A hot dog cart business is a business that sells different types of hot dogs and drinks from a cart or food truck. Hot dogs are prepared commercially by mixing meats, spices, binders, and fillers in vats where rapidly moving blades grind and mix the ingredients in the same operation.
This mixture is forced through tubes into casings for cooking. A large percentage of hot dogs sold in the United States are “skinless” rather than “natural casing” sausages. The market size, measured by revenue of the Hot Dog and Sausage Production industry, is $19.2bn in 2022 and the industry is expected to increase by 3.6 percent going forward.
Steps on How to Start a Hot Dog Cart Business
Table of Content
Conduct Market Research
If you are considering starting a hot dog cart business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your hot dog cart business should be to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source for information that will help you maximize your business, give you reliable data, and a hint of what your potential market will be looking out for from a hot dog cart business, and also help you operate your hot dog cart business with less stress.
a. Who is the Target Market for Hot Dog Cart Business?
- Facility managers
- Event Planners
- Workers in construction sites
- Campground patrons and staff members
- Everyone who resides in the location where you intend to sell your hot dogs.
b. Is Hot Dog Cart Business a Profitable Business?
Yes, the hot dog cart business is very profitable. The market size of the hot dog and sausage production industry in the US has grown 2.0 percent per year on average between 2017 and 2022.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the hot dog cart business because the hot dog cart business is a niche idea in the hot dog and sausage production industry.
d. Who are the Major Competitors?
- Tyson Foods Inc.
- Smithfield Foods Inc.
- The Kraft Heinz Company
- Conagra Foods Inc.
- Rutt’s Hut.
- Superdawg Drive-In.
- Nathan’s Famous – Coney Island.
- Olneyville NY System Restaurant.
- Lafayette Coney Island.
- American Coney Island.
- Gene & Jude’s
- Ben’s Chili Bowl
- Dat Dog
- Hillbilly Hot Dogs
- El Guero Canelo
- The Wiener’s Circle
- Biker Jim’s Gourmet Dogs
- Puka Dog
- The Happy Dog
e. Are There County or State Regulations or Zoning Laws for Hot Dog Cart Business?
Yes, there are county or state regulations or zoning laws for hot dog cart businesses. Towns, cities, and counties also have zoning restrictions, designating commercial and noncommercial zones. While you may be mobile, you can’t park just anywhere.
Most areas limit food trucks, trailers, buses, and carts to specific locations. A list of where you can and can’t park should be available from the county clerk. You may also have to adhere to two-hour parking restrictions and pay for parking meters.
f. Is There a Franchise for Hot Dog Cart Business?
Yes, there are franchise opportunities for the hot dog cart business, and here are some of them;
- The Original Hot Dog Factory
- Nathan’s Famous Inc. Franchises
- Wienerschnitzel Franchises
- Hot Dog on a Stick Franchises
- Dog Haus Worldwide Franchises
- Sonic Drive-In Franchises
- Johnnie’s Dog House
- Dave’s the Dog House LLC Franchises
- Umai Savory Hot Dogs Franchises
- Dat Dog Specialty Franchises
- Destination Dogs
- Sam’s Hot Dog Stand.
g. What Do You Need to Start a Hot Dog Cart Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Mobile Carts
- A Corporate Bank Account
- Ingredients and Packaging Materials
Memorable Hot Dog Cart Business Names
- Grab and Go© Hot Dog Cart, Inc.
- Mack® Hot Dog Cart, LLC
- Larry Bird© Hot Dog Cart, Inc.
- Food Concept® Hot Dog Cart Company, Inc.
- My Food™ Hot Dog Cart Company, Inc.
- Grandiose™ Hot Dog Cart Company, LLC.
- Tyon Winston and Co© Hot Dog Cart Company, LLC
- Go Network® Hot Dog Cart Company, Inc.
- Delicious Foods© Hot Dog Cart Company, Inc.
- Tim Grants© Hot Dog Cart Company, Inc.
- Sofia Grant® Foods, LLC
- Diana Banks™ Hot Dog Cart, LLC
- Mama Bee© Hot Dog & Sausage, Inc.
- Hot Dogs on Wheel®, Inc.
- Yummy Yum™ Hot Dog & Sausage, Inc.
- Tasty Tasha™ Hot Dog Cart, Inc.
- Hot Dog King© Hot Dog & Sausage Cart, Inc.
- One Stop® Hot Dog & Sausage Mobile Cart, LLC
- Jessica Scholes© Hot Dog Cart, Inc.
- Indiana Brothers© Hot Dig & Sausage, Inc.
Register Your Business
a. What Type of Business Structure is Best for Hot Dog Cart Business?
Even though there are several options when it comes to the business structure of a hot dog cart business, but the one most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Hot Dog Cart Business?
- General Business License
- Zonal Permits
- Signage Permit
- Proof of district-issued food manager identification card
- Copy of license for the service support facility and/or a recent inspection report for your commercial kitchen or production facility.
d. What Type of Certification is Needed to Start a Hot Dog Cart Business?
You don’t need any certifications to start a hot dog cart business.
e. What Documents are Needed to Open a Hot Dog Cart Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Approval for parking)
- Certificate of Incorporation
- Food Handlers’ License
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a hot dog cart business, usually you may not have any need to file for intellectual property protection or trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Hot Dog Cart Business?
The startup cost for a hot dog cart business is not uniform as some factors can influence the cost. But basically, a hot dog cart business will cost from $5,000 – $50,000 to start and that can easily go higher depending on your overall business goals and objectives.
b. What are the Costs Involved in Starting a Hot Dog Cart Business
- Business Registration Fees – $750.
- Legal expenses for obtaining licenses and permits – $1,300.
- Marketing, Branding and Promotions – $1,000.
- Business Consultant Fee – $2,500.
- Insurance – $1,400.
- Rent/Lease – $25,000.
- Other start-up expenses like stationery ($500), and phone and utility deposits ($1,800).
- Operational Cost (salaries of employees, payments of bills et al) – $30,000
- Start-up Inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $1,750
- Carts – $20,000
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Hot Dog Cart Business?
- The size of the hot dog cart business (number of carts you intend starting the business with)
- The locations you intend to cover
- The required licenses and permits
- The cost for branding, promotion, and marketing
- The cost of equipping the hot dog cart business
- The cost of insurance policy covers
- The cost for registering the business
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the hot dog cart business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
No, you don’t need to build a facility for your hot dog cart business because everything can be done on the go especially if you have where to prepare your hot dogs.
e. What are the Ongoing Expenses of a Hot Dog Cart Business?
- Ingredients and serving and packaging materials
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
- Carts maintenance
- Marketing costs
f. What is the Average Salary of your Staff?
- Chief Operating Officer (Owner) – $38,000 Per Year
- Manager – $30,000 Per Year
- Hote Dogs Makers – $26,100 Per Year
- Salespersons -$24,000 Per Year
g. How Do You Get Funding to Start a Hot Dog Cart Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Indiana Brothers© Hot Dig & Sausage, Inc. is a registered mobile hot dog cart business that will be located on one of the busiest roads in the heart of Mamaroneck, New York. We have been able to secure the necessary street vending/mobile truck permit that will enable us to operate all around New York. We have plans to sell our franchise all across the United States of America and Canada.
b. Products and Service
- Hot dogs
- Bottled water and beverages.
c. Mission Statement
Our mission is to establish a standard hot dog cart business that will make available a wide variety of hot dogs at affordable prices to the residents of Mamaroneck, New York, and other cities in the United States of America and Canada.
Our vision is to become the leading mobile hot dog cart in the whole of Mamaroneck, New York and to sell our franchise in other cities in the United States of America and Canada.
d. Goals and Objectives
The goals and objectives of a hot dog cart business are to service areas where it might be difficult to quickly construct a hot dog shop; areas such as carnival sites, construction sites, sporting event centers, campgrounds, beaches et al.
e. Organizational Structure
- Chief Operating Officer (Owner)
- Hot Dog Makers
- Sales Girls and Sales Boys
a. SWOT Analysis
- Excellent operational history
- Superb menu list
- Experience and trained professionals.
- Excellent customer testimonials.
- Limited funds for the promotion of the business
- The owner is new to large scale marketing
- Lack of economies of scale.
- Growing outdoor activities
- Build upon existing clientele
- Low start-up
- Always in demand
- Variety of what to offer
- Online market, new services, new technology, and of course the opening of new markets.
- Weather constraints
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- The regulatory department could change its regulatory status and decide to enforce strict regulations that can strangulate new business.
b. How Do Hot Dog Cart Businesses Make Money?
Hot dog cart businesses make money by selling;
- Hot dogs
- Bottled water and beverages
c. Payment Options
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your hot dog cart by sending introductory letters to residents, park managers, and other stakeholders in and around the city you intend to cover.
- Engage in roadshows in targeted communities from time to time to sell your hot dogs and promote your hot dog cart company
- Advertise your hot dog cart in community-based newspapers, local TV and radio stations
- List our business and products on yellow pages ads (local directories)
- Leverage on the internet and mobile apps to promote your hot dog cart
- Engage in direct marketing and sales
- Deliberately brand your hot dog cart
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
Most hot dog cart businesses charge based on the size and type of hot dog. Prices range from $5.25 to $6.25, but the standard dog is $4.25.
b. How Much Profit Do Hot Dog Cart Business Owners Make a Year?
It depends, but an available report shows that on average, a successful hot dog cart business owner can expect to take in an annual income of $60,000 or more.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the hot dog cart business (number of carts owned)
- The location the hot dog cart business is covering
- The management style of the hot dog cart business
- The business approach of the hot dog cart business
- The advertising and marketing strategies adopted by the business.
- The number of years the hot dog cart is in business
d. What is the Profit Margin of a Hot Dog Cart Business?
The profit margin of hot dogs varies. For example, a hot dog with bun and condiments costs a vendor between 45 and 80 cents to prepare, depending on the supplier and the quality of the meat. If you sell that hot dog for $3.25, you’ve got a markup of roughly 300 percent.
e. What is the Sales Forecast?
Below is the sales forecast of a hot dog cart business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $120,000
- Second Fiscal Year: $280,000
- Third Fiscal Year: $350,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Hot Dog Cart Business?
- The demography of the location
- The demand for hot dogs in the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of hot dog cart businesses, and fast-food outlets in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Hot Dog Cart Business?
- Cleveland, Ohio
- Nashville, Tennessee
- Mamaroneck, New York
- Los Angeles, California
- Dallas, Texas
- Miami, Florida
- Las Vegas, Nevada
- Providence, Rhode Island
- San Francisco, California
- Chicago, Illinois.
c. What Equipment is Needed to Operate a Hot Dog Cart Business?
- Mobile carts
- Food preparation equipment such as mixers, slicers, sandwich presses, blenders, etc.
When it comes to hiring employees for a standard hot dog cart business, you should make plans to hire a competent chief executive officer (you can occupy this position), manager, hot dog maker, and salespersons.
Launch the Business Proper
No hot dog cart business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party. The bottom line is that with proper launching of the hot dog cart business, you will officially inform people in your city that your hot dog cart is open for business.
a. What Makes a Hot Dog Cart Business Successful?
- Choose a good location, good menu, and reliable mobile carts to launch the business
- Hire only competent, hardworking, and trustworthy staff
- Throw a grand party before officially opening the business
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your hot dog cart business
- Leverage on all available online and offline platforms to promote your hot dog cart business
b. What Happens During a Typical Day at a Hot Dog Cart Business?
- The business is open for the day’s work
- The mobile carts are washed, cleaned, and ready for business
- Hot dogs are prepared
- Customer’s requests are taken and they are attended to
- Schedule maintenance of carts are carried out
- Marketing/website upkeep
- Supply ordering
- Administrative duties
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Hot Dog Cart Business?
- Good culinary skills
- Customer services skills
- Interpersonal skill
- Business management skills
- Work experience in a hot dog and sausage production industry
- Experience in managing people
- Experience in business administration
- Experience in handling relevant software.