Thinking of purchasing a food truck to capitalize on Vancouver’s new-found love for all things street food? Well, you might want to reconsider for the time being.
The city’s food truck industry is not as stable as people might assume, despite its growing popularity, according to a new study from Vancity Bank. Food truck permits have increased dramatically over the last five years, with 95 being issued in 2015, up from 13 in 2010, but that doesn’t mean it is easy to launch.
Cost structure, licensing, and regulations are all challenges many food trucks face when trying to establish themselves.
In 2014 alone, 17 food trucks started and failed in the same year, says Andrew Fielding, owner of the Kaboom Box and former president of the StreetFood Vancouver Society.
One of the major challenges facing the food truck industry is surprisingly high operating costs. Profit margins can be thin and things like propane, motor vehicle insurance, liability insurance, and permit fees are all expenses that can add up over the course of a month. Parking meter charges alone can amount to a monthly cost of $500 in downtown Vancouver.
Renting a commissary kitchen is compulsory for food trucks, and the report says that they are in short supply and are extremely expensive. It even says owning a food truck can be more expensive than a restaurant.
In fact, StreetFood Vancouver Society suggests there’s an 80% turnover of vendors among the City of Vancouver’s permit holders.
The unpredictability of the business can also be a hardship for people looking to get a piece of this growing industry. Considering tourism is seasonal, a lunch rush can be dependent on the weather, events are hit or miss, and vehicle mechanical failures are common, anything can happen and turning a profit might not be on the day’s menu.
The average profit of a food truck is $31,300, and nearly 30% of them are not considered profitable at all.
The report recommends that Vancouverites take action to help keep the food truck industry stay above water. Paying in cash, spreading the word on social media, and bringing a friend to your favourite truck are all little things that can be done to help out.