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In an article published in Entrepreneur Magazine’s August 2011 print issue, Jason Daley discusses food trucks as potentially the next big franchise trend. This is what I’ve learned:
Sauca is a specialty food truck franchise that serves international cuisine like banh mi, butter chicken, and beef shawarma. Conceptualized by former investment banker Farhad Assari as a brand that will someday include restaurants, clothing, music, and packaged foods, it currently has four trucks in the D.C. area and won last year’s Great Emerging Franchise Challenge, a contest judged by some of the leading names in franchising.
BannaStrow’s Crepes & Coffee, a franchise company based in Miami with four franchise units, has begun offering a truck option to prospective franchisees. The main target of their future truck business is college campuses.
Established names like Taco Bell, Dairy Queen, Jack in the Box, and Subway use food trucks for special events and promotional purposes. Tasti D-Lite is outfitting 10 trucks for use by its franchisees across the country. And Gandolfo’s New York Delicatessen uses food trucks to gauge consumer interest in new markets.
Cousins (sub) franchisees — and siblings — Thomas and Cheryl Jones have taken things a step further by operating 2 Cousins food trucks in addition to a permanent franchise location in Franklin, Wisconsin.
What do I think of the likelihood that food trucks will emerge as the next big franchise trend? I’m a bit skeptical. In the past year or so, Vancouver has become quite the mecca for food trucks. The most successful ones are those that offer something so unique that food lovers feel they’ve made a special discovery. Most of them are run by passionate owner-operators who take great pride in the menus they’ve created using their own creativity and imagination.
One of the advantages of buying a franchise is the built-in customer base that comes with a well-known brand. But if a food concept already has a national reputation, can it still offer the novel experience and sense of discovery that food truck lovers are looking for? (I certainly hope I never see a Subway food truck.)
I also don’t understand why a prospective food truck entrepreneur would choose to pay a franchise fee and ongoing royalty fees to join a franchise in an industry where being an independent mom-and-pop operator is not a hindrance — in fact, it’s part of the appeal. What do franchisees get in exchange for the fees? Do franchisees really need ongoing training and support?
Also, I’m not sure if a food truck can still turn a decent profit if the owner has to deduct monthly (or weekly) royalty fees and advertising fees from their revenues. This will make operating the business a lot more expensive.
To be fair, the food from Sauca (the food truck franchise) looks amazingly delicious. I just have to be convinced that the food truck business works as a franchise concept in terms of dollars and cents.