Some tips on getting a foot in the door of the trailer business
The mobile food trailer, cart, or truck is the new wave of Austin eatery, and it's taking off like gangbusters, attracting national TV, radio, and print media. Austin had 648 mobile food businesses in 2006, but we're projected to have 1,620 by the end of 2011. Many see it as the inexpensive alternative to opening a brick-and-mortar restaurant: While a mobile operation can be opened on a shoestring for $20,000 to $30,000 (the cost of a new car), a full-fledged restaurant can start at 10 times that amount and quickly rocket way, way up. While a mobile vendor might have zero to very few additional employees, even a small cafe requires at least a dozen. With dependent staff and lots of money invested come responsibility, worries, and headache, while the mobile vendor can start up with his psyche relatively unscathed.
What's happening here in Austin reflects a national trend. New York City has a permit waiting list 10,000 people long and a new Green Cart program that shortens the wait if a licensee agrees to sell only fresh fruits and veggies and target neighborhoods with a need. With mobile food vendor permits capped by the city's health department at 4,000, there's a huge and lucrative black market for selling or leasing existing permits, and relatively violent cart wars have broken out over competition for spots. New York has its wildly popular annual Vendy Awards, which give awards to the best food vendors in the city, determined by diners' votes and a panel of expert chef judges. Los Angeles just held its first-ever L.A. Street Food Fest and had 15,000 people turn out. San Francisco, long the habitat of burrito and taco trucks, has entered the fray with more than 50 new mobile food trucks Twittering their nomadic locations to the faithful. Portland, Ore., now has 600-plus vendors, and the list goes on.
To jump in seamlessly, you need a creative and original idea, along with food as good as, or hopefully much better than, that already being prepared in the area. It helps if your product is unique, but at the very least, it had better be good and worth the price. It's a plus if there are hordes of drunken, starving, cash-laden pedestrians staggering by your operation every night, but if what you produce is appetizing enough, the hordes will go to considerable trouble to seek you out, aided by bloggers and food sites like Chowhound.com and TacoJournalism.com.
To get your operation started, you need to start a long series of steps, the first of which is gathering the required money. Many of the next steps are outlined in the Austin/Travis County Health and Human Services Department's packet for a permit (see "Links for Hitching Up," below). For this, you'll need deep pockets (yours or an investor's) or a pile of empty credit cards and, with either, a business plan to go along with that great idea and your talent. You need to know your start-up costs, and when you start ciphering those, they can add up quickly.
If you want to roam the streets and tweet changing locations, a used catering truck can go for as little as $10,000, while a new one can cost $75,000 or more. (Under a new proposal due to be enacted in October if it is approved, your itinerary must be on file with the health department; more on that toward the end of this story.) If it's a trailer you're after, a new 16-footer can be had for $16,000 or twice as much. You can always build one yourself on a trailer frame or retrofit an older trailer such as an Airstream, Shasta, Airfloat, or Spartan. A Web search will turn up dozens of used truck, trailer, and food-cart dealers. The requirements are simple: cleanable surfaces that can be sanitized, triple sink and hand sink, refrigeration that holds foods at temperatures below 41 degrees, equipment to hold hot foods at 135 degrees or higher, pressurized water system with a hot water heater, gray water capacity that exceeds freshwater by 15%, and thermometers to monitor temperatures of foods. Basically it must operate within the same guidelines as a restaurant kitchen, and once a year it must make a sacred pilgrimage to the headquarters of the health department to be inspected and permitted (so for a brief time annually it must possess the capacity to roll through traffic).
Whether you're restricted (selling prepackaged products) or unrestricted (producing food in the trailer or truck), you're required to be aligned with a commissary kitchen. The commissary kitchen must be inspected on a regular basis, have a certified potable drinking water source for filling the trailer's freshwater supply, and have a grease trap so that wastewater (aka gray water) from the trailer can be disposed of properly and not pollute the city's water system. The commissary can be used for cleaning the vending unit, storing raw materials, food preparation, etc. The guidelines enforce this requirement by stipulating that the vendor have a notarized and signed affidavit from the commissary kitchen, and the new proposed regulations require the vendor to keep a monthly log of visits to the commissary. There are a very limited number of commissary kitchens available in town (see "Commissary Kitchens", below); these can be expensive on an ongoing basis, and you may not have much of a choice on when you get to use the facilities (many are open 24 hours). What many vendors do to satisfy the requirement is to align themselves with an existing restaurant.
The cost of your location is rapidly becoming a big concern; currently a spot can cost anywhere from nothing (for a sweetheart deal with friends or family) to $1,500 a month, the highest rate we have heard of so far. But don't expect that rent ceiling to last, as space becomes restricted and more vendors hit the scene. Location cost is one of the main motivators in causing mobile vendors to band together to establish more and more "trailer park eateries," where vendors of complementary food items group together to share a location and thus share their common overhead costs: trash removal, electric service, rent, set-up and cleaning of common eating areas, restroom facilities, etc. Generally the concept works much like a "restaurant row," where a larger collection of dining options in one place lures more total diners to the area. These arrangements can be transitory, especially when one vendor gets more popular than the others and starts hogging vital resources, such as limited parking.
Obviously you want a location with good traffic flow, foot traffic if at all possible (since the need for parking is reduced if you can lure pedestrian diners right off the sidewalk). With city sidewalk or easement locations you usher in a whole new set of problematic restrictions, having to deal with the city's Right of Way Management Approval Network ordinances (call 974-7180 for specifics). You want good visibility from the road for car-borne diners and a spot for them to park their cars, whether they're stopping in to grab a to-go order or staying there to dine on-site. You desperately want some shade in the summertime, or you're limited to serving only at night, serving to-go only, or spending the bucks to erect a sun cover or shade of some sort. Finally, there are some restrictions on location that must be addressed. Carts have to be in properly zoned areas: commercial or industrial, excluding neighborhood office, limited office, and general office. They can't be located within 50 feet of a building that contains both commercial and residential uses and can't be within 20 feet of a restaurant located in a building. There are also special neighborhoods with their own special vendor rules; for a map, see www.cityofaustin.org/planning/neighborhood/downloads/mobile_food_faq.pdf.
If there isn't already an existing power source on your site, you can opt for having a power drop and a fuse box installed, which, according to area electricians, will cost anywhere between $3,000 and $5,000, depending on the distance to the power pole. The alternative is a noisy and smelly power generator, which will run you $500 to $4,000; requires the cost, delivery, and safe storage of fuel (and the memory to keep the generator gas tank full); and necessitates the money or mechanical knowledge to keep the machine maintained.
Minimum wage is currently $7.25 per hour, but most vendors pay a higher wage than that, and the employees have the opportunity to get a few tips as well. Between Medicare, Social Security, and federal and state unemployment taxes, plan on adding another 16.5% or so to your labor costs. If you want to provide a hospitalization policy, start at $300 a month and go up; for workers' compensation, figure about $200 a month per employee.
Most folks think the mobile vendor restroom requirement is aimed at the diner, but, according to Austin/Travis County Health and Human Services' Sue Simons, it's actually for the vendor and his workers, though many vendors will include their diners and provide facilities for the comfort of the customer. Some vendors provide on-site flushable toilets; others have portable toilets and portable hand-washing stations. Under the proposed new regulations, vendors must provide either written proof that a neighboring business within 50 feet allows vendor workers to use their flushable toilets or a signed contract from a portable toilet supplier. Every trailer must have a hand-wash sink inside for employees' use. Put in a flushable restroom, and you're looking at $20,000 to $30,000; a portable toilet will run you about $100 a month, and a portable hand-wash station about the same.
If you want a ground cover to prevent mud, think pea gravel or decomposed granite as the cheapest choices. One cubic yard will cover 324 square feet at a depth of 1 inch, so do the math. Granite, pea gravel, or shredded hardwood mulch are roughly $32 a yard, while cedar mulch is around $20, plus delivery at about $75 a load and labor to spread it. Picnic table kits are roughly $100 each, plus you'll need long chains and locks to secure them overnight; for commercial quality picnic tables that can be permanently anchored to the ground, start at $400 to $500 each and go up. Two-tier, wind-resistant 10-foot umbrellas start at about $125 each, and you'd need some place to securely store them overnight. A permanent metal shed roof on posts would be the ideal coverage option; it would protect diners during rain and could be inexpensively enclosed in the winter. Fans in the summer and rental or purchase of propane space heaters in the winter (plus the cost of the propane, which isn't cheap) are necessities. Diners will suffer for great food, but they won't suffer that much.
You're going to need money for smallwares and tools and money to buy supplies to get started. By all rights, you should have enough operating capital in reserve to squeak by financially for six months or so with lousy business (consultants suggest a one-year reserve). Advertising is usually done guerrilla-style, using fliers, food blogs, and the king of Austin mobile food vending sites: AustinFoodCarts.com.
Finally, you need permits – an ever-growing pile of permits. A Travis County DBA (Doing Business As) will run you at least $13, a state sales and use tax permit is free, the newly proposed mobile vendor application fee will be $125 (a fee "to process the application," but it's actually to fund three new inspectors, according to Simons), a food manager's certification permit is $110 (plus you must take and pass the test), the Austin health department fee is $210 ($90 for a restricted permit, or $60 in unincorporated Travis County), and the new proposed Fire Department inspection fee is $125. All together, that's $585 that has to be paid up front to make you legit.
All of these rules are supposed to be based on maintaining public safety, but health department statistics that were presented at City Council Public Health and Human Services Committee meetings revealed that since 2006, only five of 699 public complaints regarding suspected food-borne illness implicated mobile food vendors. That flies in the face of the complaints by Tom Ramsey, owner of Snappy Snacks, a large Pflugerville-based mobile food vending company that leases out 70 food trucks to independent operators who cruise construction sites, office buildings, and the like. He developed a list of 42 health, safety, and environmental concerns he wanted the council to address to crack down on what he views as his new competition – this growing class of creative mobile food vendors. Of those, the Public Health and Human Services Committee considered 10, whittled those down to seven, and has finally recommended six new requirements for final vote by the council: a monthly log of commissary use, notarized certification of commissary kitchen, proof of Texas sales and use tax permit, a posted itinerary for food trucks, written permission to use restrooms at work site, and a Fire Department inspection report. According to Simons, proof of product liability insurance (the seventh recommendation) was supported by the task force but ultimately rejected. Marti Bier, Council Member Randi Shade's policy aide, says: "The proposals will be on the council docket in late September and can take effect 10 days after they pass. ... They are pretty much a done deal." Robert Garza, chief of staff for Council Member Mike Martinez – who's been intimately involved with the mobile vendor issue – said, "Ultimately, this is not a comprehensive solution, and we'll be addressing the issue again in the future."
What started as a vendetta against fly-by-night illegal vendors cutting into Ramsey's sales at construction sites has grown into a fairly big deal that has encompassed the entire galaxy of food vendors, including those selling food products at area farmers' markets, and made Ramsey a whole new set of enemies. It's shaken some current vendors but doesn't seem to have scared off many newbies; new vendor chatter around town is hot and heavy, and my guess is that the projected mobile vendor numbers for 2011 will be soundly smashed. The health department will go from one inspector to three, and the Fire Department will add one inspector for vendors if the measures pass as expected. The big winners: the casual diners of Austin, who are offered an inexpensive and expanding cornucopia of creative eats, and the vendors, who are allowed to start small and dream big.
With more than 1,200 vendors in town and 1,650 estimated for this time next year, these few commissary kitchens are hardly enough to service that number. Even with most mobile vendors aligning with existing restaurants, the number of commissary-capable kitchens in town seems woefully inadequate to fulfill the new proposal.
The Kitchen Space: 692-9896, Adrienne, www.thekitchenspace.com
Just Add Chef: 431-1157, Herb Levy, www.justaddchef.com
2 Dine 4 Fine Catering (rents out some space): 467-6600, Stephen Shallcross, www.2dine4.com/index2.php
McGovern's Organics GF/CF Delights (gluten-free): 983-3197
Manor Downs Kitchen: 632-3323, Miles Compton
There is an ongoing discussion/contact group on local commissary kitchens at Better Bites of Austin (aka Small Bites of Austin), where vendors and kitchens can make contact: www.smallbitesaustin.wordpress.com/007/05/02/commercial-kitchen-space.
Links for Hitching Up
Austin/Travis County Health and Human Services regulations page:
Application for mobile food vendor permit: www.austintexas.gov/health/downloads/CH-TC_304_MFVPacket_10-07-08.pdf
"Starting a Food Business" – Austin/Travis County Health and Human Services Department: www.cityofaustin.org/sbdp/downloads/startfoodbus.pdf
"Tasty Tips" – Austin Small Business Development Program: www.cityofaustin.org/sbdp/downloads/2009_tastytips2.pdf
"Ice Cream, Hot Dogs, or Vegetables: Starting a Mobile Food Vendor Business" – Callaway Aimone's primer for Texas C-BAR: www.texascbar.org/content/legal_library/economic/downloads/mobil_food_vendor.pdf