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In a time of uncertainty for a lot of industries, the humble hot dog has been flourishing.
The Appeal of Hot Dogs
Hot dogs are among the most popular foods in America. 255 million Americans ate them in 2020, and more than half were eaten in restaurants or as street food.
One of the advantages of hot dogs, both for consumers and for vendors, is their convenience. They’re a food that’s easy to eat on the move, so while some franchises provide space for customers to sit and eat, others serve their sausages piping hot from portable food carts. These carts can provide a cheaper way to get a franchise started, and more flexibility to move if your initial location doesn’t work out. That said, it’s important to be aware of the rules for street sales in your territory and pick locations based on them – you can’t just park your cart in the middle of the street and start selling.
A large part of the popularity of hot dogs comes from the fact that they’re both inexpensive and tasty. Cheap sausages and buns combine with dressings such as ketchup, mustard, and onions to make a meal that might not have nuance but that has plenty of bang for your buck. And because so many Americans have been eating them their whole lives, they’re comfort eating too.
The Economics of Hot Dogs
Their low price point is an important part in understanding the economics of the hot dog industry. Sellers rely on high volumes rather than high prices to bring the profits in.
Hot dog production was worth over $23 billion in 2023, after average annual growth of 4.2% over the previous five years. Hot dog consumption keeps on growing, even as some other foods go in and out of fashion. Rising meat prices have made margins tighter in recent years, and with pressure on water, feed, and wages, that’s unlikely to change dramatically any time soon. But ironically, those rising prices may have helped to keep hot dogs popular – when steak gets too expensive, the humble hot dog at least lets you enjoy a taste of meat.
It helps that not much goes to waste in a hot dog business. There aren’t a lot of different ingredients to juggle, and the ones you’re working with mostly store well. Refrigeration and preservatives mean that hot dogs will last through peaks and troughs of business, as will the buns and sauces. This means lower costs both on food and on waste disposal.
People eat hot dogs in a variety of places, and deciding where to sell yours is a crucial part of setting up a hot dog franchise. A breakdown of sales shows that 21% are eaten in restaurants, 15% from street vendors, and another 19% at ball parks and festivals. So while 45% are eaten at home, more than half are bought out and about, and that’s where franchises come in. Do you want to run a sit down hot dog restaurant, with steadier business year round and higher overheads, or ride out the peaks and troughs of sports attendance, with some long and bustling days followed by others when there’s no point opening up? Over 19 million hot dogs sold at ball parks in a single season, so being in the right place can make a colossal difference.
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Though seasonality is most notable for sellers at events, it’s important for anyone selling hot dogs from a stand. Because they’re so often eaten outside, hot dog sales are more seasonal than similar sorts of food. The peak season is Memorial Day to Labor Day, with seven billion hot dogs consumed on average in that period, and in some territories, sales might drop to almost nothing in between. As part of the ritual of game attendance, hot dogs can be really big business on the right day.
Steadier business comes in bustling urban areas like New York, but those areas also have stiff competition, both from other vendors and from other types of food.
Making Your Hot Dogs Stand Out
Though its fundamental design remains the same, there’s room for variation in hot dogs, and that’s reflected in current industry trends.
Some hot dogs stand out by being healthier, with lower levels of salt and fat, or larger amounts of protein. This is a potentially valuable response to growing concerns over the impact of red meat, and can also connect into making more prestigious food, from higher quality meat. It’s an approach that might seem at odds with the core identity of hot dogs as cheap, tasty junk food, but it sells them to some customers who would otherwise keep away. Vegetarian and vegan hot dogs fill a similar niche and are often healthier than meat options.
Other hot dogs are differentiated by flavor, using tastes from all over the world. Barbeque, Cajun, and teriyaki flavored hot dogs are all among the options that have recently become available in an increasingly varied industry. Whether the flavor is cooked into the sausage or added on top, this is a trend that fits better with the hot dog’s traditional place as fast food, and that franchises can use to make their product appealing.
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In times of economic uncertainty, the humble hot dog is still doing steady business. Customers know what they’re getting when they take a bite, and so do franchisees.
The Top Hot Dog Franchises of 2024
1. Sonic Drive-In
Sonic Drive-In restaurants are like a throwback to the drive-in diners of the 1950s. Customers can pull into covered drive-in stalls, place orders over an intercom, and have the food delivered by carhops, who are often on roller skates. Many locations also feature patio seating, indoor seating, and drive-thru service. This is one of the restaurant chains that saw huge growth during the COVID-19 pandemic thanks to its drive-in model.
Its extensive menu offerings include four signature all-beef hot dogs: Chili Cheese Coney, All-American Dog, Footlong Quarter Pound Coney, and a corn dog. Sonic also offers flavor add-ins to their beverages, resulting in something like 1.3 million possible drink combinations. As much as a quarter of all orders are drink-only orders.
Founded by Troy Smith in Shawnee, Oklahoma, in 1953 and franchising since 1959, the number of locations has increased only slightly in recent years to the current total of 3,545 (down from the previously reported total of 3,552), of which 324 are company-owned, and all are located in the US.
Wienerschnitzel claims to have the world’s most wanted wiener and presents an impressive menu of 12 signature hot dogs, including such creative options as the Green Chile Chili Cheese Dog and the Junkyard Dog topped with french fries, chili sauce, a slice of American cheese, French’s mustard, and grilled onions. Each of their offerings can be ordered with an all-beef dog or a Polish sausage. The menu also includes burgers, sandwiches, breakfast options, snacks and sides, and Tastee Freez frozen treats.
Founded by John Galardi in Southern California in 1961 and franchising since 1965, the number of locations hasn’t changed too much in recent years and currently stands at 316 (down from the previously reported total of 321), of which none are company-owned, and all are located in the US.
3. Nathan’s Famous
Nathan’s Famous was founded over a century ago when the original Coney Island hot dog stand sold its dogs for just a nickel. An essential part of Nathan’s brand (whose hot dogs are also sold in grocery stores) is its annual hot dog eating contest held every July 4th, in which the person who eats the most dogs gets the Mustard Belt. In addition to its signature dogs, the menu also features Philly cheesesteaks, chicken classics, crinkle-cut fries, onion rings, hamburgers, and Arthur Treacher’s fish & chips.
Founded by Nathan Handwerker in the Brooklyn borough of New York City in 1916 and franchising since 1988, the number of locations has mostly declined in recent years from 320 in 2014 to the current total of 236 (down from the previously reported total of 241), of which four are company-owned, and 74 are located outside the US.
4. Dog Haus
Dog Haus brings the “better burger” movement to hot dogs in an upscale, trendy approach that includes craft beer and craft cocktails created by celebrity mixologists. The chain’s all-beef dogs and hand-crafted sausages are all nitrate-free and are served up on King’s Hawaiian rolls. There are eight creatively named signature haus dogs, eight signature haus sausages, seven signature haus burgers, a haus chicken sandwich (the Bad Mutha Clucka), several plant-based options (Impossible Burger and Beyond Sausage brands), sliders, sides, and ice cream desserts.
Founded by a trio of friends (Hagop Giragossian, Quasim Riaz, and André Vener) in Pasadena, California, in 2010 and franchising since 2013, the number of locations currently stands at 55 (up from the previously reported total of 48), of which one is company-owned, and all are located in the US.
5. Hot Dog on a Stick
Hot Dog on a Stick isn’t just a hot dog on a stick, it’s a corn dog on a stick. The stand’s first location back in the 1940s was on Muscle Beach in Venice, California, which was freshly rebuilt in 2023. Patrons have the choice of Nathan’s Famous all-beef hot dog, turkey dog, or veggie dog that is dipped in the Party Batter (based on the cornbread recipe of the founder’s mother) and cooked to order. The menu also features cheese on a stick, hand-stomped lemonade, french fries, and funnel cake sticks.
The company has been employee-owned since 1991, when the founder died, and also successfully navigated a bankruptcy filing in 2014. Founded by Dave Barham in Santa Monica, California, in 1946 and franchising since 1997, the number of locations has fallen from 105 in 2013 to the current total of 50 (down from the previously reported total of 51), of which 33 are company-owned, and one is located outside the US.
An Important Note About Our Methodology
The franchises on this list were ranked according to the number of units in the franchise system. If you are a prospective franchisee searching for franchise opportunities that meet or exceed certain performance benchmarks for sales, profits, and return on investment, please check out this list of America’s Most Lucrative Franchises.