The end is near …

This is part of an ongoing series about the start up of a food truck called NaanStop. We will be launching in the first quarter of 2011. You can follow us on twitter (www.twitter.com/naanstop), on Facebook, or email me at neal.idnani@gmail.com with any feedback. Check back here for weekly updates!

 

There are a few specific requirements I was looking for in my truck/commissary search for NaanStop. In a truck, I was looking for one in good repair that was relatively new at a reasonable price. In a commissary, I was looking for one that was clean, in a good location, and of course also at a reasonable price. I did not think it would be as difficult as it was to fulfill these criteria.

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A new food truck costs roughly $100,000-$150,000. And, financing is available, making monthly payments around $1500. However, buying a new truck requires putting down 10k-20k – valuable cash needed in a startup business. Because we wanted to conserve cash for operating expenses, we chose the route of renting a truck, which proved to be complicated for one main reason: it is mainly commissaries that lease trucks. When you lease a truck from a commissary, they require that you also house the truck at their commissary. This meant that we had to fulfill all of our requirements in one place. For this reason, the search for a leased truck was frustrating to say the least. After calling each of the 27 commissaries in LA and struggling through some serious language barriers, I was able to find 7 that lease trucks. Below is a summary of the info we gathered from the options we seriously considered:

Road Stoves Slauson Foods Avalon Foods Streetside Gourmet
Price (truck+parking) $3600 $3100-$4100 $33001 $2800
Age of Truck 5y-20y 5y-20y <10y <10y
Maintenance Included? Yes Yes Yes2 Yes
Cleanliness Unknown3 Average Above Average Excellent
Location Downtown LA Slauson/Avalon Slauson/Avalon Van Nuys

1. Avalon offers 1 month free rent and decreased security deposit when you sign a 1-yr lease as opposed to a standard 6-mo lease

2.  Avalon also offers 24hr roadside assistance and a loaner truck during repairs

3.  I was unable to get an appointment with Road Stoves to inspect their commissary

Initially, we eliminated Road Stoves because we had the understanding that they only offered older trucks. While I heard they were very responsive with maintenance issues, it is worth it to me to pay a little extra for a newer truck and know I would have fewer breakdowns and fewer missed services. A commissary may pay for repairs, but they wont pay for lost product, wages, and revenue for missed services, which can be $500-$1000 per day and more if you are missing a special event. These issues can be far more costly. Josh Hiller from Road Stoves recently let me know that they now offer newer trucks and several of their clients are running trucks newer than year 2000, making it a more viable option. However, after continuing my search, some other options proved to be a better fit for me.

We eliminated Slauson mostly due to the uncertainty of doing business with them. After speaking to the manager, I was told to call back a week before I needed a truck and he would tell me then what he had available. With Slauson, I would be stuck with whatever truck he would have available regardless of the price and condition. Frankly, it seemed ridiculous to me that anyone would want to accept that option.

Streetside Gourmet presents a great package. And, the owner, Pete seems like a great person to do business with. If I were looking to do business primarily in the valley, it would probably be my top choice. However, commuting from Van Nuys to Santa Monica, South Bay, and Downtown on a regular basis we figured would add about $500 a month in gas and increased labor costs from sitting in traffic on the 405.

So in the end, it seems like Avalon will be our best option. It had the best mix of price, location, and quality for our needs. Their offer for 1 month of free rent and the 24hr roadside assistance and a loaner truck in the event of a breakdown really put it over the top. Every day, there are so many intangibles in the food truck business. Mitigating some of those intangibles allows you to focus on what is most important: providing great food and service to your customers.  It was difficult for us to get in touch with all of the right people and was a slow process to gather all of the information we wanted. However, I think the research has paid off in finding an option that fits all of our criteria.