Paying the Food Truck
The most common questions we hear are about how to do business with a Food Truck. With the use of mobile card readers and wifi, Food Trucks have been able to adapt to doing business on the road quite nicely! If a traditional catering company can do it, most Food Trucks can, too! Hopefully the answers below help give you a good starting place to discuss your event with the Food Trucks you contact!
All About the Food
One of the best things about the Food Truck industry is that every one of them specializes in something different! Think of them as mini restaurants with varying levels of chefs inside. While you might not want the guy that specializes in funnel cakes to cater your wedding, there’s a school somewhere that can’t wait to find him! Use the filters when browsing through the Food Trucks to find the one that fits your special occasion perfectly! Below are a few answers that will get you started.
At the Event
There are a few things on the day of your event that will dramatically impact how well the Food Truck is able to serve your guests. Each of these things requires planning ahead of time and sometimes they aren’t obvious until after the fact. As two people how have probably coordinated and run over 1000 Food Truck events in Arizona since Food Trucks became popular, we have a little advice to share that will hopefully keep your event running smoothly!
Paying the Food Truck
What does it mean when a Food Truck requests a guarantee?
Giving a Food Truck a “guarantee” means you are guaranteeing they make a certain amount at the event or service. At the end of the event, you will subtract the amount they made from the guarantee amount and you owe them the balance.
Example: If you guarantee them $500 and they make $300, you owe them $200. If they make $600, you owe them nothing.
The minimum guarantee is usually $500 but can be as high as $1000 or even $1500 on the busiest days of the year. (The last two weekends of April and October are the busiest.)
Why are guarantees requested?
$500 is typically their financial break even point for a meal service, or around 60 meals. If that is not possible or they think it is too risky, they will ask you to offset the risk by offering a guarantee.
A gourmet Food Truck is not the same as a lunch or route truck (the kind you see at construction sites for quick stops). Operating at an event means at least 5 hours of labor outside of the event time as well as purchasing gas, propane and fresh food that has a short shelf life. A handful of unsuccessful events at the right time of the year is all it takes to put a Food Truck out of business and they have to protect their business.
Why should I offer a guarantee?
Without past attendance numbers or other facts that make the Food Truck owner confident it will be a success, a guarantee is the only way to mitigate the risk for the Food Truck owner and book a top Food Truck.
The successful Food Trucks in Arizona know they have a limited number of weekends during good weather to make their profits for the year and keep their business afloat. They will not take a risk that the host is not willing to take with them when there are more profitable events with a successful history available. If you do not think there will be enough people at the event to take the risk yourself, you might not have the crowd to support a Food Truck.
Do Food Trucks accept cash and card?
Yes! A Food Truck that doesn’t accept debit/credit cards is very unusual. It is highly recommended that proper health and business licensing is looked into as not having a card reader (which is free) often means they do not have the proper business licensing to acquire a card reader. Not accepting cards should raise serious red flags.
On another note, several are beginning to not accept CASH at public events due to safety concerns so this might be something to ask about when booking. Food Truck robberies have unfortunately become common in some areas of the country.
What are some of the common payment arrangements?
While each Food Truck operates uniquely, almost all will work with the following scenarios.
1. Guests pay for their own meals. (This is usually where a guarantee is requested.)
2. Host hires the Food Truck as a traditional caterer and pays a specified amount per person.
3. Open Bar Style – Host pays the balance of the tab at the end of the night.
4. Host gives out “tickets” to guests to be used at the Food Truck. The tickets or coupons can be for a specific dollar amount so guests can pay the balance for higher priced items or a smaller menu can be agreed upon with the Food Truck prior to arrival so each ticket is worth a single meal. The Food Truck will then trade the collected tickets for payment from the Host at the end of the event. (The ticket you create can be anything – even a blank piece of paper. A way to track the amount given out as well as to require guests to go inside your open house or other marketing event is critical to everyone’s success. Don’t worry about it being fancy.)
Have another idea? Food Trucks are typically very flexible! Give them a call and ask!