Food cart business is increasingly becoming popular among Filipinos because of how easily manageable the business is, and it does not require a large capital to start since setting up a food cart business is fairly straightforward.
So naturally, you will be faced with stiff competition if you decide to try this business concept. And to help you successfully start a food cart business, we’ve come out with tips and guides shared below. So continue reading if the food cart business is what you are looking for.
What is a food cart business
The food cart business in the Philippines is considered a type of food service establishment that operates from a mobile cart or kiosk, unlike restaurants, where it operates from a shop that is usually located in buildings or shopping malls.
Most food carts are often situated in busy locations like street markets and malls, while its food offerings are usually smaller food items and beverages such as sandwiches, drinks or desserts. The concept or the goal of it is to provide convenience for people where they can grab a meal or beverage on the go. However, there are also food carts that specialise in a particular type of food.
Types of food cart business
There are two types of food cart business in the Philippines. It can either be a family-owned operation where you rent or purchase a mobile cart to run the business or you attain a franchise from a brand to sell their food.
How to start a food cart business
Whilst it is rather straightforward to start a food cart business in the Philippines, it is still good to know certain things to ensure you are on the right track to prevent any delays or losses in investment.
1. Franchise or build your own
The first question to ask yourself is should you opt for a franchise or start your own food cart business. The good news is that there is no right or wrong between both choices, and more of which type of food cart business best suits your requirements.
Franchising can help you to save time on planning and executing, in terms of branding and producing the food recipe, so generally Filipinos are more skewed towards this business type. However, franchising is quite costly because of their terms of service. Some companies charge a monthly fee or royalty fee, while other businesses include a selling term where a small percentage of the sale will be regarded as their commission. And that is on top of the initial set up cost that ranges between 15,000 pesos and 200,000 pesos depending on the type of food cart you use.
On the other hand, it is more affordable to start your own food cart business, but that also means that you have to build the business from scratch like coming up with a business name, designing your own logo and finding suppliers to provide the required ingredients.
2. What is your goal of setting up a food cart business
Making a choice between franchise and starting your own food cart business will depend on your goal. While the end goal is the same, which is to be profitable, there are other factors involved as well. For example, if you are looking to set up the business as quickly as possible, then perhaps going for the franchise route will be better for you since these brands already have a business plan while also providing training so that your food cart business can start almost instantly.
But if you decide to start from scratch, the following tips below will help you to achieve success as a food cart business owner.
Create a food cart business plan
Every business requires a plan, including a food cart business. The business plan is like a blueprint for success as it can help you to visualise the requirements and tasks that you need to execute, while also recording milestones, targets and goals you need to achieve.
And a comprehensive business plan will come useful when you need to find potential investors or partners to scale your food cart business.
Focus on one product
Less is more. Always remember that your food cart business is not a restaurant. Focus on one product and perfect it. Think of siomai, waffles, nachos and shakes as inspiration for the type of food you are looking to sell.
Another way is to think of innovating existing food to sell something new, if you do not want to sell the same type of food as everyone else.
Location is key
Good thing about the food cart business is its mobility. You can plant your food cart anywhere you want, inside shopping malls, along office establishments or beside schools. So depending on what you sell, bring your food cart to where your target customers are situated.
Practise good food hygiene
The most important thing for a food business is hygiene and it is something that you can’t save on. Always ensure proper food sanitation and invest in high quality containers and packaging. Any case of a customer falling ill because of eating your food will cause serious damage to your brand reputation, so you would want to avoid that in any way possible.
Design to entice
As a new brand, you need to rely on eye-catching designs to attract customers. For the food industry, vivid hues of red, yellow and orange tend to be the recommended choice of colours. Also make sure your logo is easily recognisable while your food menu should be easy on the eyes.
If possible, share your initial designs to your family and friends to get first hand feedback and suggestions on how to improve it.
Priced to sell, not kill
Always conduct research to get a general sense of the pricing of the food you intend to sell. Your goal is to set the most affordable price for customers, but still make reasonable profits and it should not be more expensive than your competitors. Bare minimum is to at least be on par with them on pricing.
Majority of customers value good service and it goes a long way. Serving good food is one half to success and the other half is service. Most customers will not patronise your food cart again if you are rude to them, or the quality of service is extremely poor.
What are the legal requirements to start a food cart business
In order to run your food cart business legally, you will need to apply for several licences and permits.
- Register your business entity with the Department of Trade and Industry (DTI)
- Register your food cart or truck
- Obtain a Mayor’s permit
- Obtain a sanitation permit from the Department of Health
- Get clearance from the Bureau of Fire Protection
Apart from permits and licence, your food cart business needs to comply with food safety regulations, which are administered by the Food and Drug Administration. Always ensure your food cart meets all relevant food safety standards, and you may need to obtain additional permits or licences to operate your business in compliance with these regulations.
Food cart business in the Philippines summary & takeaway
Starting a food cart business in the Philippines is a relatively straightforward process and requires obtaining a Mayor’s Permit. The business can either be a family-owned operation or a franchise, and it is important to decide which option is best based on individual goals and needs.
Franchising another food company can be very helpful at the initial stage as they already have their own branding and following. On the other hand, if you want to have more control over your food cart business, starting your own will be a better choice.
But no matter which business type you choose, your food cart business must always adhere to food safety regulations and obtain all necessary permits and licences.
Common questions about food cart business
What are the types of food cart businesses in the Philippines?
There are two types of food cart businesses in the Philippines: a family-owned operation where you rent or purchase a mobile cart to run the business, or a franchise from a brand to sell their food.
How do I decide between starting my own food cart business or obtaining a franchise?
The decision between starting your own food cart business or obtaining a franchise will depend on your goals and needs. Franchising can be more costly and will require additional fees, but it can also save time on branding and recipe development.
Starting your own food cart business can be more affordable in the long run, but it requires building the business from scratch, including coming up with a business name and finding suppliers and staff to run your business.
What are the important considerations when starting a food cart business in the Philippines?
Important considerations when starting a food cart business in the Philippines include obtaining any necessary permits or licences such as a Mayor’s Permit and adhering to food safety regulations. It is also important to create a comprehensive business plan to visualise the overall strategy. Always start with one product, provide excellent customer service and choose a strategic location are also important considerations.