Financing

Food Trucks Are Stale. Line Up for Food Scooters


A gourmet sandwich truck in Van Nuys, Calif.

Photograph by Los Angeles Daily News/Zuma Press

A gourmet sandwich truck in Van Nuys, Calif.

Food trucks helped make street vending a $1.5 billion industry in the U.S. last year, according to research firm IBISWorld. Plenty of aspiring entrepreneurs are salivating. But getting a full-service food truck rolling can cost upwards of $100,000, says Howard Leonhardt, who recently launched a venture to sell food trikes and scooters for a fraction of that price.

A Los Angeles-based serial entrepreneur and would-be lieutenant governor of California, Leonhardt hatched the idea for Food Trikes & Scooters in September, when he stumbled onto a vendor selling bagels and coffee from a customized scooter. Leonhardt imported electrified three-wheelers that were originally mass produced for Asian markets and outfitted them for food service at an East Los Angeles factory. Then he teamed up with mobile technology firm InVenture, which developed an accounting app for mobile phones, and micro-lender Kiva—and hatched a plan.

While he hasn’t completed any sales yet, this is the idea: For a $500 down payment, Leonhardt and Kiva provide cheap financing for the retrofitted scooters, the fanciest of which retails for about $6,500. Entrepreneurs, including those with poor or no credit, agree to buy and sell food prepared by the company. (Leonhardt says he’s contracting to use space in local commercial kitchens from 2 a.m. to 4 a.m. to get ready for the morning crowd. “Burritos are going to be the big seller,” he says.)

The smartphone app helps the entrepreneurs manage their business, and helps Leonhardt’s company provide mentorship. Leonhardt plans to recruit from a program he runs with local Boys & Girls Clubs, and if one of his inexperienced entrepreneurs is struggling, the app can inform Food Trikes & Scooters.

While Leonhardt and his partners were putting together those plans, a funny thing happened. A local restaurant heard about the trikes and reached out: It didn’t want the pre-made food or the accounting software; it just wanted the vehicle. Next, Leonhardt got a call from a Chick-fil-A franchise in Atlanta. He quoted a price and, a little while later, heard from company headquarters. What would it cost to buy 2,100 retrofitted scooters?

Regardless of whether those deals go through, Leonhardt says he wants the business to be a social enterprise primarily. “This is a way to give kids from the inner city who didn’t have the opportunity to go to college the chance to be an entrepreneur,” he says.

Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.

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