From what I can tell there’s no true consensus when it comes to the percentage of food trucks that fail. But if I had to make a wager on what that percentage would be: Probably somewhere in the ballpark of traditional restaurant failure rates with 60% closing in the first 3-years according to this article.
To find out why some food trucks don’t make it, I emailed dozens of food truck owners and industry experts asking them one question: Why do food trucks fail?
Below are the responses I received along with the name of the food trucks they own or manage. Do you agree with their assessment? Share your perspective in the comments section below or on Facebook. If you want to learn about starting a successful food truck, read and listen to out our full Food Truck Case Study.
They don’t understand the food service industry. They think of it as some kind of investment. Hiring some one else to run the truck. There is a huge difference between being a good cook around the house and being able to run the business side of food service. You need to have control of your costs.
Steve Lott from Big River Pizza
In my opinion food trucks fail for a number of reasons. I think people are under the impression that if you set up somewhere, people will just flock to you. You have to do the time in order to establish a presence. I also think that people underestimate the amount of work involved in running a food truck–the work is in the haul, but there is prep and actual cooking as well and that food has to happen in a timely manner. Most of the truck owners I know are very good cooks, but there is that, too–you have to have to have exceptional food.
I am a trained chef, but before that I was front of the house for many years. I think that you must have a way with people–gift of gab sure has helped me.
Teri Fermo of Bohemia: Moveable Feast Caterers in Tulsa, Oklahoma.
I feel that many Food Carts fail because they spread themselves too thin. Embrace what’s different about the restrictive environment of a a cart. Focus. Do one item, ideally something unique, do it VERY well, and offer it at a good price.
Ryan Carpenter of Moberi serving up smoothies and super foods in Portland, Oregon.
I would say food trucks fail because people don’t realize just how much time and effort goes into a food truck. Also, costs are underestimated. Finally, food trucks are a growing business and you really need to find a way to be unique in your city.
Gyros by Ali in Tulsa, Oklahoma.
From our experience a lot fail from lack of knowledge of The Restaurant business , ordaniance’s , Laws and the Food Truck industry it’s self.
“Do Your Homework”
Jeff and Kim Toney, from Pop’s Smokehouse BBQ in Memphis, Tenn.
I think it’s pretty simple…it’s the old rule, ‘the company who knows their customer wins!’ So apply it to whatever you’re doing. In this case, we’re selling food, mobile. Where do they work, shop, etc. Also being a cash only operation is not customer friendly. Everyone uses a debit card. And last, know your competition!
Mike’s BBQ straight out of Tulsa, Oklahoma.
1). Low profits – expenses out weigh sales and cannot pay employees and suppliers
2). Infrastructure – FoodTruck cannot handle volume, Equipment is bad and breaks down, Commissary is not good and expensive suppliers.
3). Menu. – Food is not what customers want, takes too long to prepare and is too expensive,
4). Service – employees are rude to customers, too long to deliver food to customers, bad customer experiences.
5). Marketing – FoodTruck is not appealing to customers, not using Social media, no Website and not enough new business contacts.
6. Limitations – trying to handle too large of events, not bringing enough food or having too much food causing expensive losses, Low average ticket and low volume resulting in Low profits.
Mark Hamilton of Mark’s Grill based in Memphis, Tenn.
We are approaching our 2 year anniversary in March, in my opinion, I believe that many people that decide to get in the food truck business do not appreciate the amount of work involved, which is the number one reason why they fail. They are not prepared to work so hard, therefore, throwing in the towel within the first year.
It is very different than running a restaurant. In a restaurant you have your staff for all the different positions required to run the business along with the fact that you open in the am & close in the pm. With a food truck, you are the Chef, prep cook, line cook, dishwasher, cleaning crew, etc… If you are running a lunch service along with a dinner service, the truck has to be turned over for each service and then travel to each venue. As you can see it is double if not triple the work.
Social media is key in building your following, which, many are not prepared or knowledgeable on how to do this. The requirements from the state, county and cities are more challenging, with multiple & more frequent inspections. The hours are loooong.
Dee Mendoca the owner / manager of Bem Bom Food Truck and Catering in Orlando, Florida.
Food trucks fail for the same reasons as restaurants. Owners often lack operating capital, a true understanding of cash flow versus profit and lack an executable plan. And the low barrier of entry attracts a high number of operators that may not be prepared for small business ownership.
Angela Petro owner of Sweet Carrot Casual Cuisine in Columbus, Ohio.
In our experience, food trucks fail due to not having a good product or the business being mismanaged. Truck owners must work constantly at satisfying their customers, improving their craft to bring delicious food items out at a good frequency. Owners must be involved in the business on a day to day basis and not leave it to employees to handle important responsibilities. Speed is also a factor, from the time you take an order to the time you serve that order.
Andrew Capron of Boners BBQ serving the Atlanta area.
Food trucks fail for the same reason restaurants fail, lack of planning and finance. People have no idea how much hard work and how little pay there is. They tend to only look at the surface of a false glamorous profitable lifestyle. Most restaurants are extremely under financed and attract people with no financial or professional experience other than what they have learned from working at a restaurant. It’s the old adage “easier said than done”.
The fine folks of TakoBBQ in Fresno, California.
I would say that food trucks fails because owners don´t always realize that this is a business that requires a lot of hard work, long hours and that sometimes could be very disappointing in sales. They fail because they are not original or because they don´t serve something really unique. They fail because they want to become rich in one week and there is no thing like that. They fail for the lack of imagination, the lack of patience.
The fine folks of Angus Smoke Shop serving up quality BBQ in Texas.
So many reasons. Seems to be a new one around every corner. In no particular order I would say lack of appropriate start up capital, difficulty in staffing/maintaining staff, and crappy food are the main reasons.
OinknMoo BBQ in Dallas, Texas.
They don’t know where to start.
Many people have a good concept and a good truck but if you don’t know where to start it can easily hurt a trailer/truck financially the first few months. They end up in these trailer parks where the landlord could care less about you and you end up paying too much on rent because you don’t know what else to do.
Slab BBQ in Austin, Texas.
I think food trucks fail for one of two reasons, over saturation in the market or lack of promotion, I think its rarely for the reason that the food is insufficiently good. a lot of people think they can just open shop sell killer food and make bank, truth is anybody’s grandma could do that. to survive you need to know how to promote, that involves handing out menus , flyers , samples posting on bulletin boards, and Twitter and Facebook will not suffice.
Joe from The Doner Haus in Portland, Oregon.
1.) They don’t think like the customer–what does the customer want?
2.) Prices are too high for the amount of food/quality of food
3.) Making good food is only half the battle (maybe even less!).
4.) Marketing and promoting intelligently is essential. Some people who start food trucks only have experience in the kitchen and not in marketing, and that’s going to hurt them. They need to hire someone to help them or learn how to do it themselves.
5.) In most cases, you only have ONE chance to make a good impression on a diner. Always remember that and try to offer great food and customer service. Ask yourself, “why should someone eat here and not at a sit-down restaurant?”
6.) Don’t let the quality of your food slip or the portions shrink. People will notice and you will get hammered on Yelp.
Kelly O from San Diego Food Trucks.
The major problems that I see in the food truck community as a whole, is lack of a good product. The food needs to be good. Lots of food truck owners have little to no background in the restaurant industry or food service. This plays a part the failure rate. The product is not good enough.
Burn out. This may actually be the answer to your question. It is possible that burn out is the number one killer of food trucks. You work long hours and the work is very physical. Not many people are making a great living doing this work. There is lots of stress and hustle and then the reward at the end of the day isn’t so great. You give it a go for a few years, then you get burned out and throw in the towel.
Mechanical Failures. We run expensive businesses. The cost of gas, propane, storage, commercial kitchen rental, employee, not to mention food costs. There are a lot of expenses running a food truck. One expense often gone unnoticed or accounted for is maintenance on your vehicle. Trucks breaks down! Equipment breaks down! Lots of the food truck owners are buying old trucks, they put a new wrap on it and then hit the road. Then a transmission blows, the gas leaks, the radiator breaks, the list can go on and on. Before you know it you have spent thousands of additional dollars that you did not budget for. You are a new truck and have a hard time making ends meat regardless. The cost is too great, and you go under.
Jacob Bartlett of Mastiff Sausage Company out of San Diego, Calif.
Many food trucks fail simply because they do not promote themselves enough. Social media is a powerful tool that could bring in many customers. If the locations that they often a located are not packed with people, then making a sufficient amount of money may be a challenge. Trucks need to promote themselves and tell people, “Hey, we’re over here! Come find us!” By not saying anything, many people may not even know that your truck exists!
Brendan Craig of Find My Food Truck
There are many reason why trucks go out of business but this is what I think are some of the top reasons.
1. No where to park
2. Truck issues
3. Customers don’t like the food
Melissa Cicero of Melissa’s Chicken and Waffles serving the lucky residents of Orlando, Florida.
I haven’t seen many fail in the Tulsa area. I do know what it takes to succeed is constant attention to events, consistently building a base and replenishing it, and on a very simple level, quick transaction times. Not hitting on any and all of those is unredeemable.
Mike Bausch from Andolini’s Pizzeria Mobile Food Truck in Tulsa, Oklahoma.
I believe most food cart failures are the likely result of inadequate financial planning. A cash cushion, a 2nd job or a working spouse can be necessary for most cart owners to pay personal bills and expenses during those lean months. In addition, inconsistent business hours can lead to disaster for a food cart. The long work days, harsh weather conditions and cost of staffing can quickly wear on a cart owner and affect open hours. If customers determine a cart “is never open”, they will stop coming.
Nancy Petersen of Southern Belles Food Cart based in Portland, Oregon.
Why most food trucks fail:
- Most food trucks within 1-3 years fail due to:
- Lack of planning,
- Not understanding how seasons affect business,
- Poor concepts (lack of research),
- Mismanagement of finances & taxes
- Realization of exactly how difficult this business is
Sameer Siddiqui of Rickshaw Stop based out of San Antonio, Texas.
1. The process we have to go through with the Health Dept and it’s inconsistencies hinders our abilities to focus elsewhere.
2. Most food truck owners work 70hr+ work weeks. It’s very tiring and stressful.
3. Alot of new business owners don’t have the patience that building a consistent customer following takes.
Holle Davis of Lil’ Miss Short Cakes out of Murrieta, Calif.
In my opinion, one of the reasons that food trucks fail is that they don’t specialize. In trying to have something for everyone they serve too many options and when a customer has too many choices they just end up eating elsewhere. Also, the amount of prep time and the food waste that comes with a long menu ends up burning their candle at both ends!
Nate Beck owner of Natedogs serving the Twin Cities.
I believe food trucks fail because people feel that you don’t need any culinary experience to operate a truck. Also a lack of understanding of food cost management and time and labor management.
Michael of Street Food Philly based out of Philadelphia, Pennsylvania.
Poor management, which could lead to factors like bad location, or menu issues.
Anthony Salvagno from S’wich It Up in Albuquerque, New Mexico.
Based on my experience it would be.. The lack of a well thought out business plan. Many fail to plan ahead, understand their demographics, formulate a good marketing strategy, are many times under capitalized and their menu may be too high priced or not diverse enough to make enough profit to stay afloat.
The nice folks from OrlandosFoodTrucks.com.
There are many reasons why any particular business will fail and foodtrucks share all they same reasons. Not really sure why certain foodtrucks have failed, I have never asked any.
I think one pitfall would be spending too much to launch the concept and then never being able to keep up with the overhead. The money that people think they will make will be a lot less. And the operating costs will be a lot more… Tough business to make a profit with slim margins.
Chef Joe Youkhan owner of Chef Joe Youkhan’s Tasting Spoon, LLC
Assuming that the food and customer service are high quality, I think the biggest factor that could lead to a food truck failing is inconsistency. The most successful trucks and carts are the ones whose customers know exactly where they will be at all times.
That’s why the most successful halal cart is just known as “53rd and 6th.” That kind of consistency is impossible for New York food trucks these days unless you get a permit for a park or a private lot. There are so many food trucks on the street, it seems there are always 20 trucks who will stop at nothing to park today in the spot where you parked yesterday. Add the fact that the police have the power to shut you down at any moment, and there’s no way your customers can rely on you being on their corner at lunch time.
Ben Conniff from Luke’s Lobster serving New York City, Philadelphia, and Washington, D.C.
There’s no one reason that a Food Truck can fail – I’ve even seen a restaurant-operated truck charge too much, a small business that simply didn’t make good bahn mi (despite being the only thing they made), and multiple carts that just never got themselves “out there” for us to see. If there’s one singular thread in failure, however, I’d say it has to do with a lack of “Presence.” Whether it’s through Odd Locations; lack of Location Updating (on Twitter, Facebook, etc); a seemingly Boring or Uninspiring Theme/Menu; etc; the one unifying aspect of many retired trucks, from those that I can recall, ends with a lack of impression left in the customer mind, especially compared to the legions of other rolling businesses who have proven to excel in standing out.
Andrew Steifer of Reviews on Wheels
Most food trucks fail due to lack of critical business planning, setting real expectations and a saturated market. A strong social media presence is essential and creating another source of revenue such as catering is key to sustaining the business.
Juan Miron from MIHO Gastrotruck out of sunny San Diego, Calif.
The number one reason trucks fail is cost of operation. Food cost, labor cost are the hardest to control but the insurance, storage, maintenance Etc can also do damage to your bottom line very fast!
Build or Buy? I searched for months for a truck that fit my needs and decided to build. I did this for several reasons but the biggest was that I wanted the line built for speed. I wanted to be able to punch out food as fast as possible. I found a person to build my truck in Savage (a town located in Minnesota) because the one everyone uses here in the Twin Cities was more that double what I paid to have mine done. This is a very important step in the success of your truck. Large upfront costs on a build will result in a high monthly payment. If you sell your soul to the bank on a loan for the truck then you better be prepared for the winter months.
Supply and demand is the second reason trucks fail, do you have what the public wants or are you another corn dog cart at the state fair. Too many trucks concentrate on fried foods as an easy go to because they think everyone loves fried foods. The problem is that they take too long to cook and the quality of french fries will most likely not separate you from the next truck. We can push out over 100 sandwiches at max speed an hour @ $7 per while another truck is waiting 3-5 minutes (depending on what they are cooking) to feed a customer.
KISS Not the band silly, Keep It Simple Stupid! Too many trucks over complicate their menu trying to be everything to everybody. You don’t go to a steak house and order chow mein nor should you go to a food truck that serves burgers and find pasta on the menu along with french fries and frickles. Keep your menu to 6 or 7 items with a couple apps if you want but do not have a 30 item menu. If you want to rotate some of your specialties then fine but keep a couple staple items on at all times and rotate 2 or 3 in and out as you like AND be consistent with your products. Each item should look and taste the same every time, people like consistency as Ray Crock proved many years ago as his core philosophy.
Long cook times are reason number 4. The attraction of a food truck is that the customer can get high quality food fast without having to wait to be seated, wait to get their drinks, wait to take the order, wait to get your food, eat, wait for the tab and then pay tax and a 15% tip. Most of this process can be avoided by going to a food truck but when the truck is running 15-25 minute ticket times, people weill remember that bad experience and will not return.
Number 5 is as if not more important than number one, presentation. People eat with their eyes before they do with their mouth.
1. Does your truck look visually appealing from the outside? You don’t have to go spend $6,000 on a wrap like I did but show some pride in your brand and present it well on your truck, keep it clean should go without saying.
2. Do you have a wide open window? People like to look inside this new thing called a food truck, what are they doing to my food? they also love “The Show” Open kitchens are a very popular concept as people love to not only watch other people work but they love to watch food cook. I think all the food shows on TV will explain this theory. I have seen some trucks with very small windows and the line outside of the truck matches. The food truck is a very new thing to most of the public so they like the idea of being able to see what is happening in there. The idea of handing someone money and food appears from this tiny little window and you have no idea how or who made your food.
3. Are you and your staff clean, kind and eager to give your customers a good experience? I call this the flower in the window. You only get one chance to make a first impression so make sure you have your best person talking to the customers, this also doesn’t always mean that is you. 90% of the time I talk over Lisa’s shoulders to the customers as she is taking their orders, this is after I have prepared their food and waiting for it to finish cooking. People are amazed when they get their order when she is giving them their change back.
4. Lights, Lights, Lights… Too many trucks do not have exterior lighting. Not only do you look like a fish tank from a far but in most cases people can not see your menu which makes it very hard to order.
Marty Richie of Motley Crew’s Heavy Metal Grill out of Lakeville, Minnesota.