Vendors drive traffic but rev up operator aggression – Nation’s Restaurant News

By LISA  JENNINGS

(June  08, 2009) When Kenny Lao began selling
his restaurant’s dumplings out of a converted postal truck last September, he
didn’t anticipate that competitors would threaten his life because they felt he
was encroaching on their territory.

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Rickshaw Dumpling Bar sells its food in a converted mail truck throughout New York.

Lao, who co-founded the trendy href="http://rickshawdumplings.com/" target=" _blank">Rickshaw Dumpling Bar
restaurant in the Flatiron neighborhood of Manhattan, also didn’t realize the
difficulty he’d encounter finding a mobile vendor permit in a city that doesn’t
issue them anymore, the challenge of ensuring all employees have licenses
whether or not they handle food, or the expense of building a kitchen on
wheels.

But even as some communities begin to view mobile food vendors as
nuisances leading to crowds and litter, and alleged black markets for permits
develop in cities such as New York, the trucks have captured the hearts of
consumers. As such, operators still are racing to get into the game despite
regulatory and competitive speed bumps and startup costs that can range from
$20,000 to $160,000.

Among them are Mary Sue Milliken and Susan Feniger, who in late
June plan to launch a high-end taco truck from their upscale Mexican restaurant,
Border Grill in Santa
Monica, Calif. The truck will make street runs throughout the city—with alerts
on Twitter for followers to find it—and be available for party bookings.

“It’s something that we wanted to do for three or four years, but
it wasn’t a priority,” Milliken said. “What lit the fire was learning about all
these other trucks that were happening out there.”

The partners initially are leasing the truck to test the idea
before they consider buying a truck, she said. The menu will be grab-and-go,
including tacos, quesadillas, tortas and a Caesar salad, as well as ceviche in
corn tortilla cones.

Prices will be lower than those at the restaurant. Tacos from the
truck, for example, will start at about $2 each, whereas a two-taco plate at
lunch in the restaurant ranges from $9.50 to $11.95.

The truck will be a marketing tool for the restaurant, she said.
The question remains, however, whether it will make any money.

“My goal is just to break even,” Milliken said. “But the response
from the public has been so outstanding, I can’t imagine that we won’t be able
to make this work.”

Food vendors in Los Angeles County must obtain specific permits
for a “mobile food facility,” which costs about $340, plus the annual licensing
fee of $695.

Among the requirements, restaurant operators can prepare food in
their brick-and-mortar kitchens and load the truck, but they must still rent
parking space at a commissary to clean their trucks and empty wastewater. Those
without restaurants must prepare food in a commissary.

In Los Angeles, trucks that stop in one spot for more than two
hours must demonstrate that customers have access to a restroom that meets
safety codes, according to health department officials. That rule, however, is
enforced by local law enforcement.

Rules also vary by jurisdiction. For instance, the Kogi truck,
which specializes in Korean tacos and has made headlines nationwide with its
Twitter tweets and cultlike following, reportedly was temporarily banned from
Orange County, just south of Los Angeles, because the truck didn’t have the
required permits specific to that county.

Even in Los Angeles County, vendors must do their research to find
out where they would need additional permits within the county’s 88 incorporated
cities, like Beverly Hills, which many vendors describe as a “no-go zone” where
food trucks are not welcome.

“A lot of cities are more strict, they don’t want roach coaches,”
said Young Chang, owner of a href="http://www.yurijapanesecafe.com/">Yuri
Japanese Café in Los Angeles. “But they want trucks like ours. It’s trendy.”

Chang launched a truck in early spring offering the restaurant’s
top-selling rice bowls with steak, chicken or tofu, as well as spicy red-tuna
rolls wrapped in sesame leaves.

“So many people came into the restaurant and asked when I was
going to open another location, so I thought, if I get my brand on a truck, I
can go to them,” he said.

Chang is also leasing his truck and, he said, so far, it has cost
him less than $20,000 to get on the road.

In New York, however, vendors say mobilizing a truck is
considerably more expensive, in part because permits are so difficult to
get.

Vendors say the city is issuing no new permits to keep the number
of food truck and cart vendors under control. Operators can get on a waiting
list, but many instead lease permits from out-of-business operators.

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Thomas DeGeest, owner of New York’s Wafels and Dinges truck, said his new truck cost $10,000, and nearly $25,000 to customize.

Thomas DeGeest, owner of the href="http://www.wafelsanddinges.com/" target=" _blank">Wafels and Dinges
trucks in Manhattan, offering Belgian waffles, or wafels, said a black market is
developing for two-year permits, which typically range in price from $10,000 to
$15,000.

“A lot of run-of-the-mill vendors are being priced out of the
market,” he said.

Business is going well for DeGeest, commonly known as “the Wafel
Guy,” who recently launched his second truck. Unlike the first, a 1968 step van
prone to mechanical failures, the new truck is a state-of-the-art vehicle, with
a custom-built kitchen with wafel ovens, service windows on both sides, awnings
that flip up into menu boards, and built-in wall speakers to play satellite
radio music at events.

DeGeest said the truck cost about $10,000, and close to another
$25,000 to customize.

Beyond the expense of the trucks and permits, vendors say, the
unwritten rules of the road can be even more difficult to navigate, as trucks
battle for territory, and mobile vendors square off with brick-and-mortar
operators who don’t appreciate the competition.

DeGeest said he generally makes a point of not stopping his truck
near restaurants and vendors in general try to avoid congregating in areas that
could draw the wrath of restaurateurs who might complain to city officials.

Lao, of Rickshaw Dumplings, said he requires his staff to make a
production of sweeping the truck stop site before and after doing business
there, and taking all garbage with them when they leave, to avoid complaints by
local residents.

In San Francisco, permit requirements vary, depending on whether
the vendor parks on public or private property. City ordinances prohibit trucks
from operating too close to schools.

Portland, Ore., on the other hand, has a vibrant mobile food
scene, and though health officials strictly regulate and inspect mobile food
vendors, the businesses are welcomed. Some parking lot owners invite vendors to
park on certain days to create a food court on wheels, health officials
said.

Bo Kwon, owner of Koi Fusion PDX, a truck offering Korean tacos
similar to Kogi, launched his business last month, after spending about $90,000
on his truck. He hopes to get a second truck on the road within six months, and,
eventually, open a restaurant.

“With the economy, this has become an outlet for a lot of chefs
these days,” said Kwon. “My goal isn’t necessarily about revenue, but to create
my brand and identity.—target=" _blank">ljenning@nrn.com