Do you want to open a hot dog business by buying Hot Dog on a Stick franchise? If YES, here is how much it cost to open Hot Dog on a Stick franchise successfully. If you are looking towards opening a Hot Dog on a Stick Franchise, it will be nice for you to have a preview of what the company represents before enquiring about the total cost of getting the franchise.

Hot Dog on a Stick was founded in 1946 and they began franchising in 1997, about 23 years ago. Chris Dull is the CEO and they have their corporate head office at 5555 Glenridge Connector, #850 Atlanta, GA 30342, and as of the 2015 Franchise Disclosure Document, there are 19 franchised Hot Dog on a Stick locations in the USA.

Hot Dog on a Stick was started by Dave Barham. It started in Santa Monica as a little stand at a spot known as Muscle Beach. It grew into several locations over the years and was very prominent in shopping malls. Today you can own a Hot Dog on a Stick location as a franchise opportunity. The company now has over 100 locations in 11 states and even has a few worldwide locations including Korea and Dubai.

Financial Investment Required to Open Hot Dog on a Stick Franchise

Hot Dog on a Stick has a franchise fee of up to $35,000, with a total initial investment range of $290,200 to $533,500. Here are areas where you are expected to spend money and the cost associated with it;

1. Initial Franchise Fee: $15,000 to $25,000

If Hot Dog on a Stick grants you a franchise for a Traditional Store, then when you sign the Franchise Agreement, you must pay Hot Dog on a Stick an initial franchise fee (“Franchise Fee”) of $25,000. The Franchise Fee for a Non-Traditional Store is $15,000.

Please note that Hot Dog on a Stick participates in the International Franchise Association’s Veterans Transition Franchise Initiative (“VetFran”) program to provide franchise opportunities to qualifying veterans.

The Hot Dog on a Stick Patriot Program incentive provides a 25 percent reduction in the Franchise Fee due under a single unit Franchise Agreement for Traditional Stores only. This incentive may not be combined with any other incentive program and applies only to the first Store.

2. Site Selection Assistance: $300 per employee

Or agent for each full or partial day after the second day, not to exceed five days. Hot Dog on a Stick will review your submittal package for your proposed site and determine whether to accept your proposed site. It will conduct an on-site evaluation if it considers it necessary and appropriate as part of its evaluation of your submittal package.

Please note that If Hot Dog on a Stick determines that on-site evaluation is necessary and appropriate (on its own initiative), it will provide the evaluations (up to 2 days, unless you and Hot Dog on a Stick agree otherwise), at its own expense, although it reserves the right to charge you an additional fee for this service.

So also, if Hot Dog on a Stick charges this fee, the fee will be its out-of-pocket expenses for each proposed site for which it conducts an onsite evaluation. Hot Dog on a Stick expects this fee to be $300 per employee or agent for each full or partial day after the second day, not to exceed five days.

3. Grand Opening Marketing Fee: $3,000

Hot Dog on a Stick reserves the right to collect the grand opening marketing fee of $3,000 when you sign your Franchise Agreement.

Please note that if Hot Dog on a Stick collects this fee, it will either: (i) reimburse you for your documented grand opening marketing expenditures that it has pre-approved, up to $3,000; or (ii) directly pay your vendors for your grand opening marketing expenditures that it has pre-approved, up to $3,000.

4. Initial Development Fee: $5,000 per Store

To be opened under the Area Development Agreement. Please note that if Hot Dog on a Stick grants you development rights, then you will pay Hot Dog on a Stick a Development Fee of $5,000 per Store to be opened under the Area Development Agreement when you sign the Area Development Agreement.

The Development Fee will vary based on the number of Stores that you agree to develop (with a typical minimum of 3 Stores), regardless of whether the stores are Traditional or Non-Traditional Stores.

The Franchise Fees for Stores opened under a Development Agreement (with a typical minimum of 3 Stores) will be $20,000, and $10,000 for each additional Store thereafter. For each Store, you must sign Hot Dog on a Stick’s then-current form of Franchise Agreement to govern the operation of that Store.

5. Royalty Fee: 6 percent of your Net Sales for the preceding month

Please note that the Due Date for this is Currently, 6:00 p.m. (Eastern Time) on the 10th day of the following month.

  1. Marketing Fee: 2 percent of your Net Sales for the preceding month and the Due Date for this cost is Currently, 6:00 p.m. (Eastern Time) on the 10th day of the following month.
  2. Local Marketing Requirement: 2 percent of your Net Sales and Please note that the Due Date: for this is Annually.
  3. Interest: 18 percent per year (or maximum legal rate, if less) and the Due Date for this is On demand.

Please note that if you fail to make a payment due to Hot Dog on a Stick on time, you must pay it interest on the amount owed from the due date until paid in full.

  1. Late Fee: $25 per week and the Due Date for this expenditure is On demand.

Please note that if you fail to make a payment due to Hot Dog on a Stick on time, you must pay it the Late Fee.

You should also know that Hot Dog on a Stick may increase the Late Fee on 60 days’ written notice. However, it may not increase the Late Fee more than once in any 12-month period.

  1. Additional Training: Currently, $300 per employee or agent for each full or partial day and the Due Date for this is Before training begins.

Please note that Hot Dog on a Stick may charge for additional training for (i) training persons repeating a course or replacing a person who did not pass, (ii) training new employees, and (iii) optional training it provides.

So also, you must pay for any travel and living expenses, wages, and other expenses your trainees incur.

  1. Additional Consulting Services: Currently, $300 per employee or agent for each full or partial day, plus their travel and living expenses and Please note that the Due Date: is Within 15 days after services are rendered.

Please note that this is Payable if Hot Dog on a Stick provides requested consulting services in person at a place other than its offices.

  1. Assigned Trainers: Hot Dog on a Stick’s actual costs and expenses, including travel and living expenses for its trainers and the Due Date: is Within 10 days of invoice.

Please note that if you fail to maintain Hot Dog on a Stick’s quality and service standards, it may, in its sole judgment, assign trainers to the Store to retrain your employees and restore service levels.

  1. Product, Service, Supplier, and Service Provider Review: Hot Dog on a Stick’s reasonable cost of inspecting the supplier, testing the proposed product, or evaluating the service provider or proposed service, including personnel and travel costs; this cost will not exceed $5,000 and the Due Date is On demand.

Please note that this is Payable if you wish to offer products or use any supplies, equipment, or services that Hot Dog on a Stick has not approved, or wish to purchase from a supplier or service provider that Hot Dog on a Stick has not approved, whether or not it approves the item, service, supplier, or service provider.

  1. 60-Day Extension Fee: $5,000 and the Due Date for this is Upon expiration of the Site Securitization Deadline.

Please note that if you do not enter into and provide Hot Dog on a Stick with a copy of the purchase agreement or Site Lease, as applicable, in accordance with the requirements of the Franchise Agreement on or before the Site Securitization Deadline, so long as you are otherwise in compliance with your obligations under the Franchise Agreement and are using best efforts to secure an extension to the Site Securitization Deadline, Hot Dog on a Stick will grant you a 60-day extension to the Site Securitization Deadline in exchange for your payment of a $5,000 extension fee.

  1. Relocation Charge: $2,000 and the Due Date is On demand.

Please note that this is Payable if you ask Hot Dog on a Stick to review a new proposed site, whether or not it approves the site.

  1. Transfer Fee: $10,000 for a transfer of your Store or Franchise Agreement and the Due Date is At or before transfer and Payable only on transfer of Franchise.

Please note that upon the submission of a proposal to transfer your Store or Franchise Agreement, you must pay Hot Dog on a Stick a non-refundable deposit of $2,000 in connection with the costs it will incur in evaluating that transfer.

So also, if you chose to move forward with the transfer, the deposit will be applied toward the transfer fee.

  1. Successor Fee: Hot Dog on a Stick’s then-current Successor Fee; currently, $7,500 and the Due Date for this is On signing a successor Franchise Agreement.

Please note that you may enter into a successor Franchise Agreement for one additional 10-year term, if you meet certain conditions.

  1. Insurance: Cost of the premium, plus a reasonable fee for Hot Dog on a Stick’s services in procuring the insurance and the Due Date is On demand.

Please note that this is payable only if you fail to maintain the minimum insurance Hot Dog on a Stick requires and it chooses to procure the required insurance for you.

  1. Audit: Cost of audit, plus travel and living expenses, plus interest on the amount of the underpayment at an annual rate of the lesser of 18 percent or the maximum interest rate permitted by law and the Due Date is within 15 days of demand.

Please note that this is payable if audit or review shows an understatement of 3 percent or more of your Net Sales for any period.

  1. Inspection: Hot Dog on a Stick’s reasonable expenses incurred in inspecting your business, including travel and living expenses, wages, and other expenses for its employees; this cost will not exceed $5,000 and the Due Date for this is On demand.

Please note that this is payable if inspection needed due to your repeated or continuing failure to comply with any provision of the Franchise Agreement.

  1. Convention or Meeting Attendance: As Hot Dog on a Stick determines based on its costs of holding the convention or meeting and the Due Date is On demand.

Please note that Hot Dog on a Stick does not currently charge an attendance fee, but it reserves the right to do so.

  1. Remedial Expenses: Hot Dog on a Stick’s reasonable expenses incurred in correcting your operational deficiencies; this cost will not exceed $10,000 per deficiency and the Due Date is On demand.

Please note that this is Payable if Hot Dog on a Stick corrects deficiencies that it has identified during a site inspection and that you failed to correct within a reasonable time after notice from it.

  1. Enforcement Expenses: Hot Dog on a Stick’s reasonable cost of de-identifying your Store and the Due Date is On demand.

Please note that this is Payable if your Franchise Agreement expires or is terminated, you fail to de-identify your Store, and Hot Dog on a Stick takes steps to do so.

  1. Indemnification: Hot Dog on a Stick’s liabilities, fines, losses, damages, costs, and expenses (including reasonable attorneys’ fees) (“Losses”) and the Due Date is On demand.

Please note that this is Payable if Hot Dog on a Stick incurs Losses due to your activities under the Franchise Agreement or your activities relating to the Store.

  1. Liquidated Damages: It varies but the Due Date is On demand.

Please note that this is Payable if Hot Dog on a Stick terminates your Franchise Agreement based on your default or if you terminate the Franchise Agreement in violation of its terms.

  1. Test Products: $50 to $500 and the Due Date is On demand.

Please note that if Hot Dog on a Stick requires, you must participate in market research programs or test marketing of new products and services, and must purchase a reasonable quantity of the test products.

In Summary,

  • Initial Franchise Fee: $15,000 to $35,000
  • Total Investment: $290,200 to $533,500
  • Working Capital: $30,000 to $40,000
  • Royalty Fee: 6.0 percent
Joy Nwokoro