Everyone loves a hot dog. But for a few dedicated souls, that love leapfrogs into full-on obsession; even quitting one's job to dedicate to the hot dog full time. Some of these obsessives study the business and others run smaller-scale hot dog concerns to test the waters, but some just jump right in to owning a brick and mortar hot dog stand. They wake up early, spend all day working in exchange for crumpled singles and fives, and come home in the evening reeking of mustard and fryer oil. If they fail, they may not ever want a hot dog again...and that's truly a fate worse than death.
To see what it takes, I visited more than two dozen hot dog stands in Chicago, chatting with proprietors about what's involved in running the kind of hot dog stand you remember from childhood. I dug deeper with a few experts: Joe Plonka, owner of U-B Dogs, which is located in the Loop, the central business district of Chicago; Ben Ustick, who married into the Superdawg empire, a beloved drive-in hot dog business that has been operating since 1948; and Gus Paschalis, who bought Evanston's Wiener & Still Champion in 2005 from owners who started the business in 1979.
While all share a love of food, these successful hot dog stand owners warned me that to succeed, that passion needs to be balanced with common sense and a mind for business. I began to think of my investigation as a sort of hot dog MBA, conducted over the course of three weeks with two-and-a-half tanks of gas, one legal pad, and enough hot dogs to give concern to any cardiologist. Plus cheese fries.
What Dogs Cost
The distinctive natural casing hot dogs that Vienna Beef makes for the Chicago market (as well as select Florida and Arizona locales) come in eight hot dogs per pound (though you can buy dogs at sizes anywhere from 4 to 10 per pound) and cost you $58.52 for a 10-pound case. Go skinless, and you'll pay under 50. My gurus Plonka and Paschalis insist on the natural casing Vienna dogs; Superdawg sources custom-made natural casing dogs from a secret vendor that customers love and the owners aren't keen on divulging.
It might be worth noting that no hot dog stand that uses solely skinless dogs is mentioned as "The Best" in the online rankings that we all love so dearly. But using high-end dogs isn't enough to win the game. "Look across the street there," Plonka said on a recent visit, gesturing out the window to the 7-11 across the street. "People can literally get the hot dog there for $1.75. My entire gamble in opening this place was hoping that customers would want better quality ingredients, prepared carefully, and served in a friendly environment. As it happens," Plonka continued, "I'm friendly with the owner of that 7-11, and he half-jokingly says I've killed his hot dog business."
Let's look into the ingredients beyond the dog. Poppyseed buns have been entrenched in the Chicago Hot Dog canon since the Mary Ann Baking Company started supplying them to the city's hot dog stands in 1935. An eight-pack will cost you $2.60, where a generic 16-count package of seedless buns can be had for $2.09. Are those seeds worth it? Even among the city's most popular stands, there are breaks with tradition: Budacki's, endorsed by Anthony Bourdain, doesn't spring for the poppyseed buns. And Gene & Jude's in River Grove serves the smaller 10-to-a-pound dog.
All the options are worth considering, since these small costs add up before you're even built your first hot dog, and for every hot dog thereafter. Once you've covered dogs and buns, mustard is next. (Woeber's, at $3.36 for 108 ounces, is cheaper than French's at $5.72, and the fancy butlers in '90s commercials get Grey Poupon at $12.53 for 48 ounces. Then come the onions ($23.95 for a 50-pound bag), neon green relish ($5.23 to $6.62 a gallon), tomato slices (approximately 95 cents a pound), sport peppers ($6.37 to $7.04 a pound), celery salt ($3.07 for 30 ounces), and a pickle spear ($21.51 to $23.54 for a 5 gallon bucket). You can also decide how you want to treat customers who want ketchup—generic ($18.10 for 134 ounces), name brand ($19.02 to $27.99 for the same quantity), or try and make them feel bad (free, but possibly alienating).
Apart from all that, the other major concern of a hot dog stand is its fries. The majority (90 to 95 percent, according to the people I spoke with, excepting one I'll get to in a minute) of customers order hot dogs, and the majority of those people (80 to 90 percent) order fries, which require fryer oil ($22.80 to 35.41 per 35 pounds, depending on your choice of oil), potatoes ($11.95 for 50 pounds), and salt (starting at 12 cents a pound and going up to somewhere near infinity at the 'artisan sea salt' level).
The basic way to put a price on your hot dog is to add up each of the constituent ingredients, along with the disposables you serve it with (wax tray liner, paper boat, to-go box, and so on), and find the total cost. That cost should represent 30 percent, give or take, of the final menu price, according to my sources and accounting firm Baker-Tilly.
Even if classic Chicago-style hot dogs are somewhat uniform in their elements, successful stands offer extras that reflect their owners' personalities. Often, these items will have slightly higher food costs, which are covered by the higher margins on fries and beverages. Paschalis serves a burger with six mozzarella sticks, bacon strips, and cheese slices—but only on Friday the 13th. He'll also test anything out in the fryer, including the chicken-fried bacon that became a menu favorite. Superdawg, with a classic menu straight out of Tom Petty's subconscious, still sells some unexpectedly delicious cornmeal tamales wrapped in parchment and foil, and added a chicken sandwich and Polish sausage in response to the changing tastes of Chicagoans over the years. Sometimes, adding something slightly different reshapes the business you're doing. At U-B Dogs (the outlier I mentioned above), Plonka decided to grind beef in-house every morning and offer charcoal-grilled burgers. Now, at a hot dog stand with "Dogs" in the name, he sells one hamburger for every hot dog and can go through 80 pounds of beef a day.
"You can stay true to your past and evolve at the same time. It's not always easy, but it's worth it if it makes your customers happy," says Ustick.
Of course, food's not the only cost you'll need to worry about. Just to serve dogs and fries, you're going to need a whole lot of restaurant equipment to store, cook, and serve everything. For a 1,000 square foot stand, you'll also need a prep table ($400), two or three 35-pound deep fryers (at two or three thousand dollars each), a countertop char grill (clocking in between $2,200 and $3,500), a heat lamp or heat table for fries (somewhere between $250 and $1000), a four-pan steam table (between two and four thousand bucks), and ice machine ($1500 and up), a fry cutter ($215), two or three storage fridges (plan on spending $6400 to $8600), a mise en place line for hot dog assembly ($1500 to $3000) and a griddle ($2000 to $3200.) At a restaurant auction, you can get these things at 10 or 20 cents on the dollar from the last person who didn't have the right business plan. But the availability and condition of items on auction lots isn't guaranteed, and you may be burning time you don't have to bid against your competitors.
Where does all this dough come from? According to Mark Reitman, who manages Vienna Beef's vendor training program, many stand owners (like many small business owners) buy in with personal or retirement savings, a point backed up by a 2014 article from Bloomberg. Kickstarter is also an option, though only 147 of 999 total brick-and-mortar restaurant projects have successfully been funded in the site's history, according to Kickstarter's Justin Kazmark.
Location, Location, Location
When you've decided to take an empty storefront and fill it with sausage and dreams, the fixed monthly cost of doing that is going to vary greatly depending on the hipness of the location, as well as the earning power and sheer number of people who live and work nearby. Retail real estate specialist Chad Bosley (PDF link) provided me with a general idea of how much one can expect to spend in the Chicago metro area right now.
If you want to sell hot dogs and fries to the numerous harried lawyers, commodities traders, and students of the Loop, you'll spend more than if you take a long-dormant strip mall location off the hands of some long-suffering owner in the near suburbs or northwest Indiana. Within the city, you're generally paying for proximity to downtown. The suburbs vary more depending on the demographics and available inventory—at present, Northwest Indiana averages $11.32 per square foot, Schaumburg (near the Woodfield Mall) averages $15.94 per square foot, and the Western and Southern suburbs are actually a bit pricier than nearby Chicago neighborhoods, at $16.82 and $16.45 respectively.
No matter where you choose, the cost is a function of population density and daily traffic. More people walking or driving by each day means more potential customers, so rent generally tracks with population density, excepting the Loop and its gigantic commuter population working in high rises. Selling to River North ($60 to 75/square foot) and its residents (28,174 per square mile per the 2010 census) costs more than Lakeview ($40 to 50 per square foot and 24,052 residents), which costs much more than the suburban land out by the mall ($15.94 per square foot and 3,840 residents).
"The key to me in opening in the Loop was location," says Plonka. "There are tens of thousands of people walking by every day, I know they have money because they're mostly here for their jobs, and they want an option that isn't another chain restaurant." He continues: "If I ever opened another location, it would be in another part of the neighborhood."
Before you shake the landlord's hand and sign your lease, you need to make sure your interests are represented in the contract. You'll want to address if you or your landlord will be responsible for repairs—especially fixing the heat and a/c. You'll also want to set a reasonable cap on the annual rent increases. Some landlords will decrease rent for the first few months in exchange for those who are developing a restaurant space from a blank slate. You may also want to insist that the landlord not lease to other tenants serving hot dogs or hamburgers.
"When I moved in, there was nobody else in the building and I was willing to put the money in to develop the space," Plonka recalls. "That went a long way toward getting some things I wanted into the contract."
So you've got the urban (or suburban) lease of your dreams, hopefully on renter-friendly terms that lessen the burden of $250-$400 per bill of electricity and gas. If you want neon signage in a prominent location, go ahead and ratchet that up into the thousands.
You might end up waiting several profitless, hot dog-less months to get permits, build out, and jump through all the hoops that City Hall demands of anyone who wants to sell a $6.99 lunch combo. "I was going back and forth with the city for months on inspections and permits before I could sell anything," Plonka recalls. "I had to bring in an architect, a plumber, an electrician, and so on. By the end, I had a total of nine different disciplines doing work in my place."
Spreading the News
Once your hot dog stand is open, you can make the greatest food in the world and you're still a failure if you can't get anyone to come and eat it. Between operating hours, prep, and supply runs, it pays to spend some of that "free" time promoting yourself and keeping your business in the minds of your potential customers. And often, you need to bring in the professionals.
The average hot dog stand owner has no earthly idea about the kind of time and money required for design and art, which can lead to disagreements with designers over the final cost. For professional logo design and branding, figure on at least $700 for the logo in all the formats you need, says Anthony Hall, who runs Hairbrained!, a solo design shop. If you want a more established company or agency to handle things, you could easily be looking at $2,000 or $3,000, according to Chicago-area artist and designer Ed Wantuch. If you're looking to save cash by seeking an art student or starving artist without much of an existing client portfolio, you may be able to get away with $200 or $300. Just don't expect that from everyone, and don't utter the sentence "What, just for some drawings?" That's a good way to get stabbed with a drafting pencil.
Getting the word out is more than a logo, of course. Wiener and Still Champion is active on Twitter and Instagram and Paschalis is a regular guest on WGN radio, which gives him regular exposure to the locals at the cost of staying up until 2 a.m., when the show airs. Superdawg collaborates with local beer makers Lake Effect Brewing to produce beers that pair nicely with their food (and get a little media attention). They also benefit from the services of Ustick—who works as a social media strategist for an agency in town during his non-Superdawg time—on their social media accounts and branding, services which would cost $40-$50 an hour for a freelancer. Sometimes, social media success is a little random; it helps when something like the #hotdogemoji hashtag blows up and reminds people that there's an established hog dog legend in their backyard while they're hungry and browsing Twitter.
U-B Dogs opts out of some of this effort, depending more on their central location, and the fact that a lot of people who work in the Loop are pretty tired of the chain restaurant options in the area. So the cost of being downtown comes with the benefit of a little more work/life balance.
Is It Worth the Daily Grind?
If you're slinging dogs to white-collar workers in the Loop and can close for nights and weekends, you may end up working 40 hours a week or more...but otherwise, it's a moving target.
"For everyone involved, it's a 24/7 deal," says Ustick. "My wife manages the second Superdawg location [in Wheeling, IL], and she's there six days a week for both the lunch and dinner rushes. When it's your family's business, you're hands on. You're there all the time."
Owners also need to build a salary for themselves into the business plan from day one. This is where they find out how much it pays to do exactly what they want to every day. "Doing business in a place where the seasons can really affect your business means that some months are always leaner than others," notes Paschalis. "At the very beginning, I didn't pay myself much."
Nearly everyone I spoke to recommended new owners pay themselves a manager's salary for the first year while the revenue and profit numbers begin to clarify. That generally means $12 to $17 hourly (at the upper end, $35,360 per year assuming 40 hours a week), and most mentioned owners who take less than half that in the early days. Once you're able to get your processes in place, set revenue and growth projections, and reinvest in the business, it's entirely possible to hit six figures hawking hot dogs from a single high-traffic location. Then maybe you get the itch to scout a second location.
"You need to have a clear plan of what you want to accomplish, and you always need to have a clear exit strategy in mind. For me," says Paschalis, "having different generations of the same family come in, having an impact on people's lives, it makes it all worth it."
You'll figure out pretty quickly if the reality of life behind the counter fits with your expectations for making a living. The ten- and twenty-cent decisions that you make every hour of every day repeat themselves day after day, year after year, until the choice of mustard, dog, or bun represents years of your life and thousands of dollars worth of your money. We think we'll rise to top of our professions by inborn talent or kickass '80s synthesizer montage, but you'll do better learning to keep an eye on staff costs, minimizing waste, and learning to negotiate with the landlord. Maybe you'll end up as one of the legends of a four-block radius of a certain neighborhood: a bit of name recognition, some money in the bank, and a steady lunch crowd. Or you're out of business and bemused at the naivete of your past self. But this is Chicago, and someone has to make the hot dogs. May as well find out if that's you.
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