The Profit

Food trucks cooking up restaurant empires

Sarah Chandler, Special to

To general manager Elizabeth Petrosian of Portland, Oregon's Burrasca, launching the rustic Tuscan concept as a food truck — or cart, as it's called in Portland — was the critical first step towards realizing that she and chef Paolo Calamai's ultimate business plan: a sit-down restaurant.

Hollywood has even learned to invert "the star chef" story.

In the breakout indie hit "Chef," starring Jon Favreau, the fed-up chef he plays turns renegade food truck entrepreneur. As he plies Cuban sandwiches out of a battered truck, it proves to be the spiritual antidote to the merciless, critic-driven L.A. restaurant scene. In the film, art imitates life: as food trucks have grown over the past decade from indie outliers to a mainstream phenomenon, they have also become the territory of pedigreed chefs.

But what makes a restaurant concept stick not only as a truck, cart or mobile pop-up, but also for the long haul?

Source: Eric Shin

Take Ludo Lefebvre, a Michelin-rated chef from France who took Los Angeles by storm with his fried chicken Ludo Truck.

"The food truck is a great test market for a restaurant concept," said Lefebvre. "Not unlike a pop-up, it give you the flexibility to try things without a huge financial investment that a traditional bricks-and-mortar would require."

Ross Resnick, the founder of Roaming Hunger, a Los Angeles-based company that tracks and promotes food trucks, said that unlike traditional restaurants, where the chef has limited interaction with diners, food trucks offer a direct connection to the chef-proprietor. "As a business owner you can really get in front of people," he said.

Social media sites such as Twitter, Resnick said, enable food trucks to break away from location and become better known for their brand, and that has attracted a new breed of entrepreneurs.

The truck that started it all

If you want to learn from the best food truck success story of all, food truck entrepreneurs who have made the jump to restaurants — and use social media to their advantage — say to study Roy Choi, founder of Kogi Barbecue.

"Roy Choi inspired me to start my food truck," said Eric Silverstein, founder of Austin, Texas-based The Peached Tortilla. "I was watching videos of Kogi on YouTube in 2009 and my mind was blown. There was something so raw and passionate about what he was doing. In a food truck, you are cooking three feet from your customers next to a sidewalk. For some reason that really appealed to me," Silverstein said.

David Schillace, co-founder and CEO of New York City-based Mexicue, said he was visiting a friend in Los Angeles in 2009 and was taken to the Kogi truck in Los Angeles for lunch. "When we arrived, they had a line down the block and a D.J. playing outside the truck. At that moment I thought to myself, this wouldn't be too expensive to start, there is nothing like this in New York, and with the density and visibility in NYC, this could be a great way to launch a brand! The Kogi truck definitely started the modern-day food truck revolution of branded trucks selling interesting food where people could find their locations via social media."

Agonizing over what you might think would be the right menu choice may be less successful than trying something different.

"My French background had nothing to do with the ultimate result of the menu on LudoTruck," said Lefebvre. "You don't really see any fried chicken concepts in France. The truck was a great way to remove some of the expectations and do something different, but still making the fried chicken based on the way I would prepare any chicken in typical French cuisine."

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Mexicue's Schillace said the truck can given an entrepreneur the flexibility to test out different aspects of a concept in different markets, without the cost of building a bricks-and-mortar. He said you need to be as adventurous as your clientele, and then make sure it's also a concept that can play in Peoria.

"There is a strong population of adventurous eating millennial consumers in New York City. Our food is a hybrid of two accessible foods (Mexican and BBQ), yet the fusion makes it unique enough to hit our target demographic and cater to their tastes. I think that one of the best things about our concept is the uniqueness of the fusion, which plays well in urban markets, and the accessibility of both Mexican and BBQ foods which will resonate in more suburban areas."

Knowing when the time is right

Many food truck entrepreneurs say they started with the intention of ultimately building a restaurant business.

"We started the truck with the intention of moving into bricks-and-mortar restaurants," Schillace said. "The customer feedback and lines down the block every day gave us the credibility to raise money as first-time restaurant entrepreneurs."

Lefebvre said he isn't sure there is a defined "tipping point" when a food truck entrepreneur can know a restaurant will succeed, but "what is important is that you have reached as many people in the area as you can where you would want to open a bricks-and-mortar and have consistent demand and positive feedback." He said, "It definitely should not be quick. You have the truck to 'master' a concept and build a loyal clientele. Being patient will pay off in the long run."

"I definitely don't think food trucks should be your end game," the Peached Tortilla's Silverstein said. "You should want to do something beyond food trucks if you open a food truck."

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But Schillace cautioned that he had an advantage that few would-be food truck entrepreneurs in major American cities would still have today: "We hit our timing perfectly as we were the second food truck to launch in Manhattan. So we rode a tremendous wave of press. Today, there are so many trucks that I'm not sure they are receiving the attention that we got when we first started.

"The best and worst decision was the truck to be honest. I went two years without taking home a penny because trucks just don't make very much money; however it allowed us the opportunity to build a brand and to gain enough visibility and credibility to take on investment and to get to where we are now- building a multi-unit restaurant concept."

You have the truck to 'master' a concept and build a loyal clientele. Being patient will pay off in the long run.
Ludo Lefebvre
chef and restaurant impresario
Ludo Lefebvre
Source: Nate Hoffman

Silverstein said it's critical to realize that the "low overhead" argument often used in selling entrepreneurs on the food truck model is a bit of a myth.

While it's a wise way to test the market with lower start-up costs, the two biggest costs in a restaurant business, food and labor, are still there. And they are still the same percentage of sales. "You go the food-truck route because a food truck might cost $50,000-75,000 to start, compared to a restaurant which could cost half a million," he said. "If you have $60,000 in the bank and the bricks-and-mortar is going to cost you $500,000, it's too early."

There's one financial footnote that shouldn't be overlooked by entrepreneurs with food-on-wheels business ideas: how to finance the truck itself.

"The best financial decision I made was purchasing my food trucks," Silverstein said. "The worst financial decision was leasing a food truck for over two years. Leasing made sense early on, but it didn't after a year," he said.

A lease is a form of rent and after a while, you may have paid so much in rent that you could have purchased the truck. "The good thing about leasing is usually the lessor will cover the repairs on the truck. But, again, if it is a pricey lease, after three years you probably could have bought a truck," Silverstein said.