How to Open a Hot Dog Stand or Restaurant


Hot Dog Business

Table of Contents

Should I Open a Chain Franchise?

Choosing a Concept and a Menu

How to Plan a Menu

Location is Key

Licenses and Permits

Hot Dog Equipment

The hot dog is an American national dish, right up there with apple pie and the hamburger. It's a simple pleasure, one that's easy to enjoy and relatively easy to sell. Compared to other foodservice ventures, starting a hot dog restaurant or stand requires relatively little overhead, with most hot dog equipment of the countertop variety.

Of course, starting a hot dog concept requires a great deal of planning and preparation. Besides designing a menu and buying equipment, there's a good deal of red tape to cut through before you can legally open a business. Good planning is the single most-important factor in determining a restaurant's success. Before going any further, decide whether you want to open your own independent business or buy into a franchise.

Should I Open a Chain Franchise?

While a homegrown, do-it-yourself concept will let you define your own brand, design a customized menu, and truly be your own boss, opening a franchised store has its benefits, too. When you buy into a franchise, there are already expectations and guidelines in place, and you have the structure and support of the company to guide you.

The major barrier to many people who'd like to open a franchise is the amount of money it can take just to get started. Here is a comparison of the franchising fees, recurring royalty fees, and the average initial investment associated with some of the popular hot dog chains.

Franchise Initial FeeRoyalty FeeAverage Investment
Nathan's$30,0005.5%$276,360 - 1,071,360
Wienerschnitzel$6,600 - 32,0005%$546,400 - 1,356,000
Dave's The Doghouse$25,0006.5%$25,000 - 245,700
Dog Haus$35,0006%$251,785 - 442,439
All data from entrepreneur.com

The franchising fee is a one-time fee for joining the franchise. With it, you gain access to the franchisor's network of resources and support, as well as its name and reputation. This usually includes training opportunities, where you'll travel to the company's headquarters or they'll visit your site to train you and your employees to help get you started.

Once you get your business up and running, you'll be expected to pay the franchisor an ongoing royalty fee, which will equal about 5-6.5 percent of your store's total revenue. This is the price you pay to remain a franchisee. Some franchises might also require other fees like advertising fees, which pay for the benefits of the chain's marketing campaigns. If the franchise route sounds like the right one for you, skip ahead to the section on choosing a location. If you'd rather go it alone and start your own independent concept, read on.

Choosing a Concept and a Menu

The fun part of opening your own independent restaurant is in defining your concept and designing a menu. The first step is to choose your format. Do you want a simple cart that can be taken from event to event, or do you want to build or remodel a standalone, brick-and-mortar restaurant? That decision may be based solely on how much money and time you're willing to commit, though you should also consider where your customers are and how you can best reach them.

A cart can be started for a few thousand dollars and may only require work on the weekends, while a restaurant can require hundreds of thousands or even millions of dollars and will often consume every waking hour of your day. Obviously, carts allow you to be a bit more flexible, moving to where the customers are on a given day or at a particular time, provided you have the right permit and are allowed to sell in those locations.

Still, there's plenty to be said for the traditional brick-and-mortar operation, including that customers always know where it is. Additionally, there are typically fewer permits required for opening a stationary shop and they eliminate the daily struggle of determining if local codes allow you to operate in the spot you've picked out.[1]

Of course, you might opt to try for the best of both worlds by operating both a traditional outlet and a cart or food truck. Both restaurateurs and food truck operators have found considerable success with this type of duality, and many of those who have tried their hands in the food truck world now recommend having a plan beyond the street.[2] There are some clear opportunities from this option, including that your mobile operation can serve as advertising for you stationary one and can also reach customers where they are at times when they're not near your store.

As an example, you may have a store in an area that's busy through the week because of a large number of nearby businesses, but is dead on the weekends. Having a cart enables you to travel to customers during those down times. However, remember when you consider this type of split that you may be required to get the regular permits for each type of operation, which can add up to a lot of money and effort.

How to Plan a Menu

When you have decided on a format, you can get to work designing a menu. The hot dog is a simple product; once you choose which kind of frank and bun you want to offer, you've laid the foundation for the greater part of your menu. The beauty of the hot dog lies in its customization. It's really the toppings and condiments that provide its identity. Local and regional differences should play a major part in which of those you offer. Obviously ketchup, mustard, onions, and relish are the classic hot dog dressings, with chili and cheese the indispensable toppings.

Ask around and see what people in your area like on their dogs. Fortunately, condiments are among the most affordable food items and they're easy to prep and store, so do a little experimenting. Add some non-traditional offerings to your condiment bar and see what sticks - you might be surprised and you could kick off a new trend.

Speaking of condiments, the number different condiment dispensers available is more numerous than you might think. Of course, you may opt for the classic red and yellow squeeze bottles for ketchup and mustard, or you many consider pump dispensers that will dispense pouch and bag in box products. If you and your staff are dispensing the condiments, a portion-controlled pump can help maintain closer control of inventory by dispensing a precise amount each time.

To give your business a more gourmet feel, especially if you have the space and equipment to dedicate, consider offering a menu with custom dogs in different styles. Give each one a unique name and provide a mix of traditional combinations with experimental ingredients. Keep up with food trends and adapt your menu to stay on the culinary cutting edge.

Don't forget to offer drinks and side items as well. Of course hot dogs pair well with chips, but a relatively inexpensive fryer and some oil are all the supplies you need to cook up fresh, crispy fries. Profit margins with sides and drinks are higher than with the main products themselves, so find a way to encourage customers to order a complete meal, like offering good deals on combos.

Our final tip here: The good old-fashioned frank is favored by many, but don't forget to add some diversity to your menu with other bun-dwelling snacks, like bratwurst and chicken sausage. You may also consider offering vegetarian and gluten-free options, to ensure you're offering what your customers are hungry for.

Location is Key

As with most business, the importance of choosing the right location is something that can't be overstated. Consider your market carefully to make sure that there is a demand for hot dogs, and see what similar types of cuisine are doing well in the area.

In many areas, the hot dog is restricted to a concession stand snack that few would take seriously as anything more. Those markets will best support a hot dog cart or kiosk that can be set up at events and festivals during specific time periods. In urban areas with an active nightlife, hot dogs can feed late-night bar-goers before and after last call. Vendors in areas with access to a working-class market can cash in on hungry workers seeking a quick lunch, while younger generations may be attracted to a concept that takes the time-honored classic and makes it new again.

Licenses and Permits

When you feel confident you've chosen the perfect concept and the best location, it's time to get the ball rolling on making your business official. Requirements vary from city to city, but you'll definitely need to start with a general business license. Since you'll be dealing with food, a food handler's permit will likely also be required.

Zoning laws will govern the requirements of your building. The dictates on location in most cities for mobile operations are far more complex, though, with certain parking spaces or sidewalk areas set aside for vendors on certain days and even in specific hours. A local codes enforcement officer should be able to provide you with the details, but don't think that's the end of it – you'll need to keep up with local news to stay abreast of any changes. A simple Google search for a term like "changing food truck rules" will give you plenty of examples to show that the guidelines for mobile food vendors are constantly being revised.

Additionally, a number of other licenses will be required. The US Small Business Administration website is a good place to start learning about requirements. You'll also want to talk to city and/or county codes enforcement officers to ensure you meet local regulations. The folks at your local chamber of commerce may also be able to give you some tips on how to open a hot dog stand in your area.

Getting the Right Hot Dog Equipment

Investing in the right equipment is critical to getting the results you want. Besides the equipment needed to cook, you'll also need to consider cold storage, dry storage, and smallwares. If you're opening a dine-in concept, consider the furniture and tabletop supplies you'll need as well.

Hot Dog Cooking Equipment

There's more than one way to cook a dog. All you really need to cook up a batch are a stock pot and a gas range or a hot plate, but most customers want something they can't get at home when they dine out. The hot dog's unique format means that it can be cooked a number of ways and still come out delicious.

  • One nontraditional and often overlooked way to cook a hot dog is in a commercial deep fryer. Deep-fried dogs come out crispy on the outside and juicy on the inside. These can be presented as a no-holds-barred simple snack indulgence.
  • More traditionally, a flat-top griddle can give you the highest cooking capacity with the smallest footprint, making it great in space-challenged venues. The low profiles of these units help you make the most of your real estate, and standard models are available that are heated by electric and gas, so they're easy to make mobile if you're selling dogs out of a truck or stand. The griddle's high heat can sear up crispy delicious dogs in no time.
  • Similar in format to the griddle, a charbroiler can replicate that backyard barbeque taste and appearance. The maintenance considerations are greater, but that smoky taste and aroma, as well as the signature grill marks on your dogs, can be well worth the effort.
  • Caterers and certain venues can create an even more authentic cookout feel with a commercial outdoor grill. Cooking on a grill can impart those signature marks and sear the surface of the dogs for a supremely satisfying flavor. Vaporized drippings from the grill can also create an irresistible scent that's often the best possible marketing strategy.
  • The most labor-efficient, albeit least glamorous, option is the hot dog roller grill. While these are ideal for retail stores and concession stands that don't rely on hot dogs to drive profits, hotdog-centric businesses typically opt for some heavier equipment.

Additional Equipment Considerations

More than likely, you'll need a way to keep perishables chilled until you need them, whether you're simply storing extra franks or other fresh ingredients for toppings. A simple cooler filled with ice might suffice for the smallest sidewalk carts. When you have the space and electrical resources, a reach-in refrigerator will do the trick for storing most of your supplies for a small- to medium-sized venue. A larger establishment might need a walk-in cooler to hold everything you need to have in stock. A refrigerated food prep table is going to be a go-to piece if your concept offers a number of toppings that need to remain chilled and handy.

Don't neglect your dry storage needs. Having the right shelving is necessary for a business that's streamlined, organized, and sanitary. A number of options are available, from affordable wire units to nearly-indestructible polymer shelves. These kits can be adapted to any establishment that needs them. Mounted shelves can be attached to the wall for space-saving overhead storage.

[1]Food Truckr article comparing food trucks and restaurants

[2]Los Angeles Times article on turning food truck success into a restaurant