Mobile Food Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 10,100 mobile food service operators in the US use food trucks and carts to sell prepared meals, snacks and beverages for immediate consumption to walk-up customers. Mobile food services also contract with individuals and businesses to cater food at events, such as parties, corporate gatherings, and festivals.
Economic Sensitivity
Food trucks that catered to construction sites and industrial parks were hit hard during the Great Recession when construction and manufacturing declined and workers were laid off.
Permit Restrictions
Food trucks are typically permitted and inspected by the city in which they operate, with regulations varying significantly from city to city.
Industry size & Structure
A typical mobile food service firm operates out of a single location, employs 2-3 workers, and generates over $350,000 annually.
- The mobile food service industry comprises about 10,100 companies, which employ about 27,000 workers and generate about $3.5 billion annually.
- The industry is highly fragmented with the 50 largest firms accounting for less than 15% of industry revenue.
- Most companies are small, independent operators - about 83% employ less than 5 workers.
- Immigrants own 30% of America’s food truck businesses, which frequently represent the first step toward launching a restaurant, according to the Bush Institute-SMU Economic Growth Initiative.
- Cities with large numbers of food trucks include Los Angeles, Washington DC, San Francisco, Houston, and Miami.
- Customer industries include individual consumers, event organizers, and businesses seeking mobile catering.
Industry Forecast
Mobile Food Services Industry Growth
Recent Developments
Jul 14, 2024 - Employment Levels Rising
- Employment by catering and mobile food services jumped 10.4% in May compared to a year ago, while average industry wages barely budged, according to the latest US Bureau of Labor Statistics data. Catering and mobile food services employment is well above its pre-pandemic high and has risen 28% since the start of the year. Average industry wages rose 0.5% in May year over year to $22.76 per hour but fell by more than $1 from their peak in December. Wage growth in the US is slowing from a recent torrid pace, signaling that the labor market is cooling, according to the latest jobs report.
- As heat waves broil the nation, the Biden administration has announced new protections to protect workers from extreme weather, according to a White House press release. The Department of Labor’s Occupational Safety and Health Administration proposes a rule to protect workers that, if finalized, would establish the nation’s first-ever federal safety standard addressing excessive heat in the workplace. The proposed rule includes requirements for identifying heat hazards, developing heat illness and emergency response plans, and implementing work practice standards — including rest breaks, access to shade and water, and heat acclimatization for new employees. If finalized, OSHA projects the rule would affect approximately 36 million workers. Temperatures can climb to over 100 degrees Fahrenheit inside the trucks, largely due to the heat produced by grills or stovetops. Moreover, food safety regulations in some states require workers keep the back doors of food trucks closed, cutting off a critical source of ventilation.
- Restaurants are ditching QR menu codes, The Wall Street Journal reports. Growing customer complaints and concerns over the ubiquitous codes – a pandemic-era adaptation to reduce contact that has lingered – have convinced some restaurant operators to retire them for good. While many food trucks rely on QR menu codes and online ordering apps to speed service, they may want to take a hybrid approach, using QR codes as a secondary approach to ordering or paying the tab to avoid alienating potential customers. According to WSJ, attitudes about QR codes skew along generational lines, with younger diners appreciating the more efficient service they get using QR codes. However, patrons are likelier to accept QR code menus in casual dining spots, such as food trucks.
- Food truck operators looking to expand but unable to get a bank loan may want to consider revenue-based financing (RBF), according to Mobile Cuisine (MC). RBF provides vendors with growth capital in return for a percentage of a truck’s future revenues. While RBF is technically a loan, there are no fixed payments, no set time period for repayment, and no set interest rate, according to MC. Instead, the owner pays a fixed percentage of the food truck’s revenue to the lender, with payments directly related to how much revenue the truck brings in. The loan is fully repaid when payments reach the repayment cap, which typically is equal to 1.5 to 2.5 times the principal amount. However, RBF is more expensive than getting a bank loan since revenue-based financing investors typically target an annual return of 15-30%, according to MC.
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