Ok… if this is the case, then why are food trucks charging $18 for a burger and fries now?
It isn’t all zoning laws.
It isn’t all zoning laws.
> But the restaurant industry fights to limit food trucks. On average, food trucks must handle 45 separate regulatory procedures and spend $28,276 on associated fees.
Lets napkin-math this. If we assume a food truck has margins at the upper end of the fast-casual industry of 9%, then each $18 burger-and-fries nets 1.62 in profit.
$28,276 / 1.62 = 17,454 burgers-and-fries.
If you were open every day of the year and assume no seasonality, that means your first 49 orders every day go just to regulatory fees.
And that doesn't cover any of the other fees and expenses a food truck might have.
Those are brutal economics. I'm impressed it's only $18!
This looks crazy because it is incorrect. In your premise, that 9% profit margin includes the regulatory costs for a brick and mortar restaurant already. The only way your logic works out is if truck regulations are on average $30k more expensive than a regular building, which they almost certainly are not.
You can’t even begin to do the calculation without knowing the breakdown underlying the profit margin you cite.
2. burrito trucks sell their burritos at the market clearing price for a burrito, which is $18 because most of that burrito truck's competition is brick-and-mortar restaurants with expensive rent because of zoning laws.