Señor Sisig Hungry for Growth in Food Truck Industry Case Strategy Analysis You will be required to prepare written analyses of the Señor Sisig cases.No ou

Señor Sisig Hungry for Growth in Food Truck Industry Case Strategy Analysis You will be required to prepare written analyses of the Señor Sisig cases.No outside research on this company or its industry should be conducted as part of this assignment.Information taken from the case should be undertaken with enough interpretation & evaluation to develop a comprehensive analysis.

Outstanding papers will include the following characteristics:

1. exceptional coverage of case questions 2. clearly demonstrated logic and rationale, 3. discussion supported by appropriate analytical, self-developed, exhibits, 4. arguments that utilized quantitative analysis to support conclusions, 5. demonstrated understanding and appropriate application of strategic business frameworks & concepts, 6. clearly delineated decision criteria, 7. recommendations logically extrapolated from findings and 8. remarkably well organized and written.

Each of these written reports should be a maximum of 1800 words in length (use Times New Roman 12-point font, double-spaced, 1-inch margins) plus analytical exhibits.Note that analytical exhibits refer to support materials that you prepare (not exhibits from the case).

Exhibits should be numbered and titled.Exhibits should be referred to in numerical order. Exhibits should not be generic in nature.Please place your name and word count of the text portion in the upper left on the first page (no other cover page should be used).Writing mechanics and structure are expected to be at a high level. (Hints: Business writing tends toward short, precise sentences.Paragraphs are highly focused.)You should use a grammar and spell checker.This case analysis is worth 20% of your grade.Papers must be submitted on TurnItIn prior to class.Assignments noted as received after the beginning of class will be penalized.You should not attend class on the due date if you have not already submitted the assignment. Please have a paper or electronic copy available, if needed, for class discussion.There should be no collaboration or discussion of this assignment prior to class (other than that facilitated by the Professor).Further, be sure that your colleagues have completed these assignments before discussing the material with them.

CASE ATTACHED. Please add decision matrix, financial statements, and exhibits that show what strategies you took into consideration. For the exclusive use of F. GALVAO, 2019.
NA0441
Señor Sisig: Hungry for Growth
in the Food Truck Industry
Evan Kidera, Señor Sisig
Armand Gilinsky, Jr., Sonoma State University
Jeffrey P. Shay, Washington & Lee University
Sally Baack, San Francisco State University
I feel like we have done a great job in establishing who we are in the San Francisco
Bay Area food truck industry. I think we have built our brand, product, and
customer loyalty to a level that would be hard for rivals to match, at least from a
food truck standpoint.
My biggest concern is competition from a bricks-and-mortar restaurant. We have
seen other restaurants play around with our food concepts on their menu, but no one
has directly imitated our whole concept yet and it’s only a matter of time before this
happens.
There is a definite opportunity to open a bricks-and-mortar with our concept and
we would have a huge advantage if we could do it before someone else does. We have
the brand and product already; we just need to find a location and the capital to
make it happen. I don’t want to let this opportunity pass by and become a threat
to our business.
— Evan Kidera, founder, Co-owner, and CEO of Señor Sisig, in 2013.1
On a brisk evening in late September 2013, Señor Sisig’s founder, co-owner and chief
executive officer (CEO) Evan Kidera arrived at a company “viewing party”, held at a
popular food truck park in San Francisco. Hundreds of friends, family and followers
gathered in a large barn in the middle of the park to watch Señor Sisig be featured on
one of the Food Network’s top-rated television shows, Diners, Drive-ins, and Dives.2
Excitement was in the air as the group of people hurried to find their positions in front
of one of the big screen televisions. As the TV show began, Kidera stepped out of the
barn and took a moment to reflect on what his business had accomplished and what
national media attention might mean for the Señor Sisig operation. He knew that he
had some critical decisions to make in the near future about the direction of the
company.
—————————-Copyright © 2017 by Evan Kidera, Armand Gilinsky, Jr., Jeffrey P. Shay, Sally Baack, and the Case Research
Journal. This case was prepared by Evan Kidera, Professor Armand Gilinsky, Jr., Sonoma State University,
Professor Jeffrey P. Shay, Washington & Lee University, and Professor Sally Baack, San Francisco State
University as a basis for class discussion, not to illustrate effective or ineffective handling of an administrative
situation. The authors would like to thank John Lawrence and the anonymous reviewers of the Case Research
Journal for their insightful comments on the drafts of this case. This case was originally presented at the 2014
North American Case Research Association conference in Austin, TX.
Señor Sisig: Hungry for Growth in the Food Truck Industry
1
This document is authorized for use only by FELIPE GALVAO in Strategy in Action Summer 2019-1 taught by WILLIAM CRITTENDEN, Northeastern University from May 2019 to Nov 2019.
For the exclusive use of F. GALVAO, 2019.
Señor Sisig’s business produced and sold Filipino fusion food from a food truck.
Since its conception in 2010, the business experienced rapid growth in sales and brand
awareness. It won the “Best Food Truck” award three years in a row from SF Weekly,
and was considered one of the most iconic food trucks in the Bay Area, with customers
waiting in line for up to an hour to try its food.3 Despite this early success, Kidera
believed the feature on the Food Network would raise the brand awareness of Señor
Sisig to a new level and create pressure to take advantage of opportunities to grow in
the near future.
While he listened to the loud cheers and applause from the viewers in the barn,
Kidera became anxious about the opportunities and challenges Señor Sisig faced
moving forward. From the time of its founding, Señor Sisig grew from one food truck
to three food trucks, however, the business infrastructure remained relatively the same.
Over the past few months, Kidera had corresponded with a few commercial realtors
about prospective locations to open a bricks-and-mortar restaurant. He’d also
considered a proposal from a commercial food packager to package Señor Sisig’s
product to sell in retail stores like Costco and Whole Foods. Kidera believed the timing
was perfect to move forward with one or more of these opportunities, however, he
was worried that Señor Sisig was growing too fast and might not retain its
distinctiveness if more locations were added or new formats were developed. His
partner and friend, Payumo, had said, “We don’t want to take too big of a step… we
want to take a baby big step.” Mindful of the need for capital to bring any of these
opportunities to fruition, Kidera did not want to lose control of his company, in which
he owned a 70 percent stake. Kidera wondered aloud: “Should we pursue any of these
opportunities to grow the business? What factors should be taken into account in
choosing among these options? What internal changes might be needed to position us
to take advantage of these opportunities?”
THE FOOD TRUCK SEGMENT
According to two food industry analysts for IBISWorld, the food truck segment not
only grew in number from 2009 to 2014, representing a five-year sector revenue growth
rate of 12.5 percent, but also became one of the best-performing segments in the
broader food-service sector, reaching $803.8 million in revenues, $70.7 million in
profits, and 3,915 enterprises by the end of 2014. Changes in consumer preferences
to favor unique, gourmet cuisine at budget-conscious prices in cities such as Portland
(OR), Los Angeles, and Austin, was said to be driving sector growth. IBISWorld
estimated that the industry would continue to grow by 4.2 percent annually from 2014
to 2019. See Table 1 for IBISWorld’s forecasts for the food truck segment from 20142019.
Table 1 — Food Truck Industry Forecast, 2014-20194
Revenue
Growth
# of
Year
$ millions
rate, %
Enterprises
2014
803.8
3,915
2015
856.7
3.5
4,042
2016
889.5
3.8
4,102
2017
926.9
4.2
4,207
2018
955.9
3.1
4,222
2019
975.7
2.1
4,139
2
Case Research Journal  Volume 37  Issue 1  Winter 2017
This document is authorized for use only by FELIPE GALVAO in Strategy in Action Summer 2019-1 taught by WILLIAM CRITTENDEN, Northeastern University from May 2019 to Nov 2019.
For the exclusive use of F. GALVAO, 2019.
Most food trucks were owner-operated and did not employ any workers. The top
four food truck companies were reported by IBISWorld to account for less than 5.0
percent of industry revenue in 2014. IBISWorld also forecasted that the average firm
would earn a profit margin of 9.0 percent in 2015, an increase from 7.6 percent in 2010
and 8.8 percent in 2014. See Table 2 for IBISWorld’s comparisons of costs and profits
in the food industry as a whole versus the food truck segment for the calendar year
2014.
Table 2 — Cost and Profit Comparisons, 20145
Food Food Truck
Industry
Segment
Wages
22.2
37.5
Purchases
39.1
36.0
Depreciation
4.2
1.8
Marketing
2.8
1.8
Rent & utilities
7.5
8.9
Other
17.1
5.6
Profit margin
7.1
8.8
In regards to segmentation within the food truck sector, the IBISWorld analysts
estimated that 38.3 percent of all food trucks across the U.S. specialized in American
cuisine, 24.6 percent Latin American, 18.1 percent Asian and Middle Eastern, 9.4
percent desserts, and 9.6 percent other items. By 2014, Hapa SF, a San Francisco-based
food truck, had become a mainstay in the city with its organic Filipino offerings such
as lumpia and adobo. Renée Frojo, a reporter for the San Francisco Business Times,
observed the food truck scene in that city:
Whatever the reason, a low barrier to entry has allowed hundreds of
entrepreneurs to jump into the driver’s seat in the industry. But with long
hours, steep competition, a long legislative process and unproven success
rates, some are beginning to wonder if the payoff is worth the struggle. If
done right, owning a food truck can be a fairly lucrative gig for some owners.
According to Off the Grid’s Matthew Cohen, most trucks are making annual
revenue of around $250,000 to $500,000, while the top 25 percent bring in
upwards of $1 million. But at the end of a food truck’s very long day, Cohen
said, making money isn’t the biggest reason people get into the industry. “It’s
the passion for food.”6
Numerous challenges still lay ahead for the food truck segment. Despite strong
industry-wide performance, food truck operators were restricted by municipal
regulations, increased competition, and low profit margins. Laws governing food
trucks differed between cities, with most specifying the hours during which food trucks
could operate and the distance they needed to be from the nearest bricks-and-mortar
restaurant. As food trucks competed directly with the broader food service sector,
some bricks-and-mortar establishments lobbied against the entry of food truck
operators. In some cities, particularly those located in the Southwestern states of the
U.S., the food truck segment had begun to reach a saturation point, resulting in lower
profit margins for some operators.
Señor Sisig: Hungry for Growth in the Food Truck Industry
3
This document is authorized for use only by FELIPE GALVAO in Strategy in Action Summer 2019-1 taught by WILLIAM CRITTENDEN, Northeastern University from May 2019 to Nov 2019.
For the exclusive use of F. GALVAO, 2019.
EVAN KIDERA
Kidera founded Señor Sisig in 2010. Kidera, then 27, grew up in a family of
entrepreneurs and chefs. His father had been a sushi chef working for other people,
but he had always talked about opening his own restaurant – which he ultimately did.
After graduating college with a B.A. in Entrepreneurial Small Business Management,
he took an entry-level warehouse management position with the University of
California San Francisco (UCSF). After three years with UCSF he was frustrated with
the lack of opportunity to grow within the organization. He decided to pursue an MBA,
with the intention of furthering his career as a business manager. He recalled:
I wanted more responsibility and freedom to make important business
decisions. Growing up, my father was a huge influence on me. I saw the
respect people gave him as an entrepreneur and the freedom he had being his
own boss…I wanted that. I was extremely motivated to make a difference
somewhere or somehow and I believed obtaining a MBA would give me the
best chance of obtaining a position where I could make that difference. After
a year in the program, it became clear that my personality would always be
frustrated as an employee; I had to be the boss.
Kidera left his job at UCSF in June of 2008 to focus on school and travel. Some
months later, while visiting a friend in Los Angeles, he drove past a taco truck called
Kogi that sold “Korean barbecue tacos”, which was all the rage on Twitter and other
social media. He immediately pulled over to take a closer look. He remembered:
It blew my mind that there were 50 plus people standing in line for a
“taco truck” at 5pm. I never had seen anything like it. In my mind
“taco trucks” were a dirty after-hours food option for drunk people. I
asked a lady in line what the big deal was, she told me “it’s the best
thing I have ever ate, best invention ever”. All I could think about for
the rest of my trip was if this concept was something that could work
back home in San Francisco.
Upon his return to San Francisco, Kidera immediately focused all his time and
energy towards researching the mobile food facility (MFF) industry. He laughed: “the
city of San Francisco knew very little about this industry and getting information and
answers from them was like asking an old dog to do new tricks. It was frustrating, but
I knew that if I could teach the old dog a new trick, everyone would want to see it.”
A NEW CONCEPT
In November 2009, Kidera decided to bring a partner into the business. Gil Payumo,
a Filipino-American and long-time friend, was an experienced chef and interested in
owning his own business. Payumo’s parents owned an Asian grocery store, and after
school Payumo was often in the store helping out his family business. Payumo’s uncle
owned a Filipino restaurant in San Francisco. Payumo had always been around that
business as a child, helping out on weekends. Payumo eventually went to the Culinary
Academy Cordon Bleu program for two years. He had established a stable, successful
career moving up in his chef’s career working in various restaurants and hotels.
Although he felt that was in a good position career-wise, he didn’t feel completely
fulfilled working for others.
4
Case Research Journal  Volume 37  Issue 1  Winter 2017
This document is authorized for use only by FELIPE GALVAO in Strategy in Action Summer 2019-1 taught by WILLIAM CRITTENDEN, Northeastern University from May 2019 to Nov 2019.
For the exclusive use of F. GALVAO, 2019.
The two men found they had similar interests and complementary talents. Just as
important, Kidera trusted Payumo and felt they shared the same vision. Kidera recalled:
We both wanted to work for ourselves and we both shared a common respect
for food. At the same time, I didn’t want to be a chef and Gil didn’t want to
be a business manager, so together we would make one heck of a team. Gil
would man the grill and I would steer the wheel.
Kidera felt it was important to give Payumo ownership in the business to keep him
motivated. They agreed to share ownership of the new company, with an ownership
split of 70/30 for Kidera and Payumo, respectively. This split was based predominately
on the start-up capital both men contributed. Kidera was not interested in dividing the
business ownership 50/50. Kidera explained:
Growing up, my father always told me to never go into business with someone
else. He had a couple of bad experiences with partnerships and didn’t want
me to follow the same mistakes. I remember one time as a kid, driving around
the city looking for some guy because he owed my Dad money. Dad said
never, ever, ever go into a partnership with someone. It was hard for me start
a partnership because of this, but I felt that we had a better chance to succeed
together. Plus I had seen how Gil lived his life and had approached his career,
and I knew he was reliable. I looked back at my father’s mistakes and believed
that he failed to define the terms of ownership. I felt a 70/30 ownership split
would give me more control over the vision and direction of the business.
Our agreement defined how any situation that occurred would be handled to
prevent any disagreements in the future.
Payumo recalled telling Kidera, “Evan, you’re the guy with the MBA, you run the
business side, you make the business decisions. I’m the chef, so I’ll run the kitchen and
make the food decisions.” The founders incorporated their business in June 2010,
selecting the name Señor Sisig. The name represented the Filipino-Mexican fusion
concept of its food. Señor in Spanish means “sir”, and Sisig is a traditional Filipino dish
that was used in most of its menu items (see Exhibit 1). Kidera explained the logic
behind the concept:
We felt that Filipino food was being neglected and saw it as an opportunity.
When you think of Asian food, you think of Japanese, Chinese, Thai, Korean,
Vietnamese, not Filipino. We felt that people in general were not fully
comfortable with the idea of Filipino food yet and that they would be more
interested and open to try Filipino food if it was in a familiar form…like a
taco or burrito.
We used Gil’s family secret Sisig recipe as our core ingredient. Primary
ingredients (meats) were marinated for 48 hours and hand chopped before
they were seasoned a second time to become extremely flavorful. We were
confident that we could initially attract the large population of Filipinos in the
Bay Area with this concept and hoped that the word would spread so that
more Non-Filipinos would try our food as well. We wanted to be a pioneer
of Filipino food and make it something new and fun for people to experience.
Exhibit 2 shows the philosophy, history, and timeline of Señor Sisig’s growth as a MFF
venture.
Señor Sisig: Hungry for Growth in the Food Truck Industry
5
This document is authorized for use only by FELIPE GALVAO in Strategy in Action Summer 2019-1 taught by WILLIAM CRITTENDEN, Northeastern University from May 2019 to Nov 2019.
For the exclusive use of F. GALVAO, 2019.
EARLY DAYS IN SAN FRANCISCO
In May of 2010, Kidera met a man named Matthew Cohen. At the time, Cohen was in
the process of starting a business called Off The Grid Services, LLC (OTG). The OTG
concept provided food truck businesses, like Señor Sisig, a location to sell their food
in San Francisco. Cohen realized that more individuals were looking to enter the
industry, however, the laws in San Francisco drastically limited the opportunities for a
MFF to sell. Cohen recalled:
In 2008 we started to see innovative “gourmet” food truck concepts arrive in
areas like Los Angeles. You can point to the recession as the reason for this.
Gourmet chefs and business managers were losing their jobs and looking for
opportunities to make money somehow. The start-up costs of a food truck
are relatively low compared to that of a restaurant and the demand for good
“gourmet” food at a reasonable price was high, because people couldn’t afford
to go to the high-end sit down restaurants anymore. It made perfect sense.
The same “gourmet” burger that cost $25 at a restaurant could now be
purchased for $10 at a food truck. It was a win-win situation for business
owners and consumers. 7
Prior to establishing OTG, Cohen envisioned opening his own food truck business
but was turned away after he realized that the laws and regulations were out of date
and that it would be extremely hard to enter the industry. In June of 2010, OTG opened
its first market at the Fort Mason Center in San Francisco, which was where Señor
Sisig made its grand opening. OTG made money by charging vendors a $50 base fee
plus 10% of its gross sales during each service. According to Cohen, since its
conception, OTG had grown to 36 markets around the Bay Area by 2013, OTG
planned to have 60 markets opened by 2014. Other companies had also started similar
“food truck markets” with similar pricing structures in San Francisco, but on a smaller
scale compared with OTG.
In 2011, San Francisco updated the laws and regulations for an MFF applying for
a public permit to sell. The new ordinance allowed an MFF to apply for any location
that was not within 300 feet of similar or “like” food.8 The application and processing
fee depended on the location and ranged from $2,000 – $3,000. Señor Sisig took
immediate advantage of the changes in the law and applied for permits in areas with
high foot traffic in San Francisco. Kidera said emphatically:
This was a game changer for us. Prior to the changes in the law, we were 100%
dependent on OTG markets to operate. That limited our growth because
there were only so many markets we could be a part of. It was also costly
paying a 10 percent fee on everything we sold. The night before the law
change went into effect, I slept outside the application office with 20 other
business owners to assure we got the permits we were applying for. They were
taking applications on a first-come first-serve basis, and we were approved for
three permits in extremely profitable areas in San Francisco. This allowed us
to buy our second food truck and expand the business.
Owing to the growth of these “food truck markets” and the changes in MFF laws
and regulations, the number of new food truck entrants grew exponentially. In 2009,
there were approximately 10 to 15 food trucks permitted to operate in San Fran…
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