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Restaurants

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free_markets_not_crony_capitalismOver the last four years we have continually covered stories of restaurant owners that have lobbied their local politicians to try and rid themselves of competition. Some have been unsuccessful however far too many have found friends in their local city councils and kept food trucks at bay. Yesterday, Daniel J Smith of investors.com used the mobile food industry as an example of how crony capitalism not only hurts our economy but also consumers.

This crony economy — when politicians choose which businesses get special breaks and benefits — is a tragedy for economic freedom and the well-being of businesses and consumers alike. Not only does this system create an unfair playing field, but it also erodes the quality and choice of products and services available to consumers.

Consider the food truck industry that has sprouted up and thrived in many U.S. cities. Culinary entrepreneurs have recognized food trucks as a way to test their ideas among the public without the high cost and risk that come with running a brick-and-mortar restaurant. From burritos and kabobs to cupcakes and doughnuts, the public welcomes the opportunity to try new foods at affordable prices from these mobile kitchens.

But not everyone welcomes choice into their neighborhoods. Threatened by the competition, restaurants have worked successfully with many local governments to regulate food trucks out of business.

In our nation’s capital, Washington, D.C., regulations were proposed earlier this year to limit food trucks’ ability to operate and serve customers. Before the changes even went into place, several food truck owners recognized that they wouldn’t be able to afford to stay in business and decided to close up shop.

It is cronies who win in situations like this, while customers and entrepreneurs lose.

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tip of the dayRunning a food truck has its challenges; dealing with the competition is one of the biggest ones. Diners don’t have to step up to your mobile food business – they could always go to another food truck or head into a local restaurant. You need to remain mindful of this and do all you can to remain competitive. Here are some points to bear in mind:

  • Play up your strengths and make them matter to your customers.
  • Analyse your competition (mobile and brick and mortar), determine their deficiencies and exploit them.
  • Close the gaps on your own deficiencies.
  • Continually create new points of difference.
  • Know your market, how your points of difference matter to them, and how to reach them.

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Knoxville Restaurant Owners

Mine Mine Mine!!!

KNOXVILLE, TN - Downtown restaurant owners are fighting against food trucks near their establishments.

The Downtown Knoxville Restaurant Owners group formed after the city announced they were working on a pilot program for food trucks. Twenty-one restaurants from Gay Street, the Old City, and Market Square hired lawyer, Keith Stewart, to represent them.

He sent a letter to the city Friday outlining their concerns. The letter states,

Downtown restaurant owners believe food trucks have a place in our city, but not in our downtown.

They argue food trucks get the advantage of a prime location without the permanent overhead costs.

“Frankly there are a lot of days where there are

more restaurant seats than there are customers. And we just think it’s unfair for them to come in during peak times and take away the clientele and customers we’ve established over the years,” said Bistro at the Bijou owner, Martha Boggs.

The group requests that all food trucks be confined to the World’s Fair Park area. They also list other concerns such as lack of restroom facilities in food trucks and “tacky, obnoxious” signage. They allege food trucks do not provide a stable tax base or have the same rules and regulations as restaurants.

Meanwhile several food trucks have also formed a group called the Knoxville Mobile Restaurants Association to help further their interests. Organizer Johnathan Borsodi said food trucks operate the same way as brick and mortar restaurants.

“We are actually mobile restaurants. We have the exact same establishment permit that every other restaurants have. In fact we actually have more requirements,” Borsodi said.

He said they also are required to meet the same health codes and provide sales tax revenue to the city and county.

“Savory and Sweet” food truck’s owner, Byron Sambat, said they are not targeting the same customers as downtown restaurants.

Find the entire article at WBIR.com <here>

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Since food trucks appeared on the restaurant scene their perceivable threat to brick-and-mortar restaurants has been widely debated, and a recent survey conducted by The NPD Group, a leading global information company, finds that consumers replace a quick service restaurant (QSR) visit with a food truck visit.

NPD-GroupThe NPD foodservice market research survey, which addressed the awareness and practice of obtaining foods and beverages from food trucks, asked respondents where they would have obtained their meal or snack if not from the food truck, and about half of the consumers surveyed said they would have ordered from a fast food restaurant. Another 20 percent of respondents said they would have skipped the meal altogether, implying their visit to the food truck was spontaneous or unplanned.

The top reasons consumers gave for using food trucks related to availability of “interesting” foods and convenience, which are the traditional strengths of QSR outlets, according to NPD. Since the top foods typically offered by food trucks are hot sandwiches, Mexican foods, cold sandwiches, and soups, Mexican and sandwich QSR places may view food trucks as more direct competition than other restaurant categories. Dayparts are another way in which food trucks compete with QSR outlets since the trucks are primarily used for lunch and snacking, which is likely due to the specific location and the food/beverage/snack items offered, finds NPD.

Although quick service restaurants have more reason than full service operators to be concerned about the prevalence and location of food trucks, another finding of the survey is that while some consumers are regular users, many make purchases from food trucks only very occasionally. Over half of those aware of food trucks in their area say they purchase from them once every two to three months or less often. Further, ordinances and permits vary from city to city, with many municipalities placing considerable restrictions on location and food offerings. In certain parts of the country the weather and season also limit food truck availability outside of the spring/summer months.

“For now at least, food trucks need not be viewed as a threat to restaurant demand nationally,” says Bonnie Riggs, NPD restaurant industry analyst. “However, in markets with a developed food truck presence, QSR operators may wish to take note of the benefits food trucks offer, such as different and fresh food, especially as a means to build their snack business and/or protect lunch traffic.”

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fearCHARLES COUNTY, MD - The Charles County commissioners rejected a resolution that would have permitted food trucks in the county after local restaurant owners spoke against the proposal at a public hearing Wednesday.

The proposal would have allowed mobile food trucks to operate in La Plata, Hughesville, Bryans Road, Benedict, Cobb Island, Newburg and Nanjemoy, as well as at county parks, fire departments, the White Plains Golf Course, and Indian Head trailheads and pull-offs. Vendors would have needed to receive permission from the property owners before they could set up.

Art Jolliffe, the 11-year owner of Gilligan’s Pier restaurant in Popes Creek, said he employs 46 people and has paid nearly $115,000 in taxes as a local business.

“I believe that if you let these trucks into our county where they can set up and put any kind of sign on there that they want to, that it’s going to do nothing but hurt the small businesses here in Charles County,” he said.

Jolliffe also took issue with the lone $250 permit prospective food truck vendors would have to pay.

“I pay over $1,000 for my liquor license, $300 for a food license. I pay well, I pay septic, and what are they paying?” he asked. “What’s it say for the small businesses of Charles County? It says we don’t care. That’s what it says to me.

“I worked hard for what I got, and I’d like to keep what I got. It’s hard enough to make a living in this county as it is with all the taxes that we do all have to pay in this county. I’ve got well taxes, I got septic taxes, now I got a rain tax. Are we going to rain tax them, too?”

Next to speak was Gary Fick, head chef at Blue Dog Saloon in Port Tobacco.

“Everything he said,” Fick began. “Pretty much what Art said, but the costs and the regulations aren’t apples to apples for everything.”

Find the entire article by Jeff Newman at SoMDnews.com <here>

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downtown akron partnershipAKRON, OH - Officials in Akron aren’t exactly eating up the food-truck craze.

The president of the city council in Akron said Monday that a committee will look into food trucks and what effect they’ve had on established restaurants in other cities where they are popular.

The Akron Beacon Journal reports local food-truck operators and their supporters have been lobbying council through social media and other means to permit them in the city.

But the Downtown Akron Partnership has raised concerns about food trucks competing with downtown restaurants.

Food truck operators, who showed up at the council meeting for the third straight week, said they’re pleased the city is at least considering their request.

Other cities around the country are also dealing with the proliferation of food trucks.

Food trucks have become a popular staple for those in downtown Cleveland. During the summer, food trucks are celebrated with Walnut Wednesdays.

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white-castle-food truckWhite Castle is getting ready to serve its square-shaped sliders on wheels with the planned launch later this month of two food trucks in Louisville, Ky., and Columbus, Ohio, where the company is based.

The so-called CraveMobiles will be available only for events at first—that includes weddings, in case either Harold or Kumar are planning to tie the knot—while company officials determine exactly where the trucks will be stationed, says Jamie Richardson, a White Castle vice president. Once regular locations are mapped out, the trucks will likely stay open 24 hours, just like almost all of White Castle’s brick-and-mortar stores. Richardson says the food-truck menu, although not yet finalized, will include three variations on the chain’s signature sliders and might see items not available in stores, such as salty caramel fries.

The ability to easily test new products is part of what prompted White Castle to jump on the food-truck trend that has swept through big U.S. cities in recent years. Richardson described the trucks as a “strategic tool to test new items and look at various sites for new restaurants. We can see how welcoming a neighborhood is” before investing in a new location. It’s also a play for millennial customers, who are frequent customers of White Castle, according to Technomic research, and who have increasingly flocked to food trucks.

White Castle, which is privately held, currently has a few more than 400 restaurants in 12 states, mainly in the Midwest, New York, New Jersey, Kentucky, and Tennessee. All locations are company-owned. The chain’s revenue in 2012 was $630 million, of which roughly 15 percent came from its frozen burger line sold in grocery stores, says Richardson.

Other chains have experimented with food trucks as marketing platforms and “rolling test kitchens,” including Wendy’s, Chick-fil-A, Taco Bell, Applebee’s and Sizzler. A National Restaurant Association survey found 6 percent of quick-service restaurants and 4 percent of fast-casual restaurants operated food trucks.

While Richardson does not disclose how much the company has invested in the trucks, he says they have “great potential and are a real worthwhile investment.” White Castle expects the trucks to pay back in less than 18 months. It might depend on how many weddings they book.

Find the original article by Venessa Wong at businessweek.com <here>

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Eat-ClubSAN FRANCISCO, CA - Food trucks aren’t exactly new, but most only have one specific type of cuisine — even if that cuisine just happens to be all the latest rage in molecular-gastro Indian-Irish fusion. Not only that, but you’re often stuck waiting in a long line to order and pay, then waiting some more for your food to be ready.

EAT Club, launched a private beta last week, has a unique spin on the way that users get lunch. The service hopes to get rid of all the hassles around waiting in line, paying, and waiting for your food, all with a convenient food truck that serves a variety of foods, and a mobile app to handle ordering and payment.

Over the last few years, EAT Club has served lunchers on the Peninsula with a variety of different food choices, but now it has made its was up to San Francisco, where it will serve startup kids and other hungry office workers. And it’s coming here with a food truck specially designed to provide eaters with a variety of awesome food choices.

EAT Club’s food truck will have a variety of dishes from multiple restaurants available all in the same truck, giving customers a selection of cuisines to choose from. Charter restaurants participating include Bar Tartine, Nopalito, City Smoke House BBQ, and Onigilly, among others. Altogether, EAT Club has more than 30 restaurants signed up so far, and will have options from at least three available on any given day.

How did EAT Club get those restaurants on board? Partly through the food truck itself, which is designed to provide the best experience for customers. A gutted-out old school bus, the EAT Club truck has been renovated with mobile ovens for hot foods and refrigerating units for cold foods. The end result is that all dishes are loaded into the truck right from the kitchen, so that when a customer picks up his food, it’s kept at the desired temperature.

So the food is great, but what about the service? EAT Club handles that with a mobile app that allows you to choose among a bunch of different food options. It provides you with details about why the dishes were picked — EAT Club has a food curator, natch — and more information about the restaurant.

Once you’ve found something you like, you just click to order and the app automatically charges your credit card. After that, you’re free to head down to the truck at your convenience and just pick up your food. No waiting, no fuss.

To start, EAT Club will have its food truck parked around the Financial District and SOMA neighborhoods in San Francisco, hoping to appeal to office workers downtown who don’t have lunch provided to them every day. The app is available now in private beta, as the company tries to measure demand and make sure that it’s got the right amount of food ready for new users.

Find the original article by Ryan Lawler at Tech Crunch <here>

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Sok Sab BaiPORTLAND, OR - Not every Portland food cart owner aims to open a full restaurant. But for many, a cart’s small scale is great for perfecting recipes, fine-tuning a brand and developing a following before making the brick-and-mortar leap.

This spring, at least five new restaurants will join former carts such as Lardo, the Baowry and Pie Spot in making the transition to fixed addresses, roomier kitchens and rain-proof seating.

Here are their stories, in their own words. (Opening dates are subject to construction whims.)

SOK SAB BAI  - Opening in April at 2625 S.E. 21st Ave., Unit B.;soksabbai.com

EL CUBO DE CUBA  - Opening May at 3106 S.E. Hawthorne Blvd., Facebook: El Cubo de Cuba

BRUNCH BOX  - Opening in April at 620 S.W. Ninth Ave., 503-287-4377 (that’s 503-BURGERS, if you’re counting at home), brunchboxpdx.com

FIFTY LICKS  - Opening in June at 2021 S.E. Clinton St., 954-294-8868, fifty-licks.com

ADDY’S SANDWICH BAR  - Opening in April at 911 S.W. 10th Ave., 503-267-0994, addyssandwichbar.com

Get the whole story of each of these restaurant openings from the original article by Michael Russell at Oregonlive.com <here>

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Twisted_Sister_House_of_HungerA Minnesota food truck operating under the name “Twisted Sister House of Hunger” receives a cease and desist letter from heavy metal band Twisted Sister objecting to the name of a popular food truck. The estate of Frank Sinatra successfully opposes a food truck in Michigan seeking to federally trademark the name “Franks Anatra.” A New York City restaurateur is victorious in using his top selling pork belly steamed bun sandwich known as “Chairman Bao” and forces a food truck in San Francisco to change its name from “The Chairman Bao Truck” to “The Chairman Truck.”

Across the nation, restaurants, food trucks, and their loyal customers are wrapped up in the growing popularity of mobile cuisine. As the growth trend spirals upward, so will the battles in the courtroom and before the Trademark Trial and Appeal Board.

According to Richard Myrick, the author of Running a Food Truck for Dummies and the editor-in-chief and founder of Mobile Cuisine Magazine, there are more than 7,000 food trucks traversing the streets of the United States, from small town to bustling metropolis. Markets such as San Francisco and Miami are attracting chefs and entrepreneurs in droves as they take their culinary skills and ideas mobile. As the number of food trucks grows exponentially, the number of filings for federal trademark protection has increased. As of January 2013, there are over 900 live applications or trademark registrations in connection with providing mobile food services. In addition, there are over 300 service marks that specifically reference a food truck in the description of services.

Branding is a critical component to operating a successful food truck operation and savvy entrepreneurs are seeking to secure their names on a federal level.  “We’re intending to be a national brand,” says John Levy, CEO of the AZ Canteen food truck, the brainchild of Andrew Zimmern, the local chef and restaurant critic turned international television host with his popular television shows Bizarre Foods and Bizarre Foods America. The truck was launched last summer. “We are putting a lot of effort, energy and resources into our trademark,” Levy added.

Searching, clearing, and securing a food truck name are top priorities for new food truck operators and brick-and-mortar restaurants looking to bring their menus mobile. The name needs to be checked before the truck hits the street. “If possible, retain the assistance of a trademark lawyer to make sure that the rights to the name are available,” says New York City Food Truck Association President David Weber, who wrote The Food Truck Handbook. Failing to do so often leads to lengthy trademark battles, hefty legal expenses, and costs for rebranding, he adds. “There have been instances in New York where other hospitality businesses on the other side of the country had rights to a name and the New York food truck had to rebrand itself.”

Trademarks and service marks provide exclusive protection of words, phrases, symbols, designs, or a combination of these elements. Obtaining federal trademark protection confers numerous benefits including a legal presumption of ownership, nationwide trademark priority rights, listing in the online databases of the United States Patent and Trademark Office, which is reviewed and cited by Examining Attorneys considering filed trademark applications, and deterring others from using identical or confusingly similar marks.

You can find the entire article by Kenneth Suzan at Food Service News <here>

Follow Kenneth Suzan on Twitter

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