Investigative journalist and broadcaster John Stossel and ReasonTV, published a new story titled “The Fight Against Food Trucks” earlier this month. The goal of the report was to find out if food trucks really are “bad” for restaurants as some politicians have claimed.
Are food trucks just part of healthy competition or are they rouge businesses that aren’t playing by the rules? Stossel aims to find the answer to this question in the video below that runs approximately 5 and a half minutes. So far this report has received over 20,000 views on YouTube alone.
The Advantages of Food Trucks for Entrepreneurs
As many of our readers may already know, food trucks are a lower cost way to start a food business than a restaurant. Many restaurant ideas will take $500,000 – $750,000 to start. A food truck often requires less than $100,000 all-in and doesn’t have overhead like monthly rent payments.
One of the food trucks featured in this story is Cupcakes for Courage based out of Chicago. The owner of Cupcakes for Courage Laura Pekarik says her reasons for starting a mobile cupcake business were due to not needing to rent a restaurant space or hire a team of people in the beginning. “Everything was under my control to get my feet wet in the business,” explains Pekarik in the early days.
Another food truck owner featured is Joey Vanoni of Pizza di Joey out of Baltimore, Maryland. In the program, Vanoni shares that he got the idea to start a pizza truck when he couldn’t find a good job after serving in the military. Instead of giving up on financial success, Vanoni decided to take matters into his own hands by starting brick-oven pizza business.
Bottom line, food trucks level the playing field by giving almost anyone from any economic background to start a food businesses with the opportunity to grow into a thriving brand. But do mobile units create unfair advantages for people that already invested half a million dollars or more to own a restaurant?
Food Truck Regulations
As Stossel points out, the rules for food trucks vary significantly depending on the city you want to operate. Some cities restrict serving time periods to only two hours. Others do not allow a food truck vendor to park within a certain number of feet of a restaurant.
These regulations can make generating sales on a food truck much more difficult. As Pekarik from Cupcakes for Courage points out it can be difficult to find a legal location to park in her city. Many of Pekarik’s regular customers have had difficulty even getting the opportunity to purchase her cupcakes for this reason.
Joey Vanoni also shares how difficult regulations have made operating his business in Baltimore. In Baltimore you are not allowed to sell the same product within 300 feet of another restaurant. In Vanoni’s case, the product is pizza making it nearly impossible to vend in the downtown area of his city where pizza joints are plentiful.
These regulations make generating revenue more difficult and begs an interesting conversation about why rules would favor one type of business versus another type of business? According to the video, it all comes down to who is lobbying local politicians.
More established businesses like restaurants have more broader networks. They know who is who in local government. They know other business owners that have been operating in the same area for decades. They’ve also got more money to contribute to lobbying local government. In short, restauranteurs have a lot of the resources that scrappy food vendors do not.
Leveling The Playing Field.
So how do small businesses compete against better funded and well established entities? One of the organizations cited in the Stossel piece is The Institute for Justice (IJ), an organization that has been helping ensure fair mobile vending laws are being established across the United States. IJ helps mobile food vendors and other The Institute for Justice is a 501(c)(3) organization that helps a variety of people and businesses as described below on their website:
Since 1991, IJ has come to the aid of individuals who want to do the simple things every American has the right to do—including own property, start and grow a business, speak freely about commerce or politics, and provide their children with a good education—but can’t because they find the government in their way.
As recently as December, 20th, IJ played a pivotal role in getting an important lifting the 300-foot serving ban for food trucks in Baltimore. This means that in the near future food trucks will be able to serve their food within a 300 foot radius of other restaurants with similar menu items in Baltimore.
In conclusion, the great restaurant versus food truck debate will likely continue for years to come. One positive aspect of this debate that we’ve seen in recent years is that more restaurants are investing in food trucks and more food trucks are building their own restaurants. Our hope is that in the future both types of businesses will have a better understanding and appreciation for one another.