Cat & Joe's Pig Rig
3455 words 14 pages1. 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 …show more content…
New York City—a metropolis littered with food trucks on nearly every block in Manhattan—currently regulates them in a manner similar to taxi medallions. A maximum number of permits are issued each year, which inadvertently creates a black market. Food truck permits, then, can be very expensive depending on the region of operation.
Disadvantages also include the shortened operational season, as exhibited by Cat and Joe’s 180-day operational cycle. Their mobility may also serve as an impediment, as they have no set location where customers would always be able to find them. There may also be issues with inventory and storage, given that the workspace is small and not expandable.
A significant investment is also required to mobilize, miniaturize, and technologically equip the vehicle, which can range upwards of $50,000. The vehicle is expected to operate as a mobile kitchen and storage area, meaning that significant changes will be necessary.
An entrepreneur should consider all of the above-mentioned advantages and disadvantages when deciding to enter the mobile restaurant market. Lower operational costs are attractive, yet inadequate planning and forecasting could result in an early exit from the market. Given Cat & Joe’s careful forecasting and consideration of numerical data, we have concluded that the advantages of the food truck business model greatly outweigh the