just remember to choose your location which is easily accessible (for cars and other vehicles), and sees ample footfall.

5. Food Trucks Allow You to Build (Or Expand) A Brand

With a mobile food van, you can build your brand at a smaller level before expanding into something much larger, such as a sit-down restaurant or possibly franchising your trucks. A good example would be Ramji Chaiwale, a Bangalore based startup who started with a single food truck and now has 6 stores in the city and is expanding to 20.

Dynamics of a food truck are quite different from those of a sit-down restaurant. Analyzing the best location, trying new recipes, modifying plans and menus can be a lot easier in a food truck model as compared to a restaurant. Since sit-down restaurants are of a fixed nature, it can be difficult and expensive to change your brand name and image if needed.

A food truck allows you to have better control and more flexibility. This is seemingly the best avenue for first-time entrepreneurs since they can research, and experiment with their model before they venture into establishing a sit-down restaurant with high investments and risks. After gaining a comprehensive knowledge, you can then dive into a conclusion about what would work the best for your sit-down restaurant. This knowledge will help you in your business expansion.

The future of food trucks clearly seems to move high on the profit graph in developing India. If the revenue growth continues to grow as estimated, there are tremendous scope and growth opportunities for entrepreneurs who already are, or wish to step into the food truck business.

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