The primary advantage of mobile food facilities over other types of kitchen infrastructure is their ability to move. This allows both easy flexibility in changing locations as well as the ability to easily transport food from central prep kitchens. According to QSR’s 2020 Future of Fast Casual Report (released in April), 84 percent of respondents said location is extremely or somewhat important when it comes to fast casual dining, putting it at the top of the list. Months later, it now seems even more crucial. Unfortunately, what was a great location at the beginning of 2020 might not be great anymore. On top of this, it’s extremely uncertain how real estate risk will change over the next several years. The solution for this uncertainty is flexibility.
Since March, most restaurants have focused on off-premises channels such as third party delivery, order ahead and pickup. And rightly so. Within the span of a couple of weeks, most of America was doing everything from home. So far, however, delivery radius is still dictated by location. Even companies that have focused on virtual brands, another hot topic from the last couple of years, are tied to physical locations, whether their kitchens are in-house or at ghost kitchens. This works well if your physical location happens to be immediately next to your target customers; but less so if your kitchen space is in a highly industrial area requiring at least a 15 min drive to where your customers live.
The benefits of mobility cannot be overstated. It creates flexibility that unlocks the potential of almost every off-premises channel. When you can go anywhere, you can deliver anywhere. As the pandemic subsides and people begin gathering again, you can show up at any event and unlock revenue streams previously off limits. And when you can show up in your community, such as a local school fundraiser, your brand builds roots that will help it weather unforseen storms.
Mobility also allows you to strengthen your real estate position. A strong location for a mobile food facility is a good bet for a brick and mortar restaurant. Taking out even a small percentage of risk may set the future winners in the quick-service restaurant industry apart from those that fail. This concept is nothing new to the food truck industry, where successful concepts graduate into successful brick and mortar locations. In today’s landscape, however, mobility is the answer to a brick and mortar expansion strategy, not the other way around.
Beginning with startup costs, a mobile food facility can be 5 to 10 times less expensive to get up and running than traditional brick and mortar locations. In terms of equipment, a custom built food truck will generally cost more than a trailer or mobile kiosk. Subsequent equipment costs can also be less expensive, since the kitchen layout, design, and equipment are optimized and don’t have to be re-imagined.
There is also flexibility with upfront costs. You can choose to buy or lease, repurpose the equipment for other concepts, or sell it altogether on a food truck marketplace.
Operating costs are also less expensive, since it takes less staff to operate a food truck. There are, however, other costs, such as vehicle maintenance, commissary fees, and fuel costs, that need to be carefully planned for. Without proper experience, hidden costs could cut into profits.
Flexibility for Revenue Generation
The third broad benefit of mobile food facilities is flexible revenue streams. Food trucks allow you to conduct multiple types of business and are equipped for delivery, takeout, walk-up traffic, and catering.
When it comes to delivery, a mobile food facility can expand your radius to any location. The efficiency of mobility allows for higher quality food, since you’re closer to customers, and gives you the ability to optimize pricing based on neighborhood and demographics. It also lets you optimize your virtual brands based on location, unlocking once hidden profits. Essentially, it’s a ghost kitchen that you can place wherever you want, while also having the benefit of direct-vending and brand building.
Events and catering are also untapped sources of revenue for many traditional restaurants. Vending opportunities (i.e., large events, corporate events, and community events) can generate sales and grow your digital presence and brand. Corporate and private catering opportunities can do the same. On top of this, the ability to move from a profitable lunch location (near offices) to a profitable dinner location (near residences) can have tremendous benefits for your bottom line. And once again, pricing is a variable that can change based on event type.
Models for Success
Once you understand the power of mobility, it’s important to understand how it can be added into your current business model. While every business may have a different strategy for expansion and growth, below are two models that have proven to be effective.
The Hub & Spoke Model
As we’ve mentioned earlier, mobile food facilities are not a replacement for brick and mortar locations. If you have existing physical locations, food trucks enable hub and spoke logistics, a sustainable long-term model for expansion in the off-premises world.