Commentary
Startup costs by the numbers: Food trucks versus restaurants
The startup capital for a U.S. food truck is less than a third of that for a restaurant. Startup costs for food trucks in the U.S. are lower than in the U.K. The costs for restaurants is comparable for the two countries.
July 1, 2019 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times
It stands to reason that a food truck requires less startup capital than a brick-and-mortar restaurant, but exactly how much less? According to one U.K. company that studies such numbers, the startup capital for a U.S. food truck is less than a third of that for a restaurant.
Compare the Market, a U.K.-based price comparison website, recently released a report comparing the cost of launching and operating a food truck with that of a brick-and-mortar restaurant. The company offers impartial comparisons on vehicle and home insurance products.
The report compared the costs for starting a food truck and a brick-and-mortar restaurant for both the U.S. and the U.K.
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The startup costs for U.S. food trucks were considerably lower than what most operators have reported to Food Truck Operator. Many of the costs presented for brick-and-mortar restaurants were also lower than what many operators have reported. Nonetheless, costs vary considerably due to the age of equipment and other factors.
The report did not include labor costs, a major factor in any foodservice business.
According to the report, one can expect to spend around $20,600 to launch a food truck in the U.S., which includes $17,600 for the van and $3,000 for premises insurance. Standard cooking equipment costs have been incorporated into the cost of a van.
Startup costs for U.S. restaurants, by comparison, total $67,318, including $50,000 for cooking equipment, $13,080 for seating and layout for 80 people, $921 for a POS system and $2,317 for premises insurance. These costs assume the restaurant space will be rented and not purchased.
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One of the benefits of owning a van is that it can be customized, unlike many restaurant owners that rent space that they cannot decorate as they wish, the report noted.
Recurring costs
The recurring costs will be around $12,922 per month for a food truck in the U.S., with those for a restaurant coming in slightly higher at $13,292.
Recurring costs unique to a food truck include fuel, serveware, parking and a commissary kitchen. Recurring unique costs for a restaurant include rent and utilities.
Licensing costs
There are also licensing costs to consider. This includes business registration, permits, a foodservice license and a liquor license if you're planning to serve alcohol. For a U.S. restaurant, these costs come in at around $8,662, compared to $9,049 for a food truck due to costs of a food truck application and vehicle registration.
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The U.S. versus the U.K.
Costs for establishing a food truck in the U.K. are less than in the U.S., while for restaurants, the costs are comparable for the two countries.
The cost of a van in the U.K. is $10,285, for a total upfront cost of $11,153.60. The upfront costs for a restaurant is $63,358.27.
Licenses total $1,624.76 for food trucks and $7,625.86 for restaurants.
Recurring costs total $7,914 for food trucks and $11,922. 53 for restaurants.
Images courtesy of Compare the Market.
About Elliot Maras
Elliot Maras is the editor of Kiosk Marketplace and Vending Times. He brings three decades covering unattended retail and commercial foodservice.
