Cat & Joe's Pig Rig

In: Business and Management

Submitted By filliph
Words 3439
Pages 14
1. List and briefly describe the advantages and disadvantages inherent to the food truck business model and as compared to traditional restaurants.

Food trucks have exploded into mainstream American cuisine. Once thought of as a cheap meal available at odd times of the night, street food has become a vehicle for chefs on the rise to make their mark on the food industry. Operating a food truck may seem like an easy task, but it can turn out to be a tremendous undertaking and risky financial venture. Operators must be prepared to lose money, to manage fixed costs, and to do constant forecasting in order to determine how much food to prepare. The advantages and disadvantages are numerous, but we will proceed to name a few.
Food trucks carry the explicit advantage of lower investment and operational costs, thereby reducing overhead and other related costs. Instead of renting or purchasing a building, a potential operator could purchase a truck, register it appropriately, and have it outfitted to cater to a mobile kitchen. The immediate out-of-pocket costs involve: purchasing the vehicle with cash or using a loan, which creditworthy buyers can secure at a rate comparable to that of a traditional mortgage, vehicle registration costs in the state of operation, and a CDL or required driver’s license for operating the vehicle. A food truck operator is also able to avoid payroll taxes since he or she is not drawing a salary from the business. According to Legion Food Trucks Inc., food trucks are easier to maintain and operate by virtue of their size. Perhaps most importantly, mobile food trucks give the advantage of location. They are not stationary like traditional brick and mortars, therefore the chef is able to take advantage of local events with minimal effort. Like Cat and Joe, food truck operators have the luxury of attending out of sector events while preserving…...

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