Hot Dog On A Stick
Bottom line
- Total investment $332K – $439K including a $25K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $505K/year (median $482K).
- Rated MODERATE with a risk score of 66/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- System growing at 20.0% CAGR over 3 years with 50 total units — strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one HOT DOG ON A STICK unit return on the cash you put in?
Unlevered ROIC · per unit
18%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 HOT DOG ON A STICK units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$707K
on $3.5M purchase
Total debt
$2.8M
SBA $1.8M + senior + seller note
Overview
About
Franchisees operate quick-service food stands specializing in hot dogs, corn dogs, and casual fast-food items, typically in high-traffic locations like malls or entertainment venues. Day-to-day operations involve food preparation, staff management, inventory control, and point-of-sale transactions under the Hot Dog on a Stick brand standards. Franchisees must maintain brand consistency while managing labor costs and food costs in an inherently low-margin QSR environment.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 6 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Hot Dog on a Stick presents CAUTION-level risk due to contracting unit base, parent company SEC litigation, missing profitability data, unprotected territory, and history of franchise relationship disputes that obscure true franchisee financial performance.
Score breakdown · what drove the 66 / 100 rating
- 01MINORDeclining unit count (50 units, -5.9% YoY) indicates system contraction and potential franchisee dissatisfaction
- 02HIGHParent company FAT Brands facing active SEC securities class action litigation regarding financial reporting integrity
- 03MEDNo Item 19 (Average Unit Volume) disclosed — revenue figures ($504,890 avg) lack verification and profitability context is hidden
- 04MINORUnprotected territory creates direct competition risk; franchisees can cannibalize each other's sales
- 05HIGHHigh litigation history including development fee disputes and restaurant sale conflicts suggests franchisor relationship issues
- 06MED6% royalty on $504,890 avg revenue ($30,293/year) combined with undisclosed net income makes ROI on $331,500-$439,000 investment opaque
- 07MED15-year term is lengthy given system decline and no protected exclusivity
- 08MINORRoyalty structure lacks transparency — 'total net sales' definition not clarified (gross vs. after refunds/discounts?)
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
21 numbers
One-time purchase · CSV download · Validation questions included
FDD download
HOT DOG ON A STICK · FDD (2023) PDF