Saigon Petes Case Study

1685 Words 7 Pages
Saigon Pete’s aims to capitalize on the food truck industry that is still growing, albeit at a slower pace than in the past. The goal is to expand while maintaining profit margins and the high quality service that our customers are accustomed to. The plan is to add another food truck to the existing fleet of three and possibly another route. The changes should result in an increase in revenues as well as profits within a two years. Saigon Pete’s is a chain of food trucks serving banh mi sandwiches and other Vietnamese cuisine in San Francisco, California. The food truck trend started around 2010 primarily with tacos and other Mexican food. Saigon Pete’s came onto the scene with a single food truck a few years later in 2012 and began …show more content…
The Uptown Route, the Midtown Route, and the Waterfront Route currently generates roughly $15,300 a week while employing five full time employees and eight part time employees. All …show more content…
At this moment in time, there are benefits to adding another truck. All three of the Saigon Pete’s trucks are profitable and collectively bring in about $780,000 a year. It’s true that adding another food truck would cannibalize sales from the other Saigon Pete’s trucks, but the gains will exceed the losses. Currently, when the trucks are positioned correctly, the trucks stay busy all day with customers waiting in line for more than 20 minutes. Adding another truck would alleviate the congestion at the other trucks, and present additional opportunities. The routes are all profitable and don’t need to change, so adding another truck would increase flexibility. It could be added to an existing route or it could even take it’s own route through other neighborhood or other nearby cities. Assuming another truck will make a conservative 85% of the average current truck, that would increase revenues by $221,000 a year. Even though the business is extremely profitable and the revenues are in line with the national averages, only one food truck should be added at this moment and there can be a reevaluation after a year (Myrick). After adding another truck, I propose you leave your managerial role and take over operations of the new truck. You have expressed interest in returning to the food and leaving the office, this

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