## Food Truck Food & Labor Cost Percentages

If you are running a food truck business, you understand that the most important costs under your control are food & labor costs. Together these figures are known in the industry as a food truck’s prime costs. Being able to compare these costs ( in a percentage format) against typical scenarios of other foodservice businesses is helpful in the management of your mobile food business.

## Food Truck Food & Labor Cost Percentages

#### Costs Vary Widely By Type of Food Truck

Both food and labor costs vary with the type of food service operation. As a rule, food trucks that sell higher quality food products will have higher food and labor cost percentages than the typical taco truck. The product sales mix, quality of food and service, pricing and amount of hours the truck operates will impact your food and labor cost percentages. Furthermore, state minimum wage differentials affect the labor cost percentage. The extent of beverages sales as part of your truck’s food mix also can have a considerable impact on total food cost percentages.

#### How Food & Labor Cost are Calculated

Food & labor cost is calculated as a percentage of the total volume of revenue (sales). If a food truck does \$5,000 per week and the total cost of food and beverages is \$1,750 for that week, then the food cost is considered 35 percent. If, at the same food truck, labor (including payroll taxes and benefits) equal \$1,250 for the week, then the labor cost is 25 percent. Total prime costs are 60 percent in this example.

#### What Are the Ranges?

Certain hot dog or taco trucks can achieve labor cost as low as 20 percent, while food trucks with menu items with intensive preparation time are more likely to see labor in the 30 percent to 35 percent range. Food costs (including beverages) for the entire food service industry (including table service brick and mortar restaurants) run typically from the 25 percent to 38 percent range, depending upon the service style of establishment and the mix of sales.

#### Look at Prime Costs to Determine Success

In order to make money in the food truck business, prime costs should generally be in the 60 percent to 65 percent range. How that breaks down between food and labor is less important than achieving a prime cost maximum that produces a satisfactory profit. So if one of the prime costs is in the higher range, the other prime cost must be in the lower range to achieve profitability. Remember it is the combination of food & labor cost that creates your food truck’s bottom line.

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### About the Author: Richard Myrick

Richard is an architect by degree (Lawrence Technological University, Southfield, Michigan) who began his career in real estate development and architectural planning. In September of 2010 he created Mobile Cuisine Magazine to fill an information void he found when he began researching how to start a mobile hotdog cart in Chicago. Richard found that there was no central repository of mobile street food information anywhere on the internet, and with that, the idea for MCM was born.

1. Lesley Greenfield Sep 9, 2013 at 10:41 am

Costs are also very dependent on area of operation. In Los Angeles county you are required to store at a commissary for up to \$1500 a month.

2. Mobile Cuisine Sep 9, 2013 at 11:12 am

Very true, however those additional costs are technically overhead. Food Cost + Labor Cost = Prime Cost. In the restaurant industry, the average number for this is about 65% of Total Revenue. A restaurants prime costs do not include their lease/rent, utilities, property taxes etc…those too are overhead costs.

3. Street Food Locator Oct 10, 2013 at 5:32 am

[…] Food Truck Food Labor Cost Percentages […]

4. Mobile Cuisine Nov 5, 2013 at 9:34 am

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