Web Exclusive | March 2011 | By Daniel P. Smith

Franchising Comes to Food Trucks

Gandolfo’s New York Delicatessen is taking a new approach to the food truck trend by franchising.

Gandolfo's plans to take its deli items to the street through franchised trucks.
image used with permission.

While established quick-service brands have entered the food truck scene—Qdoba and Dairy Queen, to name just two—Georgia-based Pool’s Restaurant Group, parent company of Gandolfo’s New York Delicatessen, is going one step further. The company is franchising Gandolfo’s trucks and using the mobile units as an entrance into new markets.

Pool’s Restaurant Group began working on a food truck franchising program in early 2010. Randy Wolken, Gandolfo’s new master franchisee in the Dallas area, is the first franchisee to take the unorthodox leap and will open several trucks before he opens his first fixed location.

Although he initially intended to open traditional stores, Wolken was so excited by the truck idea that he’s adopted mobile units as his marketplace entry point. Spending about one-third of what he would to open a brick-and-mortar unit and inheriting the flexibility to find engaged clientele and active sites, Wolken says he is excited by the possibilities.

“From the owner-operator standpoint, you’re talking about higher net revenues, lower upfront costs, and the ability to react quickly to locations [with a mobile unit],” Wolken says.

Wolken’s plan is to build a fleet of trucks and disperse them like a web over the next three years to find ideal locations for his rooted physical outlets, thereby replacing site-selection guesswork with in-depth research. The first truck will hit the road in early May, and he hopes to have a second Gandolfo’s truck operating by the end of May and a third hitting the streets of Dallas by summer’s end.

Functioning as a moving billboard in Dallas, which is a new market for Gandolfo’s, the deli trucks will help the eatery build name recognition and menu trials. Targeting Gandolfo’s fast-casual clientele, Wolken’s trucks will travel to office complexes, soccer fields, and community festivals serving a menu of sandwiches, salads, and desserts mirroring Gandolfo’s dine-in offerings.

“For less than $100,000, I’m on the ground looking for a location and generating revenue, as well as a customer base,” Wolken says.

Given the day’s financing constraints, Pool’s leadership says their truck-franchising model will attract new franchisees and help them succeed in both site selection and financing for brick-and-mortar units. In addition, operators can run a food truck while their store is under construction, thereby gaining revenue, notoriety, and momentum before the store opens.

“With the truck concept, [franchisees] will have the ability to reconfirm that a specific site is going to be a fine location before they commit to the space,” Pool’s Restaurant Group CEO Dan Pool says. “Plus, you’ll have the ability to go to a lender with an assortment of info and data that you otherwise wouldn’t be able to bring to them.”

“For less than $100,000, I’m on the ground looking for a location and generating revenue, as well as a customer base.”

It’s not just Pool’s newest franchisees entering the mobile restaurant game. An Oceanside, California–based franchisee, among the Gandolfo’s system’s most successful, has ordered a food truck as well. With the franchisee’s physical location serving as the kitchen, Pool’s executives say the franchisee can boost overall revenue 50 percent with the mobile unit addition. In the coming months, Gandolfo’s franchisees in California, Idaho, Florida, Georgia, and Utah are expected to join the mobile program. Another Pool’s concept, Petro’s Chili & Chips, will also launch a food-truck-franchising program.

While intrigued by the concept of franchising trucks and the program’s creative advantages, Mark Siebert, head of the Chicago-based franchise consultant firm iFranchise Group, says he is hesitant to believe Pool’s model will be widely successful. The mobile business’ success resides in the operator’s ability to get from one place to the next, often dealing with uncontrollable variables such as weather, mechanicals, and enforcement.

“Not everybody is going to let you park in a lot,” Siebert says.

Siebert says there are also concerns from the franchisor’s perspective in a program like Gandolfo’s. With trucks expected to produce lower revenue numbers than a brick-and-mortar store, less money will roll into the corporate office; franchisee expectations for headquarters support, meanwhile, are unlikely to waver. In addition, companies can get into messy agreements with franchisees who might resist opening a physical location given lack-luster truck performance, thereby slowing the brand’s overall development.

“My inclination is to like the idea,” Siebert says, “but I feel the need for an extra level of diligence on both sides in crafting the nature of the relationship with regards to legal, operational, financial, and quality control issues.”

Pool, who acknowledges that his company will soon have to address such issues, answers critics’ reservations with a slice of history and unshakable confidence in his company’s program.

“When fast casual came out, you had tons of people questioning the segment’s validity, but look where it is today,” he says. “I believe gourmet food trucks will hit as hard and fast as fast casual and I believe that we can be a leader on the scene.”

Comments

Food trucks have been around forever but Wolken and Galdolfo's Deli undoubtebly will up the ante with high quality menu items and a 1000% improvement from the beat up silver-boxed food trucks that some customers have had as their only option for lunch. Quality sandwiches have never been synonomous with the food truck products of old.I didn't see anywhere in the article anything about protected territories which could lead to huge issues being raised by franchisees of this concept. Without some sort of fool proof system this could be a ticking time bomb just waiting to implode on the whole idea. I also agree that it might be harder to sell a brick and mortar franchise if there's a mobile food truck franchisee that already services the area with a rolling restaurant that can be opened for a fraction of the cost and presumedly a fraction of the time it takes to go from signing a contract to opening day.I think that this idea could be the new wave of the phenomanal restaurant unit growth that companies like Subway, Domino's and Krispy Kreme had early in their history. If it's a carefully, well thought out plan that would address these (and more) concerns I think that the skies the limit!

What Gandolfo's Deli is doing is amazing. Imagine being able to go where the customers are instead of waiting for then to come to you. I'm sure that the craze these trucks will create especially in markets where there is already Gandolfo's stores on the market. Is going to be huge.I think it's a great idea and I hope to see one in Idaho soon!

Fantastic advantages to launching Gandolfo's franchised food trucks -- and with very few downsides in this equation. Not only is site-feasibility tested in advance this way, so is the market (city area) itself. Definitely the way of the future being executed now.Well done article in QSR and great foresight for Gandolfo's/Pool's Restaurant Group.

I applaud you post, extremely well communicated....I have been an approved franchisee for a new generation self serve TCBY in Southeast Florida since July of last year and have had trouble securing the correct location for my business, not just the correct demographics but the right center, space, and co-tenants. We have been through 2 real estate professionals who have suggested locations that I know will have zero long term viability. Everyone and their mother is currently opening a self serve frozen yogurt shop down here and their opening in any location they can find. You have a nickel and dime Industry and 2-3 competitors within 1-3 miles of each store, most individuals think because they saw a line out the door at Yogurtland in California that they are going to hit the jackpot down here. Since there are currently 200+ stores in LA county I think South Florida will be an area that will have a huge proliferation of stores the next few years. As the saying goes, "When people are buying.....sell, when people are selling.....buy". I think I'm going to wait and watch what happens down here and than go into the resale of gently used frozen yogurt machines!!!!

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I have come to covet the days that Gandolfo's comes anywhere near my work. I see 11:30 to sell out and I am there at 11:29. There is nothing better than a Bridge Hampton sandwich with extra avocado! He's doing it well in Dallas, it can only go up from here!

I grew up in the food industry. One of my uncles was a butcher and the other had an Italian Deli in Pizzaria. I was in the fire service for 9 years before being injured in the line of duty. It's been difficult since the doctor's put me back together again. I've often dreamed about opening my own place. After firefighting cooking is my second passion. I live in Charleston, SC which is a foodie city. We've just recently started the food truck trend. Thy city government is now allowing them to operate in the city and even giving them their own lots. I would love to operate my own but I am unable to find the financing.

I grew up in the food industry. One of my uncles was a butcher and the other had an Italian Deli in Pizzaria. I was in the fire service for 9 years before being injured in the line of duty. It's been difficult since the doctor's put me back together again. I've often dreamed about opening my own place. After firefighting cooking is my second passion. I live in Charleston, SC which is a foodie city. We've just recently started the food truck trend. Thy city government is now allowing them to operate in the city and even giving them their own lots. I would love to operate my own but I am unable to find the financing.

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Food truck franchising is definitely hot! There is a new Sizzle Stix Franchise from http://gourmetstreets.com which is operating out of Fallsburg, New York and making a big splash with City vacationers who are in the catskills for the summer. You can find them on facebook here: https://www.facebook.com/sizzl...

I own a food truck. The advantage of going to your customers is way, way overrated. It is NOT about that at all. It is about selecting events and locations where there is adequate business for whatever food you are offering on your food truck to survive and make a profit. Simply stated there are NOT a lot of places one can park the truck and get you enough business for your offering. You can't just drive around looking for customers and you see one and pull over and you make them food and you make money. It is NOT like that at all. The higher possibility is you pull up somewhere and park and wait and you do not make enough to survive. The key to success is being where you have enough customers for your offering. And there are NOT a lot of choices where you make the best choice. There is one or two chances of making the best choice and 98 choices where you make the wrong choice. Those are the odds. It is al about picking the best couple of locations. There are only so many days in the week and hours in a day and your truck better be in the RIGHT place at the RIGHT times. Period.

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