Over the last month, several high profile food trucks have closed their doors, including Food Traveler Truck, The Bacon Wagon, Zombie's Food Truck and The Wiener Man. Is it coincidence that these three trucks are all Fort Worth-based? Is the food truck market shrinking instead of growing? What is going on? All are questions I get every time I write a post about a truck closing.
To put things in context, since I have been blogging about food trucks, there have been approximately 85 gourmet trucks that have rolled, somewhere in the Metroplex. In the same time period, approximately 19 have closed their doors.
After watching the industry for the last 16 months, I am not sure that I have any better understanding of which specific trucks are going to fail at any given time. But there are some trends among the closed or soon-to-be-closed trucks, and they seem to revolve around the two most important resources for any business owner: time and money.
1. Time: a high number of the trucks closed right around their 1-year anniversary: City Street Grille, Crazy Sisters, The Wiener Man all went a few weeks past their year mark. The Bacon Wagon, just a few weeks short. One year is long enough to determine if the food truck lifestyle is a good fit for the owner. They have been through a brutal summer, and in the case of early 2012, a fairly mild but stressful winter. They have had 52 weeks of placing orders, standing on their feet, scouting locations and plenty of time to question their passion.
For those truck owners with families, like Zombie's owner Fred Hoang-Davis, it didn't take a full year to determine that owning a food truck took too much time away from family.
2. Money: Quite a few food truck owners get into a truck thinking it'll be quick money. Nothing could be further from the truth. In reality, for most truck owners, for the first year, the goal becomes to break even. For many, they do, but for some, the sinking into debit comes deeper. At some point, especially with those owners with families, the realization that they can get another type of job -- one that pays more and most likely has them working fewer hours -- has a strong allure.
Fort Worth vs. Dallas
People also ask if there is something with Fort Worth, since it seems that a disproportionate number of Fort Worth trucks have closed; that's 26 percent, compared to 8 percent of Dallas trucks. From the outside, it seems harder to operate a truck in Fort Worth than Dallas. The laws between the two cities are significantly different, both in types of trucks and how they can operate. Fort Worth is more lax in truck design, allowing trailers, over-sized trucks and trucks retro-fit by the owner to all operate freely. Dallas requirements are more stringent in terms of size, as well as requirements regarding the standards for the retro-fitting. Fort Worth does not require the trucks to operate out of a commercial commissary, but allows designation of commercial or private kitchens as a commissary. Dallas requires trucks to operate out of a commercial commissary, although rules changes last year loosened some of the restrictions on which commissaries can be used.
The most notable difference between Dallas and Fort Worth is the areas in which trucks can operate. With the exception of certain areas in the central business district, trucks are allowed to freely operate in Dallas, subject to an agreement between the property owner and the truck operator, along with a few code restrictions regarding being on paved ground, access to restrooms and other minor issues. Trucks can rotate through locations and have multiple trucks on location without additional permits. This is the primary reason Dallas has truck events almost every night of the week, especially when they are put together by the trucks, who don't charge other trucks to be there.
In Fort Worth, the food truck scene has built up around food truck parks, primarily because of restrictions concerning where and how many trucks can park at a given location. When a truck owner and business owner agree that the truck can park on the business property, the truck must apply for a Certificate of Occupancy from the city. The application must include a sketch of the parcel of land and only one truck can hold a Certificate of Occupancy for that parcel. The city does allow a variance to the Certificate of Occupancy processes, which is how the food truck parks operate. The owner must apply for this variance, and I am told the process is time consuming to complete. Many trucks prefer operating at the parks, as it takes a bit of the hardest part of operating a truck -- finding locations -- out of the equation. However, the trade-off is the amount of rent paid to the park owner and being subjected to the business decisions made by the park owner.
Fort Worth has lower start-up costs, which are significantly off-set by the limited locations in which to operate. Dallas trucks have more restrictions at start-up, but once they get permits in Dallas, they can get them in every other city in the Metroplex that allows trucks. This is not true for Fort Worth, where a small trailer, operating out of their home is most likely limited to doing bushiness in Fort Worth.
Even with all these restrictions on truck operations, in reality, the Dallas-Fort Worth food truck scene is thriving. Nationwide, 23 percent of restaurants will fail the first year. I don't have the numbers for a 12-month period in DFW, but in the 16 months that I have followed the industry, 21 percent of the DFW trucks have closed their doors. The percentage is higher in Fort Worth (26 percent) and lower in Dallas (9 percent).
More and more, trucks are now operating between both Dallas and Fort Worth, even trucks that were adamantly committed to one city or the other have recently been seen passing city limit signs in order to expand their customer base. With this mobility, the potential for growth increases, albeit tempered by the increase in costs of fuel and wear and tear on the trucks.
Despite the recent closings of high profile trucks, I do not see an end to the food truck scene in DFW. Like all new industries, the field does have some leveling off, while those with great product, passion and resources thrive, and others find other business opportunities.