Hot Dog On A Stick Franchise Cost, Revenue & Review 2026
- Investment
- $332K – $439K
- Disclosed sales
- $420K
- gross sales, not profit
- SBA charge-off
- Under 10 loans (2)
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Hot Dog on a Stick is a quick-service franchise known for hand-dipped corn dogs and fresh-made lemonade, often in mall food courts. Franchisees run the stands, managing food prep, staffing, and counter service.
FranchiseVerdict summary · 2026
A HOT DOG ON A STICK franchise requires a total initial investment of $332K – $439K, including a $25K franchise fee and an ongoing 6.0% royalty[2]. Per the 2023 FDD, average unit revenue was $420K[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: high - issued more than two years ago
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $332K – $439K
- 54th pct Service Resta…
- Avg gross sales
- $420K
- Net sales2nd pct Service Resta…
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 50
- 65th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $332K – $439K including a $25K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $420K/year (median $416K).
- RISKVerdict B (Above average), verdict score 48/100 (higher is better).
- GROWTHPositive: net +1 franchised outlets in the latest year (2 opened, 1 closed); 4 signed but not yet open (Item 20).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- HDOS Franchising, LLC
- Parent company
- HDOS Franchise Brands, LLC
- FDD Item 1, page 10 of the 2023 FDD
- Ultimate parent
- FAT Brands, Inc.
- FDD Item 1, page 10 of the 2023 FDD
- Predecessor
- HDOS Enterprises, LLC
- Prior franchisor entity
- CEO title
- Chief Executive Officer of HDOS / Chief Development Officer of FAT
- Taylor Wiederhorn
- Incorporated in
- DE
- HQ
- 9720 Wilshire Boulevard Suite 500, Beverly Hills, California 90212
- Auditor
- Baker Tilly US, LLP
- Audited financials
- Franchisor revenue
- $1.9M
- vs $1.3M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Same owner · FDD Item 1, page 10
12 other brands on this site name FAT Brands, Inc. as parent or ultimate parent in their own FDD.
- Buffalo’s CafeB
- Elevation BurgerC
- FatburgerD
- Fazoli'sC
- GREAT AMERICAN COOKIESA
- Hurricane Grill & Wings / Hurricane Burgers Tacos WingsB
- Johnny RocketsD
- Marble Slab CreameryC
- Native Grill and WingsB
- PretzelmakerB
- Round Table PizzaB
- Twin PeaksA
Portfolio: FAT Brands
Grouped by the owner's name as each filing prints it (this page: the 2023 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Taylor Wiederhorn
- Headquarters
- CA
- Founded
- 2014
- FDD year
- 2023
- States available
- 4
Can you afford it, and what does the money buy?
Entry cost runs 21% below the typical quick-service restaurants franchise.
Source: FDD 2023 · Items 5–7
FDD Item 7 · 2023 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $25K | $25K |
| Working capital (3–6 mo) | $8K | $12K |
| Equipment, build-out, other | $299K | $402K |
| Total initial investment | $332K | $439K |
Source: HOT DOG ON A STICK 2023 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $332K – $439K
- Middle of category vs category
- Liquid capital req'd
- $8K – $12K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 6.0%
- typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of net sales |
| Marketing / ad fund | 2.0% of net sales |
| Technology fee | $840 |
| Transfer fee | $15K |
| Renewal fee | $10K |
| Inventory (initial) | $6K – $11K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 57% below the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2023 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for HOT DOG ON A STICK until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$395K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one HOT DOG ON A STICK unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2023 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $420K
- Per unit, per year
- Median gross sales
- $416K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Net Sales by outlet type and company/franchise split
- Sample size
- 14 outlets
- vs category median 19
- Range (low → high)
- $185K→$710KCited, not corroborated — printed on page 86 of the 2023 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2022
- Fiscal year the figures cover
- Source filing
- FDD 2023
- Disclosed in the 2023 filing, covering 2022
- Transparency
- 7 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $420K/year in gross sales. Revenue-to-investment ratio: 1.1x.
Fee burden
Total ongoing fee load of 8.0% (near the Quick-Service Restaurants median).
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 20.0% CAGR over 3 years across 50 units — operators are staying and new ones are joining.
Multi-unit rate
Only 13% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants medians
How Hot Dog On A Stick Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2023 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 50
- Opened
- 2
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.0%
- Company-owned
- 32
- Corporate units in the system
- % franchised
- 36%
- vs corporate-owned
- Multi-unit owners
- 13.0%
- Net growth (3-yr)
- +20.0%
- Net unit change over 3 years
- 3-yr CAGR
- +20.0%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 1
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 4
- 0.08 per open outlet · Item 20 Table 5
- Projected new
- 0
- Franchisor's next-year forecast
- Transfer rate
- 2.0%
- Owners selling to other franchisees
- Ceased ops
- 2.0%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 4 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
14 current owners across 4 states; 5 former (terminated, transferred or not renewed) listed separately.
- CA 6
- UT 4
- NV 3
- HI 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 2 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 2
- Loan volume
- $190K
- Median loan
- $95K
- 50th percentile
- Charge-off rate
- Under 10 loans (2)
- Insufficient SBA coverage: 2 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (2)
- 5-yr charge-off
- Under 10 loans (2)
- Loans approved 2021+
- Active lenders
- 1
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Six matters disclosed: one pending securities class action against FAT Brands (settled in principle for $2.5M cash + $0.5M stock); five concluded matters including Virginia franchise registration violation (settled $27,000), Shahi international MURA dispute (dismissed 2021), P&K Food Market California franchise fraud claim (dismissed 2019), Rojany/Alden securities class action (settled $50,000 individual claims), and Vignola securities class action (settled $75,000).
Bankruptcy (Item 4)
Subject: the company or an affiliate. Disclosed (Item 4 covers the last 10 years)
Two former FBNA affiliates (Fatburger Restaurants of California, Inc. and Fatburger Restaurants of Nevada, Inc.) filed Chapter 11 petitions on April 6, 2009 (converted to Chapter 7 June 24, 2011), with final decrees issued July 15, 2014.
Audited financials (Item 21)
Yes · Baker Tilly US, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Audited consolidated financials of HDOS Franchising, LLC (a wholly-owned subsidiary of FAT Brands GFG Royalty I, LLC); amounts in thousands. FY ended Dec 25, 2022. Total revenues comprised royalties $1,422K, advertising fees $460K, and franchise fees $3K. other_revenue here = advertising fees.
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 48 / 100 verdict
- 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
- 03MINORUnprotected territory creates direct competition risk; franchisees can cannibalize each other's sales
- 04HIGHHigh litigation history including development fee disputes and restaurant sale conflicts suggests franchisor relationship issues
- 05MED6% royalty on $504,890 avg revenue ($30,293/year) combined with undisclosed net income makes ROI on $331,500-$439,000 investment opaque
- 06MED15-year term is lengthy given system decline and no protected exclusivity
- 07MINORRoyalty structure lacks transparency — 'total net sales' definition not clarified (gross vs. after refunds/discounts?)
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2023 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 15 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | No territory protection |
| Protected territory | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 14 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles County, California |
| Jury trial waiver | No |
| Governing law | CA |
| Litigation count | 6 |
View Item 3 litigation summary
Six matters disclosed: one pending securities class action against FAT Brands (settled in principle for $2.5M cash + $0.5M stock); five concluded matters including Virginia franchise registration violation (settled $27,000), Shahi international MURA dispute (dismissed 2021), P&K Food Market California franchise fraud claim (dismissed 2019), Rojany/Alden securities class action (settled $50,000 individual claims), and Vignola securities class action (settled $75,000).
Items 10, 11
Training & Operations
- Classroom training
- 44 hrs
- On-the-job training
- 256 hrs
- Training location
- Corporate offices in Beverly Hills, CA and certified training stores
- Ongoing training
- Required
- Field support
- 38 hrs/yr
- On-site visits per year
- Time to open
- 6 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval; franchisee must use a franchisor-designated real estate broker
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
19 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a HOT DOG ON A STICK franchise?
The total investment to open a HOT DOG ON A STICK franchise ranges from $332K – $439K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do HOT DOG ON A STICK franchise owners earn?
According to Item 19 of the HOT DOG ON A STICK FDD, the average gross sales per unit is $420K. The median is $416K. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns HOT DOG ON A STICK?
HOT DOG ON A STICK is franchised by HDOS Franchising, LLC. Its parent company is HDOS Franchise Brands, LLC. The ultimate parent named in the FDD is FAT Brands, Inc.. Source: FDD Item 1, 2023 filing.
What is Item 19 in the HOT DOG ON A STICK FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the HOT DOG ON A STICK FDD and qualifies whose outlets they describe.
What is HOT DOG ON A STICK's franchise failure rate?
SBA 7(a) loan charge-off data is not available for HOT DOG ON A STICK (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many HOT DOG ON A STICK franchise locations are there?
As of their most recent FDD filing, HOT DOG ON A STICK has 50 total units in the United States, including 18 franchised units and 32 company-owned units. 2 new units were opened in the latest reporting year.
Is HOT DOG ON A STICK a good franchise to buy?
FranchiseVerdict rates HOT DOG ON A STICK as a B-grade franchise with a verdict score of 48 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.