Are food truck parks profitable? What is the business model? How do they make money? How do you start a food truck park? Here is everything you need to know on. Food truck parks are designated places that food trucks are permitted by the law to park when they are not moving from place to place to sell their products.
It is illegal to park your food truck anywhere else, even in your own home hence you must look for a food truck park to park your food truck to sell your food and drinks and also when you retire for the day or when you are going for vacation or off duty.
Please note that when you negotiate with a food truck park owner to lease a space to park your food truck and vend, you must do due diligence to make sure the property has the amenities you need to operate legally. When it comes to food truck, permits and regulation vary across different areas so make sure to contact your local health department and transportation authority before entering into an arrangement with a property owner.
Are Food Truck Parks Profitable?
If you are considering owning a food truck park, there are a lot of questions and information to take into consideration. First of all, is owning a food truck park profitable? With the correct measures and a lot of hard work, the answer is that a food truck park can absolutely become a profitable investment.
But we will usually advise that before you make any decisions, consider the pros and cons of this business investment especially as it relates to the locations you intend opening the business.
Table of Content
- Factors That Determine the Profitability of a Food Truck Park
- What is the Business Model for Food Truck?
- How Food Truck Parks Make Money Through Rental
- How Much Do Food Truck Parks Charge for Rental?
- 2. Write Your Business Plan
- 3. Register Your Business
- 4. Secure the Needed License and Permits
- a. Zoning Permit
- b. Health Permit
- c. Environmental Permits
- 5. Lease and Construct the Food Truck Parks
- 6. Draw Up Business Agreement Document
- 7. Market and Advertise Your Food Truck Park
Factors That Determine the Profitability of a Food Truck Park
In as much as it is right to say food truck parks are profitable business venture, it is important to state that the profitability of the business is dependent on the business management style of the owner of the business, the number of food truck operators in the city where you have your food truck park, the number of food truck parks available in your city, the location your food truck is located, the additional amenities available for rent and of course your marketing and publicity approach of the business amongst other factors.
What is the Business Model for Food Truck?
If you are considering opening a food truck park, then one of the options that can guarantee you steady income is to adopt the subscription business model; it will enable you run the business with regular cash flow without getting trapped along the line.
Just ensure that you encourage members to subscribe annually, quarterly or monthly. In the United States and in most countries, gyms and park offers their members pass sold as a recurring monthly service fee.1915
How Food Truck Parks Make Money Through Rental
In order to make money from your food truck park, you must welcome food truck owners to park in your park and pay for the space and also in some cases for some of the amenities available, and it is usually within a certain period as agreed by both parties.
This is why food truck parking rental agreements come in handy and they are usually drafted to meet different purpose. For example, you may find a food truck park for rent with an established food truck lot that charges a set fee based on the day or the month.
So also, you may negotiate a custom arrangement with a specific property owner who is looking for extra income or wants a food truck to attract extra traffic for an existing brick and mortar business. Farmers markets and weekly festivals lease space to food truck operators as well, using a set daily price or asking for a percentage of daily sales.
Food truck park rental rates. A food truck park, or pod, is a dedicated space such as a parking lot that hosts a community of food trucks and carts, attracts customers looking for a critical mass of food options and provides an area with eating amenities such as tables, tents and bathrooms.
How Much Do Food Truck Parks Charge for Rental?
Rental rates for a food truck park are typically about $500 to $1,000 per month and you can make the most of your investment by vending as often as possible. Many food truck pods offer space on a daily basis as well, but you’ll pay more per day if you reserve dates individually than if you commit to a block of time.
Farmers markets and festivals. These events typically charge either daily fees or percentages of sales. Seattle’s Fremont Sunday Market charges $75 per day for food truck vending. Other markets often divide their lots into spaces sized for canopy tents and they charge food trucks for double stall spaces because the vehicles are twice the size of market canopies.
Alternately, a farmers market may charge food truck vendors a percentage of daily sales, usually in the 10 percent range. Sometimes you can get away with paying nothing at all for a food truck space, especially at smaller events where organizers want to enlist food trucks to help draw a crowd.
This is especially true at venues such as elementary school carnivals. In fact, you may even be able to convince event organizers to pay you to vend by asking for a minimum sales guarantee, which requires them to pay you the difference if you don’t earn a base amount over the course of the day.
How to Start a Food Truck Park Business in 7 Steps
Starting a food truck park business is like starting a rental business, but you will be renting parking lots/spaces for food trucks. Now let us quickly consider some steps you would need to follow if you want to successfully start your own food truck parks business from the scratch;
Without mincing words, food truck parks won’t thrive in every place. As a matter of fact, if you live in a mega city with limited open spaces or a city that has very few food trucks, then you should reconsider your desire to start food truck park. It is advisable to first conduct your own feasibility studies to be sure that a business of this nature will succeed in such location.
Some factors that you need to look at while conducting your feasibility studies are the laws governing food truck parks, the various licenses and permits needed, your potential clientele base – the number of food truck operators in the city, startup capital and the required space and of course the cost of securing space for the food truck parks business.
In as much as operating a food truck park business can either be classified as a sole enterprise or a small business, it still requires a business plan to be able to effectively operate this type of business. Your business plan will help you map out strategies on how to generate capital to finance the business, your marketing strategy, how to manage the business, and your growth and expansion strategy.
You can also capture your business goal, vision and mission in your business plan. Having a simple business plan for this kind of business is not out of place and you can do it yourself with the help of business plan template.
3. Register Your Business
If you are convinced that you are going to make profits from your food truck park business, then the next thing to do after drafting your business plan is to visit the corporate affairs commission of your country to register your business.
The truth is that, the local authority in the area where you run your business might clamp- down on your business if they find that the business is not legally registered. So, ensure that you do all that is required to register your business before you open food truck park to your customers.
4. Secure the Needed License and Permits
You would need to apply for the needed license and permits and some of the important license and permits you would need are zoning permit, health permit, signage permit and environmental permits amongst others that are unique to the city where you intend opening your food truck parks.
a. Zoning Permit
Zoning laws don’t just vary by state, they vary by city and specific plot of land. In most areas, the use of land is governed by zoning regulations. For example, some parcels of land are specifically zoned for hospital or medical center use, and others are zoned for residential homes, retail centers or other purposes.
Before you can get a house on wheels on a parcel of land or park it somewhere, you need to review zoning ordinances and ensure that your structure is compliant. Zoning can be changed in some cases by contacting the local authoritative department with your request, but this process can be cumbersome in some areas. Keep in mind, however, that some zoning regulations are determined at the federal level.
b. Health Permit
You will need this permit of you plan to sell eatables and foods in your park for campers. A health permit is a permit to sell foods and beverages that are cooked or served to the public, and which must be regulated for public safety. Health permits are typically part of the domain of a county health department.
c. Environmental Permits
Certain environmental permits can cover a range of activities but address specific environmental media. For example, the Clean Air Act requires pre-construction and operating permits (New Source Review and Title V). The Clean Water Act authorizes permits for point source discharges into waters of the United States and the filling of jurisdictional wetlands.
5. Lease and Construct the Food Truck Parks
The most difficult part of starting a food truck park business is to secure a landed property that is big enough and also one that falls within the zonal arrangement for such business. If you are lucky to find one, the amount might not come cheap.
So, if you have your finance then you can work with realtors who are familiar with the city you intend starting your food truck park and they will help you with securing the most suitable landed property for your food truck park.
When it comes to constructing a food truck park, you should ensure that you put up facilities that will make it comfortable for food trucks to easily operate with the facility and some of the facility should include proper drainage channels, waste disposal, electricity, water supply, rest rooms and security installation.
6. Draw Up Business Agreement Document
The fact that you will be engaged in providing parking lots for food truck owners to conduct their business means that you must prepare a document that will protect you from legal actions that may arise when you lease or rent out your food truck park lots.
In as much as you would need insurance cover, it is still important to ensure that you talk to a lawyer to help you draft an agreement document between you and your clients and you must ensure that it is properly signed before carrying out offering your food truck park to any customer.
One thing about food truck park business is that you only require less effort to market your service especially if your food truck park is located in an area that is close to public facilities where people usually gather and a location with loads of food trucks.
Although, it is still important for you to create some form of advertisement to tell food truck owners about your food truck park, but it would pay you if you strategically locate your food truck park in a location that requires little or no publicity.
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