Supply Chain for Beef Hot Dogs

This annual list of the best hot dog franchises was revised and updated on February 2, 2022.

Few things are more American than the humble hot dog. Brought over from Germany in the 19th century, it quickly became a popular street food. A staple of movie theaters, fairgrounds, roadside food carts, and family dinners for over a century, it's a food that almost every American will eat at some point in their lives, and a popular option for eating on the move. In 2022 alone, 255 million Americans ate hot dogs, and this number is forecast to increase over the next few years. That creates a great opportunity for franchises.

According to the National Hot Dog and Sausage Council, Americans spend over $7 billion each year on supermarket hot dogs, and bought over 19 million hot dogs at major league ball parks in the season to 2020. Franchises appeal to yet another part of the hot dog market, selling hot dogs as a snack or a meal to Americans on the move. The major hot dog franchises are well established, most of them having been in business for decades, and in one instance for over a century. Their sticking power has shown the enduring appeal and profitability of the hot dog.

Hot dog production has risen steadily over the past five years, reflecting ongoing consumer demand. The hot dog in a bun is a food that many Americans love, and many more will happily eat because it's so convenient. The meat processing industry has built a sophisticated supply chain just to provide these products to retailers at a low price. It's mass market meat, rather than a delicacy, something that appeals to America's egalitarian culture and busy consumers. It's particularly popular in New York, where the quickly made sausage in a bun is the perfect food for a busy city.

The COVID-19 pandemic inevitably caused some problems for hot dog vendors. Many had to close up business due to measures to contain the spread of the virus, and the lack of people moving around towns hit all fast-food vendors. Costs to stay open increased, not just because of hygiene measures, but because of supply chain issues. Meat processing plants were particularly vulnerable to outbreaks of COVID, leading to shutdowns, a shift in the balance of supply and demand, and so increases in the purchase price of processed meat. Staff shortages drove up wages, a trend which looks set to continue into the post-pandemic economy. Being a hot dog seller became a pricier prospect.

Despite this, the pandemic wasn't a terrible time to sell hot dogs. Fast food sellers were better able to keep some business going during restrictions and were quicker to reopen than sit-down restaurants. During the initial stages of shelter-in-place, there was a significant surge in hot dog sales, as people sought familiar, comforting food that brought a reminder of life outside the home. Drive thru and delivery sales were able to continue, a boon for some franchises, and low staffing requirements let them keep going when some staff were locked down. Though footfall traffic from people at work fell, that has largely returned since, and those people are more likely to take out than to eat out during their breaks. The casual nature of hot dog eating is a big advantage in 2022.

As the country recovers and the economy continues its return to some sort of normal, hot dog sellers should see their costs stabilize while their profits return. Within the supply chain, the costs of meat are expected to go back down, though rising wages for processing workers will absorb some of this.

Relatively low costs for the basic foodstuffs and relatively high markups mean that hot dog franchises have strong profit potential, but location is crucial to success. Hot dogs are primarily an on-the-move food, and an outlet needs good local foot traffic, preferably from busy people, to provide a customer base.

With its iconic American image, there's something about the hot dog that will appeal no matter what else happens in the world, and that has given these franchises real sticking power.

The Top Hot Dog Franchises of 2022

1. Sonic Drive-In

Sonic Drive-In started out as a hot dog stand but soon evolved into a full drive-in concept where customers dine on made-to-order fast food delivered to parked cars by carhops, often on roller skates. Maintaining a connection to its hot dog stand roots, Sonic offers three signature hot dogs, including the Footlong Quarter Pound Coney, the All American, and the Chili Cheese Coney.

The menu also has cheeseburgers, breakfast burritos, chicken sandwiches, boneless chicken wings, jumbo popcorn chicken, chicken tenders, lots of snacks and sides, milkshakes, ice cream cones, and sundaes.

Founded by Troy Smith in Shawnee, Oklahoma in 1953 and franchising since 1959, the number of locations has held mostly steady in recent years and currently stands at 3,534 (up from the previously reported total of 3,525), of which 311 are company-owned and all are located in the US.

2. Wienerschnitzel

Wienerschnitzel, which claims to have the world's most wanted wiener, has 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 much in recent years and currently stands at 330 (no change from the previously reported total), of which none are company-owned and all are located in the US.

3. Nathan's Famous

Nathan's Famous is the granddaddy of hot dogs on this list, having been founded over a century ago when the Coney Island hot dog stand sold its dogs for just a nickel. The famous hot dog stand in the iconic Coney Island amusement park has had some very famous regular patrons over the years including Cary Grant, Jimmy Durante, and even the famous gangster Al Capone (aka Scarface).

An essential part of the Nathan's brand is its annual hot dog eating contest held every July 4th in which the person who downs the most dogs gets the Mustard Belt. The 2022 winner in the men's contest was Joey "Jaws" Chestnut, who racked up his 12th title by stuffing down 71 dogs. For the women, Miki Sudo won by downing 31 dogs.

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 and 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 a peak of 320 in 2022 down to 189 in 2022 but has since bumped up to the current total of 194, of which four are company-owned and 25 are located outside the US.

4. 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, which is currently being taken down and rebuilt. Patrons have the choice of a Nathan's Famous all-beef hot dog, turkey dog, or veggie dog that is dipped in the Party Batter (based on the corn bread 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 59 (down from the previously reported total of 62), of which 38 are company-owned and two are located outside the US.

5. Dog Haus

Dog Haus is bringing the "better burger" movement to hot dogs in a more upscale, trendy approach to hot dogs that includes craft beer and craft cocktails created by celebrity mixologists. The chain's all-beef dogs and handcrafted 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 48 (up from the previously reported total of 35), of which one is company-owned and all are located in 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.

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Source: https://www.franchisechatter.com/2018/06/23/best-hot-dog-franchises-of-2018/

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