The food truck fad has had a significant impact on the food & beverage industry, creating a new approach to serving food and granting many the opportunity become small business owners. However, as popularity grows, food truck owners are starting to feel the pressure.
One of the main challenges encountered by food trucks nationwide is coming from backlash within the community.
With the harsh sentiment that pop-up businesses, such as food trucks, enjoy an unfair advantage and negatively impact trade, business owners with established reputations and a stake in the community are making their complaints heard.
The American Dream seems to be in question.
While city politicians like to stand behind that dream, they are also responsible for protecting local commerce, leading to ever-changing legislation, some of which helps food truck owners succeed and some of which dooms their business to failure. These regulatory changes are ongoing, from the Pacific to the Atlantic, potentially opening doors in Seattle while closing others in Texas.
For one former food truck vendor who plied his trade in the middle of the country, the continual changes proved to be too much. His 2014 experience that welcomed the new year with a mad rush of investment ended at Christmas with disaster and debt, a common story heard all across the country.
Eddie Lawrence, a former food truck owner, believed with every fiber of his being that Americans would rush to try his very British, unsalted version of fried Atlantic cod with a heaping pile of hand-cut fries.
His venue near the center of Bentonville, Arkansas seemed like a shoo-in. However, red flags flew early on when Bentonville’s mayor Bob McCaslin learned too late that Lawrence had received his business permit from City Planning. Summoned to City Hall, Lawrence tells us McCaslin was none too happy.
“He went on about how he wouldn’t have approved it and I wasn’t going to get renewed next year, neither.”
And sure enough, as the weeks progressed, the city dispensed regulatory updates that hindered business for Eddie and a half dozen other local vendors, a few of which were long-established in the close-knit community of businesses around Bentonville Square.
While legislative changes did make things more difficult, it may not have been the main cause of Eddie’s business failure, as well as that of almost every other Bentonville food truck.
Compared to local legislation, standard business regulations have a much greater impact on the entire concept of the pop-up business.
One problem Eddie remembers was an unexpected introduction into sales and employee taxation requirements. As new vendors came into the area, he found they were as much in the dark as he was, and made a point to give them a heads-up on the tax situation. In the end, he says his quarterly unemployment insurance
Beyond the government and the law, there seems to be another consistent factor causing these food trucks to end up out of business. Many of these small businesses are run by just a few who may not have much experience running a company.
In the end, the lack of know-how seems to be the nail in the coffin.
Currently, the cost of food trucks has plummeted as an increasing number of barely used trucks and trailers find their way into consignment lots. Eddie Lawrence was lucky, since he built out his own trailer. He reports a loss of about half of the build cost by the time he finally managed to sell it almost a year after closing, and counted himself lucky at that.