It feels like anywhere you eat now-a-days, you find a tip jar. Historically, people would tip their server a customary 10% at a sit-down restaurant or for services like a ride in a taxi. Today, you’ll find find the tip jar front and center ever where from coffee shop chains like Starbucks to Subway restaurants. Which leads us to the question… With the continued acceptance and expectation of a tip jar, why not accept tips on your food truck too?
According to TripAdvisor.com’s Tipping Etiquette guide for the United States, a “good tip” should be 20% of the total bill for a server at a restaurant, with exceptional service being compensated at 25%. Of course there is much debate over what represents a good tip and who should receive them.
Cash tips.
The Case For Accepting Tips on Your Truck
From an income standpoint, adding a tip jar will increase your overall profits. There is no cost to adding a tip jar so all of that additional income goes straight to the bottom line. If you do not need to hire employees to operate the vehicle, you get to keep 100% of the tips as well. If you do have employees, tips can be a nice incentive to provide great customer service and help retain staff since they will ultimately make more.
The other interesting thing is that many customers will expect to tip you when dining at your truck or trailer. This makes sense because you are operating a restaurant on wheels. You shouldn’t expect to receive a whopping 20% on average that some etiquette guide recommends, but even a smaller percentage can lead to notable profits over the course of a year.
On the conservative side, imagine that you were able to collect a 5% tip on average from each customer bill. This is a very realistic expectation if the collection jar is located in a prominent area on the truck (there are also some POS systems that allow you to include tips within a special field of their payment system). To keep the math simple, if you did only $100,000 in total sales over the course of an entire year, you would get around $5,000 in tipped wages over that 12 month period. Keep in mind this is all income that you didn’t have any expenses for.
Do you accept tips?
Should You Split Tips on a Food Truck?
When it comes to splitting tips on your food truck, there’s no one-size-fits-all approach. However, there are several popular methods that have proven successful for many operators:
The Equal Split Method
Many food truck owners opt for an equal split among working staff members. This approach is straightforward and promotes team unity. For example, if your truck makes $100 in tips during a shift with four workers (including yourself), each person would receive $25. This method works particularly well when all team members contribute equally to service and food preparation.
The Role-Based Split
Some trucks prefer to split tips based on roles and responsibilities. A common breakdown might look like:
- Front window/customer service: 60% of tips
- Kitchen staff: 40% of tips
This acknowledges that while customer service staff directly interact with customers, kitchen staff are equally essential to the operation’s success. If you want split tips without doing the math yourself, calculator websites like BackofNapkin.co can help you split tips evenly multiple employees with different roles or that work different numbers of hours.
Should Owners Take a Cut of Tips?
This is one of the most debated topics in food truck tip management. Here’s what you should consider:
When It’s Acceptable for Owners to Take a Share of Tips:
- If you’re working regular shifts alongside your employees.
- When you’re directly involved in customer service.
- If you’re the only one operating the truck.
- During training periods when you’re actively teaching new employees.
When Owners Should Skip Tips:
- If you’re mainly handling administrative tasks.
- When you have a full staff handling operations.
- If you only occasionally step in to help or aren’t on-site for an event.
- When you’re already taking a salary or owner’s draw.
The key is transparency. Whatever you decide, make sure your employees understand the policy from day one. Many successful food truck owners choose to forgo tips entirely, viewing them as an additional incentive for their staff.
The Financial Impact of Tips on Family-Run Food Trucks
Let’s dive deeper into how tips can significantly boost your family-run food truck’s profitability. For example, if your truck operates 5 days a week and averages $400 in daily sales, your annual revenue would be around $104,000 (assuming 52 weeks of operation). Even with a modest average tip rate of 7%, this adds up to $7,280 in additional annual income – all without any extra overhead costs or inventory expenses.
The math becomes even more interesting when you’re operating as a family unit. Let’s say you run a busy weekend truck with your spouse and teenage child, operating primarily at events and food truck parks. If you average $800 in sales per day over just Friday, Saturday, and Sunday, your annual revenue would be approximately $124,800.
Sharing a meal after a long shift.
With an average tip rate of 10% (which is common at events where people tend to tip more generously), you’re looking at an additional $12,480 in family income per year. Since this is a family operation, you can distribute these tips among family members, potentially providing tax advantages depending on your business structure (though you should always consult with a tax professional about your specific situation).
Breaking Down the Numbers:
To put this in perspective, here’s what tips could add to your revenue in different scenarios:
Small Family Operation (Weekend Only):
- Annual Sales: $124,800 (3 days/week)
- Average Tip Rate: 10%
- Additional Annual Income: $12,480
Medium Family Operation (5 Days/Week):
- Annual Sales: $208,000 (5 days/week)
- Average Tip Rate: 8%
- Additional Annual Income: $16,640
Busy Family Operation (6 Days/Week):
- Annual Sales: $312,000 (6 days/week)
- Average Tip Rate: 7%
- Additional Annual Income: $21,840
Keep in mind that these figures assume consistent operation throughout the year. Many food trucks see seasonal fluctuations, with higher sales (and typically higher tip percentages) during peak seasons and events. During busy periods like summer festivals or holiday markets, tip rates can sometimes surge to 15-20%, providing significant boosts to your family’s income during these peak times. This additional income stream can help offset slower periods or contribute to your business’s expansion plans.
A Couple Things to Keep in Mind With Tipping
If you do decide to accept tips on your truck, you should not make customer tips an expectation among employees or for yourself. One horror story that became a popular story back in 2013 was of an employee that shamed a customer on Twitter (now X) for not tipping after making a $170 order off of the truck. This is the kind of entitlement employee culture you do not want on your food truck and could cost you future business.
Modern Tipping Solutions
Today’s food trucks have more options than just a tip jar. Consider implementing:
- Digital POS systems with built-in tipping options. POS systems like Square let you split tips automatically.
- Tablet-based checkout systems with preset tip percentages
- Combined cash/digital tipping solutions
These modern solutions often lead to higher tip averages since customers can easily select a percentage rather than calculating it manually.
Creating a Positive Tipping Culture
The key to successful tipping on your food truck is creating the right culture. Here are some best practices:
- Train staff to provide excellent service regardless of tips
- Keep tip collection subtle and professional
- Consider posting a small “Tips Appreciated” sign rather than anything more aggressive
- Never discuss tips with customers unless they specifically ask about your policy
- Regularly review and adjust your tip distribution system based on feedback
Finally, you do not want to make customers feel like they need to tip. The goal of your food truck should be to leave customers feeling happy and satisfied, not feeling bad because they didn’t leave a big enough tip for your employees.
Remember, tips should be viewed as a bonus, not an expectation. Focus on providing great food and service, and the tips will naturally follow. Do you think that food trucks should accept tips? We’d love to read your thoughts in the comments section below.
