Food truck owners are consistently looking for new avenues to setup shop in to increase the coverage of their sales. It’s festival season, and while some truck owners have found these events as a great way to add temporary income to their businesses, others have missed out. This series of articles is designed to help those food truck operators that have yet to dip their toe into the world of festivals as well as those who have given it a go, but selected the wrong festivals to participate in.

When you begin preparations for the prime event season, which usually runs from Memorial Day to around Labor Day, it is important to focus heavily on the type of events or venues that you decide to pursue for your food truck. There are many options to choose from, but generally, the events that will take place in your area fall into two categories: local events and large events.

Event Size

Local Events

Local events could be smaller organizations that represent a local organization or a celebration that involves one or two cities. The size of these events may not necessarily dictate smaller revenue. On the contrary, they can be great sources of profit as the close-knit communities will tend to want to put money back into their town and support the food service vendors involved. Smaller events also generally have lower space fees for their lots because the production cost is lower.

A potential pitfall of smaller, local events is the general state of the community. For example, if one of the larger companies in the city shuts down, this can affect the attendance of the event as well as the money you may make during the event.

Large Events

Larger events, such as state or county run events are held over a period of several days (usually a weekend) and can mean big bucks in revenue since you will have a steady stream of new, captive customers every day. The potential for sales upwards of $30,000 in one weekend is not unheard of.

The reason these events are not as desirable is the level of difficulty it can take to get a booth in the venue. Often times, the vendors that have been successful in years past are given preferential treatment with regards to first choice of participation and location. New vendors with less experience will have a hard time breaking in to the big state events until they can prove that they will be able to handle the demands of a large event.

Another downside of the large events can be the charges associated with space fees. Larger venues tend to charge fees based on a percentage of gross sales. At some events this could mean a 25% cut of sales.

Attendance to Booth Ratio

When you are talking with event organizers, there are several important questions you will need to ask in order to determine the probable success of your food truck. The first is the estimated attendance of the event, or any past records, if the event has more than one year under its belt. This is a fairly standard question. The next set of questions will take a little more finesse. It involves finding out how much and what type of competition you will have.

Determine the competition count. Determining exactly how many food vendors will be at the event will determine how much of a “cut” of the profits you will get when all is said and done.

Discover the types of menus being sold. If you are able to find out what the menus of the competing vendors are going to be, you can determine if your truck will be more or less successful.

For example, say that you are able to find out that there will be ten food vendors at a small event. Six of them will be serving lunch and dinner items such as burgers, hot dogs and barbeque. Two of the vendors will be serving one or two specialty items such as kettle corn and elephant ears. One other vendor will be serving up espresso and other coffee drinks. If your food truck menu consists of primarily American style meal items, this not be a profitable event for you; however, if you sell snow cones or cupcakes, you could very likely make a killing since there are no other vendors selling something similar.

Find out booth locations. How the venue organizers assign booth locations could greatly affect your business at an event. If the areas are assigned on a first come, first served basis, and you get one of the first slots, you can choose the spot that will best suit you and your truck. If the venue assigns spots based on seniority, and you are a newcomer, it is likely you will not have prime placement in the space provided by the event.

Space Fees

Space fees are the rental fees you pay to the event or event organizers for the space that your food truck or trailer will occupy for the duration of the event. They range in prices depending on the size and relative popularity of the event. There are two types of fees: flat fees and percentage fees.

Flat Fees

A flat fee is exactly what it sounds like. You pay a fee up front to rent the space. The fee does not fluctuate depending on the success of the event. Typically the flat fee is charged based upon the frontage length, which in the case of the food truck would be the entire length of your vehicle from end to end. Flat fee events are almost always less expensive than events that have space fees based on percentages.

Percentage Fees

Larger events and events that are longer in duration and more established typically charge percentage fees. There is a deposit paid at the beginning of the event and at the end, the vendor pays a percentage of his or her profits to the organization, minus the deposit. The fee is usually between ten to 25 percent.

For example: The event deposit for the event is $100 and the percentage is 15 and you make $5000 over the course of the event, then you would owe $650.

(5000 x 0.15)-100=650

While it is the most common form of charging for spaces, it is certainly not the most popular as many vendors say that it does not take into consideration the overhead for running a business, such as food cost, utensils and packaging.

The one benefit of having a space fee based on percentage of your sales is that, if sales are poor, you will not have as high of a space fee as you would if you were paying a flat rate.

In the next article in this series we will discuss how to decide which events will work best for your food truck business based on event length and where the event is located. We hope you found this article helpful.