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Energy Downturn Means More Business Investment, Competition Coming For H&8th?

oil pump jack
Paul Lowry
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Flickr

There’s an interesting side effect of the downturn in energy prices that started late last year – a strong trend in business sales.

After being laid off from the oil and gas sector, many former employees look to something completely different. In a lot of cases they have savings, plus a big severance package, and The Journal Record’s managing editor Adam Brooks says a business can be a good investment, and it’s a good time to buy.

“In June, there were 23 percent more sales listing for Oklahoma City businesses than a year ago,” Brooks said. “And Oklahoma City buyers are actually paying less than the national average when you look at things like the sales price compared to revenue for the business.”

It seems almost counterintuitive – starting a business without a source of income. But broker Larry Hughes with the Hughes Group told The Journal Record’s Brian Brus there’s also a generational effect, as many baby boomer clients are looking toward the next phase of their life:

“A majority of the businesses are owned by guys in the age group of mid-50s up into their 70s, and a lot of them are thinking about selling out for retirement,” Hughes said. “The next-generation numbers much less, and we’re coming into the time frame where we’ll see that difference play out. It’s going to become a buyer’s market.” Hughes said oil-field supply businesses have slowed down with rising oil prices, but otherwise brokerage deals in central Oklahoma are strong. Of the 95 active business BizBuySell.com listings in Oklahoma City by the end of the second quarter, 35 were identified in the services sector and 33 as retail other than restaurants.

Rick Vick hands out an order from his Galley Soul Food & More truck.
Credit Brent Fuchs / The Journal Record
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The Journal Record
Rick Vick hands out an order from his Galley Soul Food & More truck.

Food Truck Fight

Looking at much smaller, more mobile businesses, the H&8th Night Market at the intersection of NW 8th Street and Hudson Ave. in Midtown could see a challenge to its dominance of Oklahoma City’s Friday night entertainment.

Oklahoma City restaurant operator Rick Vick wants to start what he’s calling “Eats on Harvey & 8th,” a similar festival a block to the east, on the same night.

Last week he asked the City Council to take a more active role in ensuring market fairness.

Watch the July 21, 2015 Oklahoma City Council meeting. Vick's presentation begins at about the 10:29 mark.

“His big complaint seems to be that there's a lack of transparency in who gets into the H&8th Night Market for the food truck festival,” Brooks says. “He says there's too many legacy trucks, and only room for 10 rotating each month. And he's not really happy about how those slots are doled out, either.”

Currently about 20 of those slots are reserved for regular attendees, with the remaining 10 distributed via a lottery system. During the July 21 meeting, Vick told councilmembers the H&8th organizers’ current lottery favors certain vendors, and lacks transparency, according toThe Journal Record:

Mayor Mick Cornett asked city staff to look into the matter. While City Hall’s influence is limited in how organizers run special events, ultimately it’s up to council members to approve permits based on their public benefit. H&8th gathers March through October, much more frequently than an annual arts festival, for example, so Vick said he would expect a responsibility to the restaurant community to avoid creating the appearance of a monopoly on public space. On Tuesday [July 21], the council approved H&8th permits for its final Fridays of this year: July 31, Aug. 28, Sept. 25 and Oct. 30. Organizers also asked for slightly expanded space and earlier street closures so the events can begin at 6 p.m.

Vick offered a few suggestions during the city council meeting, like holding the lottery at the monthly meeting of the Oklahoma Independent Food Truck Association. He says that would allow owners and operators to see the process take place. He also told the City Council he’d like to see more variety at the festival.

“I would suggest that upon being selected for the H&8th event, the approximately 30 trucks selected would be ineligible for the following month,” Vick said. “This would allow for a fair and equitable opportunity for many Oklahoma small businesses to generate revenue at one of the most premier food truck events in the state.”

Brooks said one of H&8th’s founders, Brian Bergman, told the paper the festival wants to show loyalty to vendors who have been with the festival since its inception in 2011.

“They get 30,000 people at this event now, but the first one only drew 50 people, so they like to support those,” Brooks said. “Vick does plan to ask the city council for a permit for his own festival. He wants to do it on the same night, about a block to the east. He says he's got 10 food trucks that are committed to it, so we may have a little competition on the streets of Oklahoma City”

The Business Intelligence Report is a collaborative news project between KGOU and The Journal Record.

As a community-supported news organization, KGOU relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.

The Journal Record is a multi-faceted media company specializing in business, legislative and legal news. Print and online content is available via subscription.

Brian Hardzinski is from Flower Mound, Texas and a graduate of the University of Oklahoma. He began his career at KGOU as a student intern, joining KGOU full time in 2009 as Operations and Public Service Announcement Director. He began regularly hosting Morning Edition in 2014, and became the station's first Digital News Editor in 2015-16. Brian’s work at KGOU has been honored by Public Radio News Directors Incorporated (PRNDI), the Oklahoma Association of Broadcasters, the Oklahoma Associated Press Broadcasters, and local and regional chapters of the Society of Professional Journalists. Brian enjoys competing in triathlons, distance running, playing tennis, and entertaining his rambunctious Boston Terrier, Bucky.
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