Anyone looking to start a food business has probably wondered: Should I open a restaurant vs food truck?
Many factors should be considered when answering that question, including financial factors and the desired scope of the operation. Below, we will explore the pros and cons of both restaurants and food trucks so that you can decide what factors resonate with you most and make an informed decision.
Restaurant:
Pros
Traditional Concept
Restaurants are the traditional approach when it comes to serving people food. Customers are used to choosing restaurants when it comes to going out to eat, and they may be more inclined to trust a restaurant to serve them a higher-quality meal.
Seasonal Protection
Unlike food trucks, a restaurant is more resistant to the changing seasons. Restaurants have protection from wind, rain, and snow, meaning that customers will choose a restaurant for a warm meal and shelter from cold weather (and hot weather too). That being said, restaurants are not immune to the changing seasons, but they might fare better than a food truck.
Design Freedom
A restaurant will allow you more freedom when it comes to the design of the restaurant itself and the menu. A restaurant will usually have more of a chance to be upscale than a food truck (in terms of ambiance). You can choose the decor of the facade and the dining room, and really tailor the customer experience to whatever you envision.
More Space
Restaurants inherently have more space than food trucks. This means more space in the kitchen allowing more freedom when it comes to the menu, plus more space for guests to sit and eat, or wait for takeout. Depending on your restaurant design, there may also be room for a bar, allowing for more potential profits between serving alcoholic drinks and seating guests at the counter.
Cons:
High Startup and Overhead Costs
Restaurants can cost a ton of money, especially if you are starting from the ground up. Unless you’re buying a building that was previously a restaurant that already had a kitchen, you’ll likely be shelling out a ton of money for a branded facade, dining room, and kitchen.
Labor-intensive
Restaurants are generally much more labor-intense than food trucks. Usually, restaurants need more staff on hand for taking orders, cleaning, and more. A food truck can get by with a handful of people (some food truck owners run their businesses entirely on their own!), whereas a restaurant may require dozens of staff to get through the week.
Thin Profit Margins
Restaurants have notoriously thin profit margins, and some restaurants only profit seasonally. For the relatively high initial investment, it will likely be years before you’re paid back and starting to take home a profit. Most restaurants have a profit margin of 3-5%, meaning that if you were to make $500,000 in sales a year to take home $15,000-$25,000 in profit, which is relatively low considering the energy and time it takes to run a restaurant.
More Cleaning and Maintenance
Restaurants require a lot more time than a food truck to clean, as there is the added dining room, bathrooms, larger kitchen (most likely), and outside lot. Not only will this create a need for more labor hours, but it also increases the cleaning supplies needed. On top of that, more space means more maintenance and upkeep, plus higher insurance costs.
Food truck:
Pros:
Super Agile
The primary draw of a food truck for me is the ability to adapt to changing customer interests. If the neighborhood your food truck is in goes downhill, you can move your food truck. If you’re tired of working every day you can attend events you choose. If parts of the menu aren’t working the way you anticipated then you can easily adapt. If your concept isn’t working altogether you can totally rebrand or even sell.
Unlike a restaurant which is locked in one place and takes a ton of effort and cash to rebrand- a food truck can change relatively easily.
Lower Overhead (usually)
Food trucks may have less overhead than a restaurants because they don’t need to lease a building space. This may depend on your city and how saturated the market is, but rental space for a food truck tends to be a few hundred to a few thousand dollars cheaper than a restaurant space. Plus, in a food truck, you won’t need to heat or cool a dining room. With that, your utilities will likely be less expensive as a smaller menu means fewer dishes, saving on water and electricity.
Schedule Flexibility
In my opinion, a food truck can get away with changing their schedule more than a restaurant can. Usually, food trucks are in pods and most customers go to the pod and then decide what to eat, so if a food truck is closed then it’s no big deal. On the other hand, if a customer drives to a restaurant just to find that it’s closed it would be more frustrating. I’m not recommending changing the hours of a food truck constantly, but it may offer you more flexibility and peace of mind, especially if you’re running the business alone or with minimal staff.
Cons:
Seasonal Demand
Food trucks can be highly seasonal, especially depending on where they are located. In my experience, most food trucks tend to be busiest in the spring and summer when customers are more excited to be out in the world. As soon as cold or rainy weather hits, customers opt for takeout or to eat in a warm dining room. While restaurants experience seasonal fluctuations too, they can be slightly more protected from seasonal changes.
If your food truck is in a destination location or attends events, this could increase the seasonal variability.
Increasingly Prevalent
Food trucks are becoming more and more common by the day, and it seems like in my area there is a new one popping up each week. While this can be good as customers get more used to ordering from food trucks and begin to trust them, it can also be a bad thing. For instance, as more food trucks pop up they become less novel, making the experience less special. Meanwhile, more food trucks mean the demand for spots to put them increases, potentially driving up rent costs. With that, since many food trucks can fit into a small space, there will be a lot more competition in that area when it comes to people deciding what to have for lunch and dinner.
High Initial Cost
While restaurants usually are more expensive, sometimes food trucks might end up being the more expensive option. If you’re choosing a restaurant location that doesn’t require a brand new dining room and kitchen, you may end up spending less on a bit of decor and the lease compared to a new or used food truck which can be tens or hundreds of thousands upfront. In the long run, a food truck might be less expensive as the overhead will likely be less, but the high initial cost might be a barrier to entry for most.
Less Space
Nine times out of ten a food truck will have less space than a restaurant, meaning you’ll be limited in the amount of product you can have on hand and the menu size. Often, because of refrigeration requirements, you may even need to rent out space in a commissary or commercial kitchen so that you have room to cool prepped food.
In my food truck, I have limited refrigeration space, so during the summer when demand is high I have to buy lettuce for salads daily (sometimes twice a day) because we are limited with what we can store.
Restaurant VS Food Truck – The Bottom Line:
Choosing between opening a restaurant and a food truck can be challenging. While making that decision, you should consider your vision for the food business, what you want your daily life to look like, the kind of space you’ll need, and other factors that apply to your business idea. For more advice on starting a food truck, check out my top tips here.
