Road Show

Road Show

Thinking of investing in a food truck franchise? Here's what you need to know.

We’ve recently worked with several food-truck concepts that were franchising their businesses. Food-truck businesses can be great franchise opportunities if their concept is unique, they have great distribution, and they properly structure their territories. These franchises are usually affordable and can attract a cult following of foodies. Here are a few special considerations that buyers need to know.

COST AND MODEL VARIATIONS

Some franchises require their franchisees to completely outfit a new food truck to their specifications. This can cause a franchisee’s initial investment to skyrocket well into the $100,000 to $200,000 range. Given the typical operation and sales of an individual food truck, it could take a long time for a franchisee to break even.

Other food-truck concepts may offer their franchisees the ability to choose between a full-size food truck and a trailer. Some concepts may even allow franchisees to purchase and retrofit a used food truck or trailer. This can really be an attractive option to a prospective franchisee shopping for brands on a budget.

All franchisors will probably require the franchisee to submit his or her plans and the final model for approval by the franchisor.

COMMISSARY COSTS

Most states, cities, and municipalities require food trucks to be tied to a specific kitchen. This allows the government to know where a food truck is based in the event of a health-related issue. This means food-truck franchisors will require their franchisees to utilize a “commissary” kitchen.

Commissaries have become very popular in cities with lots of food trucks. They have large kitchens that food-truck owners can rent for a monthly fee.

Some food-truck owners will use the kitchens to prepare their food while others simply pay the monthly fee to satisfy the local government’s requirements. Either