What is the Food Truck Success Rate?

Low startup costs and the allure of high returns are an irresistible combo for entrepreneurs. No wonder the food truck business is booming, with an average annual growth rate of 9.9 percent since 2018. In 2023, the industry's market size is projected to be a whopping $1.5 billion.

People still have a strong appetite for the affordable and inventive creations that food trucks are famous for. But with so many great meals on wheels around, it can be hard to distinguish your truck from the competition. Factor in uncertain economic times, when consumers curb their spending on eating out, and suddenly estimating the odds of success can feel overwhelming.  While we don’t have a crystal ball to foretell the future, learning from past mistakes can be valuable. Having a good concept alone won’t do the job – it’s how you launch your business that can determine your food truck's success rate.  This article will discuss why many food trucks fail and identify winning strategies from a few leaders.

What is the average food truck success rate?

Opening any eating establishment is tricky, and there’s always a dark cloud looming in the distance: failure. While data on food trucks is sparse, restaurant industry statistics can provide a guide. Roughly 30 percent of restaurants fail in their first year, according to the National Restaurant Association.  But let’s look at things from a different perspective: 7 out of 10 new restaurants succeed. A variety of issues beyond your control can impact your food truck business – higher gas prices, inflation, and the overall shock of the post-pandemic economy. The key is to focus on the factors within your power. Having a solid plan in place and staying flexible will put your new food truck on the road to success.  

Of all the many benefits that food truck ownership offers over traditional restaurants (lower startup costs and overhead, to name a few), there are common pitfalls that can be easily avoided by planning ahead. It's essential to take a look at why so many fail.

Why do so many food trucks fail?

No clear business plan

Creating a solid business plan is the most important first step. Too many food truck entrepreneurs live by that old saying, “If you build it, they will come,” but that’s only part of the challenge. No doubt your killer fried chicken sandwich will satisfy customers, but you must also satisfy the needs of investors, banks, and marketers. Investors will want to know when they can cash out, banks need to determine your trustworthiness to approve loans, and marketers will require demographic info on a viable customer base.  Food trucks can appear wildly casual, as though the purple taro root donut was just invented that morning. But they are sophisticated endeavors like any other business, requiring funding and sales forecasts. 

A carefully thought-out business plan is not just about wowing others, either. It lays the groundwork for you, the owner. If there’s anything you can be sure of when launching a new business, it’s to expect the unexpected. A business plan will guide you through the chaotic startup process and keep you on track when life throws you curveballs.

Poor staff management

Do you know who’s awesome? Your staff. They’re the secret sauce to your success, bringing the heat day after day. They work tirelessly in cramped galley-style kitchens stocking supplies, taking orders, and likely handwashing everything because there’s no room for a dishwasher. Treating your staff well is just as important in a food truck environment as in a traditional setting. Hiring and retaining good workers comes down to three key things: wages, benefits, and a supportive work environment.

Providing competitive wages and benefits like health care and paid time off will attract hard workers and inspire loyalty. Remember, many laws and regulations for full-time employees also apply to seasonal ones. Every employee, whether full-time or temporary, represents your brand to the customer and will cost you if they quit. In fact, according to Cornell’s School of Hotel Administration, the cost of turning one hourly employee can be as high as $5,864.  

Just as important as paying a living wage is ensuring a supportive work environment and an excellent cultural fit. Food trucker workers skew younger and may use the opportunity as a stepping stone to a restaurant job or opening a truck of their own. Offering growth opportunities and professional development – like creating a new dish for the menu – will attract go-getters. Check out this course to help crack the code of staff management.

Lack of financing and capital

Many new food truck owners make the mistake of financing their startup with their own capital, tapping their savings, and maxing out personal credit cards. While food truck startup costs are significantly less than restaurants, it still requires a sizable amount, anywhere from $75,000 to $250,000. Savvy truck owners know how to harness the power of banks and investors. Riding the ups and downs of business ownership can be challenging without a strong cash position and outside funding. There’s a smorgasbord of enticing loan options available to small businesses. The trick is finding the right one for you. 

Like restaurants, food trucks feel the squeeze from post-pandemic supply chain issues, worker shortages, and inflation. Having enough funding helps you navigate unforeseen challenges.  Additionally, capital will allow your truck to pivot when consumer tastes change, roll out inventive new dishes or menus, and implement new marketing strategies that will help your business grow. You’ll also have a safety net to handle maintenance issues, from replacing broken equipment to changing blown-out tires.

Too much competition

It’s a feeding frenzy out there. Mobile kitchens are now a dining mainstay of most American cities, popping up outside office buildings, schools, museums, festivals, public parks, and more. More than 36,000 food trucks are now operating in the U.S., up 12.5% since 2021. In short, the scene is saturated, which makes it essential to create a unique customer experience. 

Market research is your friend. This is the process of identifying your target customer, how to entice them with exciting food, and finding the perfect locations for your truck. For instance, there are cities where it’s easier and more profitable to operate a food truck (Portland, Los Angeles, and Nashville are in the top ten according to Food Truck Nation), and some neighborhoods hold more promise than others. Say your truck specializes in loaded hot dogs. What if another hot dog truck parks next to you, or worse, your moment passes, and everyone moves on to cheesy tater tots? By conducting market research, you’ll maintain a competitive edge by understanding what your customers want and where they live.

Little marketing investment

Viral marketing on TikTok and Instagram can often “make” a food truck, a restaurant, or a recipe. But realistically, chances are slim that your food truck will go viral on its own. Investing in marketing is crucial. Creating a successful campaign is not an exact science, but hiring a professional and researching ways to connect with your customers can directly translate into sales growth.

Food trucks have a lock on one of the most coveted demographics to marketers: millennials. According to an IBISWorld Inc. report, 43% of food truck customers are 25 to 44-year-olds, and an additional 20% are under 25. While the impact of social media on this demographic is undeniable, there are many other ways to advertise.  Food trucks are well-poised to take advantage of location-based advertising. This entails connecting with smartphone users in specific geographic areas through mobile apps. Additionally, email marketing is still relevant as a cost-effective way to reach customers. Participating in food truck festivals or partnering with a bar to provide food are also popular promotional ideas.

Your marketing strategy should detail your branding and promotional decisions but never be set in stone. Your plans must evolve to capitalize on consumer trends, which is why successful food trucks consider marketing an ongoing cost.

Failing to adapt

Running a successful food truck requires flexibility. The ability to adapt to changing tastes and trends should be baked into the DNA of every food truck owner. Not only is the location changing daily, but often, the menu does too. This increasingly applies to marketing.  More than any other industry, food truck customers rely on social media to find their favorite meals. It’s hard to predict the next It platform. Still, the most successful food truck owners share a characteristic: they are early adopters, jumping on the latest trends in food, restaurant technology, and marketing.

Successful Food Truck Examples 

The sky’s the limit when it comes to food truck ideas. Here are examples of three successful food trucks to get you inspired.   

Bon Me

The husband-and-wife owners of this Boston favorite laid the groundwork early. Before their truck hit the road in 2011, they had a business plan in place and had tested their unique version of the Vietnamese báhn mì sandwich on 500 people. Once established, they responded to changing tastes by onboarding vegan, vegetarian, and gluten-free options.  They now have three thriving food trucks and eight brick-and-mortar locations. Excellent staff management has been a key to their success; they inspire employee loyalty through robust benefits, including 401(k) plans, regular raises, flexible schedules, and free food.

The Waffle Bus

In Houston, you can’t throw a rock without hitting a taco truck, and Phi Nguyen knew there was too much competition for another Mexican option. When developing the concept for his food truck, he landed on a unique rendition of a Southern classic: chicken and waffle sandwiches using waffles as the bread.  Before opening in 2021, he conducted research by taste-testing chicken and waffles across the country and then trying hundreds of methods to perfect his recipe. Even after success hit, he continued to innovate and tweak his menu, ultimately inventing something unique: the Fryder, a slider with waffle fries as the bun.

Zoagies

Owner Ezell Barnes’ had been making his signature hoagies for ten years when he changed the recipe based on customer feedback. He adapted his recipe to cater to the tastes of his target market, and the “zoagie” was born. The business eventually grew from humble beginnings in Barnes’ New Jersey backyard, and now people follow the truck all over the East Coast for his unique sandwich.

You’ll find a diverse bunch of people behind the wheel of food trucks from different walks of life. There are famous restaurant chefs, home cooks, young business majors, and people who make it up as they go. It’s one of the few areas in the food industry where you can run with an exciting concept and make huge profits off a single recipe. But when it comes to the business side, it’s best not to fly by the seat of your pants. Making smart decisions early on will set you up for success.

You got this.

Success in the food truck industry isn’t easy, but it is absolutely possible with the right tools and information. 

There is no one right way to run a restaurant. Plan ahead, hire the right people, and adapt where necessary, and you’ll be set up for success.