Early signs of success for Mark's Carts: vegan food vendor achieves profitability

It’s been nearly two months since the debut of Mark’s Carts, a collection of seven outdoor food carts off East Washington Street in downtown Ann Arbor, and The Lunch Room owners Phillis Engelbert and Joel Panozzo said business is steady and profits are high at the cart.

Their success serves as an early sign that buzz about Mark's Carts may translate into a sustainable business model for local food vendors.

“After five weeks we were able to pay ourselves back for the money we invested,” Engelbert said. “Now we’re taking draws and collecting paychecks.”

With menu items like a barbeque tofu sandwich, tangy Thai slaw and vegan Caesar salad, The Lunch Room pair seems to have struck a chord with Ann Arborites.

After personally investing $7,500 and raising $10,500 with the online funding platform Kickstarter, Engelbert said that business has remained steady each week and profits have already exceeded their own investment.

“Business fluctuates a little with the weather, but it has been very steady,” Engelbert said. “Our daily sales average hovers around the same amount and hasn’t gone up or down more than $10 during a week.”

Although some of the menu items rotate, Engelbert said the cart’s baked goods and barbeque tofu sandwich have been the biggest sellers. She said The Lunch Room has sold more than 1,200 orders of the sandwich, leading to weekly tofu orders coming in at 100 pounds.

Mark Hodesh, owner of Mark’s Carts, said that the success of The Lunch Room seems to be representative of the courtyard as a whole.

“The concept is working,” he said. “I think everyone knows what they are about and they are getting their bills paid. I think the carts are doing some very good business.”

The venture began on May 9, when Hodesh, also the owner of Downtown Home and Garden in Ann Arbor, opened Mark’s Carts on a 2,700-square-foot parcel of land behind his South Ashley Street retail location.

There are currently seven carts in the courtyard, with specialties ranging from PB&J pierogies to chorizo corn dogs. Hodesh said he may eventually rent space to up to 10 independently owned food cart operators.

For next-door-neighbors and vegan foodies Engelbert and Panozzo, the opportunity to offer fresh, quick and inexpensive vegan food in downtown Ann Arbor was too good to pass up when they heard about Mark’s Carts.

The duo had already been hosting private group meals in various retail locations in Ann Arbor and Ypsilanti, which they started offering in October 2010.

Since applying to be food vendors in Mark’s Carts, Engelbert and Panozzo have taken on many roles. From event organizers to gardeners and chefs, the two said they have enjoyed developing a presence in Ann Arbor.

“Part of building our business is the community aspect,” Engelbert said. “I’ve gotten to know so many people in Ann Arbor because of the cart, and now we know a lot of our customers by name.”

And because Panozzo said connecting with people is their “highest priority,” he said they have found social media websites like Facebook and Twitter to be useful tools in helping to drive business.

On The Lunch Room’s Facebook and Twitter pages, Engelbert and Panozzo engage their followers by offering contests with free goodies as prizes.

A recent contest offered, “Say ‘I love The Lunch Room’ in any language besides English and get a free goodie!”

While the two have learned how to fun with their business, Panozzo said the work load as been “intense,” and they have no plans to slow down yet. He said that they may eventually hire more employees to help operate the cart.

“Right now, we’re focusing on trying to run the hours that we have now,” Panozzo said. “We have really long days, but that’s part of opening a small business.”

As for future plans for The Lunch Room, Engelbert said they’ll likely build up some sort of catering business when Mark’s Carts closes in November.

Although they have been asked about opening a second cart location and packaging their baked goods for other Ann Arbor businesses, Engelbert said her only plan is to be open to new ideas.

“Right now, this is kind of a handful,” Engelbert said. “But Joel and I are both big proponents of being open and then the right thing happens. That’s how The Lunch Room came about.”