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Canadian Hot Dog Cart Business Manual
Starting your own hot dog cart concession business can be very rewarding and enjoyable as well as profitable. However, like any important endeavour, it should be done with some careful forethought and preparation.
This manual can also be used as a general guide for setting up just about any mobile food concession business including ice cream stands, pretzel stands, popcorn stands, and so on.
The first step is to learn about the business and what is required. This will help you make your final decision whether you want to get involved. It will also help you to count the cost before you invest a large sum of money and a bunch of time and effort. This manual will help you to take these first steps.
A little bit of leg work will be required on your part. You will need to make some calls and check the local municipal laws and requirements for food vendors and small businesses. You will need to check with the county health department to determine the exact codes for your area and ensure that you and your vending cart are equipped to meet these. You will need to find a good location for your cart. Finally, you will need to tally up the costs to see how much money you will need to get started, especially if you are financing your cart or taking out a business loan or line of credit with the bank.
In fact, we can lay out the way to start a hot dog cart business in Canada into 8 basic steps:
- Check Local Laws, Obtain Required Licenses and Permits.
- Check the Local County Health Codes, Obtain a Permit and Training.
- Find a Good Vending Location.
- Select a Suitable Vending Cart.
- Make the Necessary Financial Arrangements.
- Order Your Cart or Concession Trailer.
- Register Your New Business.
- Learn to Operate Your Food Concession Business.
Let’s look at these steps one at a time and go into them in detail.
Step 1 – Local Laws, Licenses and Permits
You will need to check with the local municipality regarding obtaining a business license for food vending. This can usually be done at city hall or even on-line at the city’s web site. Business licenses vary considerably in cost for different types of business and in different cities. Look specifically for the license cost for mobile food vending, sometimes called itinerant food vending. This is not the same as a full fledged restaurant. This license is usually grouped in with chip trucks and mobile ice cream vendors.
At the same time you will need to investigate the by-laws concerning food vending from a hot dog cart. Many cities restrict where and when you can sell food. They may also restrict what kinds of food can be sold. They specify what you can and can not do in the course of conducting your food concession business. They may specify that you provide certain equipment and services such as a garbage can for waste and sinks for washing your hands. They will often also specify what you can not provide such as seating and tables for your clients. Be sure that you are clear on these and ask questions if you do not understand. The city employees are usually friendly and helpful when they are treated kindly and with respect.
You may also need a location permit if you will be selling on the street, in a park or another city owned location. This will also cost an additional fee, and is often in excess of the business license. If you plan to cater to sports events, festivals, private parties or other irregular venues, a permit may be required for these as well.
Once you have investigated the local by-laws and licensing requirements, you should know whether it is possible to start a food concession business in your area. You should also have an estimate of the licensing costs. You can proceed to the next step.
Step 2 – Meeting the Health Codes
Food is a heavily regulated commodity. This is because there is such a potential for danger to the public if it is not handled and prepared safely. These laws vary, however, all across the country, and sometimes even within the same province. The local county is responsible for public health including food safety. For this reason, you will have to investigate what the local county health code specifies for mobile food vending in your area.
A hot dog cart operator is considered to be a professional food handler. This is because you store, prepare and sell food to the public. Even reheating hot dog wieners for sale is considered preparing food. The health department oversees four areas that will affect you as a future food handling professional: training, equipment, types of food allowed, as well as the health permit.
Food Health Training
The local health department may require that you take a brief food safety training course. This course may last anywhere from ½ day to 3 days in length. It will give clear instructions on how to handle and prepare food safely. Topics will include the importance of personal hygiene such as effective hand washing, how to clean equipment and prevent cross contamination, understanding how and why food spoils, and the importance of cooking food to the proper temperature to ensure harmful bacteria are killed.
The health training curriculum may also include something called HACCP or Hazard Analysis and Critical Control Point. Do not be intimidated by this complicated sounding technical term. It really means understanding the times and places where a food health problem will occur. You probably already know and practice much of this right in your own home. We all know that certain foods spoil quickly if left out in the heat. You know that if you buy ground meat at the grocery store you must take it home quickly and put it in the refrigerator or the freezer to prevent it from going bad. The time and temperature that the meat is exposed to from the grocery store to your refrigerator is the critical control point. You know the hazard and react by keeping this time short and the temperature as cool as possible. The HACCP method expands on this to include many other areas that you will encounter in food vending and keeping track of it with a written record.
Required Mobile Food Stand Equipment
The county health department will specify what type of equipment they want you to have on hand to prepare and serve food safely. This will include things such as the number of and size of sinks on your food cart for washing your hands and utensils, the amount of fresh water needed to be held on the cart for washing, the size of the waste water tank, the type of refrigeration equipment they require, and the materials of construction used to build the cart.
The local health code may require that the food concession stand provide a trash container for customer garbage or that it only be located within a certain distance from a toilet that is available to the cart operators and/or customers. They may also specify what other items must be supplied for customer use such as napkins or cutlery.
They will specify other important details such as what type of equipment they allow to be used to reheat food and the temperatures that the food must reach before it can be served. Health departments often have a handy brief summary of these requirements. Sometimes this is available online at the county health department web site.
It is very important to fully understand exactly what equipment the local health department requires before you buy a hot dog cart. Some of the equipment must be installed by the manufacturer. It would be very expensive to have to add it later and may involve returning it to the factory and paying extra.
This also includes buying a used vending cart even in your area. Once a food cart is approved it will usually remain approved even if the health code for food stands changes. That is until the vendor sells it. Then it is often required to be upgraded to the new standards. This may involve expensive renovations including equipment changes.
Types of Food Allowed on a Mobile Food Cart
The county health department will specify what types of food that they will allow to be prepared on a mobile food stand. They will usually allow a portable hot dog cart to reheat pre-cooked wieners or sausages to be served on a bun. They may also allow the same vendor to supply hot coffee, canned soft drinks, and other prepackaged foods such as candy bars and bags of potato chips.
Because of the limited facilities on a small hot dog cart, local health departments will often prohibit a vendor from preparing raw foods. This includes raw meats and certain types of meat which are considered to be potentially hazardous foods. Raw meats are especially vulnerable to spoiling quickly if not stored, handled or cooked properly. Therefore the health authorities will usually not allow a hot dog cart operator to store or cook raw wieners, sausages or ground meat patties on the cart. Certain foods such as poultry, fish and pork are often completely banned from being served from a mobile food concession stand.
Local health regulations will also dictate which condiments can be served and how they should be served. Some areas allow condiments to be served by the customer with spoons from covered containers (such as relish, onions, or pickles) or from pumps or squeeze bottles (such as for ketchup or mustard). Other areas may specify that condiments are served only in small prepackaged individual portions. Another area may specify that only the vendor apply the condiments before handing the food to the customer.
The Health Permit
Once you are clear on what is required for your mobile food cart and have completed the necessary food safety training, you can apply for a health permit. Often the health authorities will want to see a plan of the cart from the manufacturer including its technical specifications and a schematic. They want to be sure it meets their code requirements. They may also require the cart be physically inspected by one of their food inspectors before you start your business day selling food.
Keep in mind that you may be subjected to future inspections including surprise visits from the food health inspector. Always keep your cart legal and up to code. Always practice the food safety procedures that are required by the local health authority. Failure to do so may result in your health permit being revoked and being hit with hefty fines. You would also ruin your reputation as a quality food vendor which would further harm your business.
The county health department often requires that the health permit be affixed somewhere on the outside of the food cart or kept in the cart at all times so that it is readily available on demand by a health official.
You don’t need to have the health permit or have taken the food safety training before moving on to the next step. You should, however be aware of the costs and requirements.
Step 3 – Find a Good Vending Location
Most businesses need to have a good location to be successful. They should be close to their customers, easy to find, easy to approach and easy to serve customers. This is very true for a food vending stand. In fact, it is one of the most important criteria for a successful food stand.
A good location for a mobile food stand must be located very close to a large population of hungry people. The food cart must be very visible and easy to get to. It must have adequate space around it for a small crowd to gather and for the vendor to work.
The location should not restrict traffic or block the approach to other businesses. It should not pose a safety hazard. It should be easy to position the cart daily or, if it is left in location overnight, easy to re-supply it daily.
Many large businesses are quite open to having a quality mobile food vendor locate near to them or even on their property. A retail business will see this as another way to draw customers or service their customers. Another business will see it as a means to serve their employees and keep them close by during lunch and breaks. With this in mind, approach large businesses in your area to see if they would be open to having a mobile food vendor locate on their property. Do not mention paying rent unless they ask about it. Avoid having to pay location rent if possible.
Another idea is to locate on public property such as on a street corner, in a park, a parking lot, or an area designated specifically for mobile vendors. This will usually require buying a location permit from the city and may involve a rental fee too. However, if it is in a busy location, it may be more than worth it.
Here is a list of potential location ideas to explore:
- Large Retail Store.
- Large Factory.
- Industrial Park.
- Business Complex.
- Downtown Street Corner.
- Bus or Train Station.
- Park or Zoo.
- Large Parking Lot Near Other Businesses.
- Large Truck Stop or Service Station.
- Busy Car Wash.
- Amusement Park.
- Military Base.
Some locations will be seasonal or only practical for short periods of time such as weekends or holidays. Other will be good during cultural festivals, sporting events, or other temporary gatherings of large amounts of people. Often such temporary venues are as profitable in one day as another year round location is in one week. These are an excellent source of extra income. Here are some ideas for temporary locations:
- Music Festivals.
- Air Shows.
- Sporting Events.
- Car and Boat Shows.
- Home Shows.
- Flea Markets.
- Cultural Festivals.
- Grand Openings.
- Business Anniversaries.
- Company Picnics.
A final area of income that loosely comes under the umbrella of location, is that of catering. Advertise your cart for hire to cater birthdays, anniversaries, parties, reunions and other similar events.
Having a good idea of your operating location will enable you to estimate the amount of food you will be serving each day. Lots of people means lots of food sales. This will help you to select your vending cart, which is the next step.
Step 4 – Select a Suitable Vending Cart
You will have to decide on which cart model is suitable for your location needs. Your exact needs will be a product of the following factors:
- The required serving capacity of the cart. This means how many hot dogs you will be required to prepare and serve per hour.
- The required storage capacity of the cart. This means how many hot dogs, chip bags, candy bars and drinks you will sell per day.
- The food preparation equipment layout for your intended menu. In other words, the equipment needed to prepare the food will you be selling.
- The equipment layout to meet the local health department code. This includes the number of sinks, the water storage capacity, and so on. Some cart models may not be able to meet your health department requirements.
- Finally, your financial budget. How much are you prepared to spend on a cart. A larger cart will give you more flexibility and capacity for future growth but costs more.
The hot dog cart product range varies in serving capacity. Small carts such as the Starter or the New Yorker are suitable for small traffic locations. Larger carts such as the Hummer or the A101 have more storage capacity for drinks, wieners and buns and are able to prepare more hot dogs faster. They are suitable for higher traffic locations. However, the larger carts also cost more. You will need to estimate which is the right size to meet both your location requirements and your budget. Many vendors decide to start with something like a New Yorker and move up in size to one of the larger carts once their business is established. The smaller cart can still be used for smaller venues such as catering or sold.
The hot dog carts also vary according to the equipment layout and room for future growth. The Starter Cart for instance, has little room for growth in size or optional equipment. A New Yorker, however, can be equipped with a comprehensive range of additional equipment including extra sinks, a barbeque, small fryer, extra propane tanks, and so on. The larger carts have even more capacity for options. The Stand In models have the greatest capacity for flexibility in food preparation equipment and space capacity. They can also be operated in almost any weather.
Keep in mind that the cart must be equipped to exactly suit the requirements of the local health department code. The carts are listed with a standard layout of equipment but can be easily modified with additional equipment. Typical equipment variations made to suit health department requirements include changing the size of the fresh and waste water tanks, the number of hand and utensil washing sinks, the type of food preparation equipment, and the type of refrigeration storage equipment.
Of course, the larger the cart, the higher the cost. The broader the equipment layout, the higher the cost. Our customer service department can help you price out a cart that will suit your budget. That takes us to step 5.
Step 5 – Making the Financial Arrangements
At this point you should be able to make a pretty good estimate of the total cost of starting a mobile food concession business. Here is a summary of the various costs that are involved and should be accounted for in your budget estimate:
- Initial Cost of Vending Cart including freight and taxes.
- Business License.
- Location Permit.
- Location Rent (if applicable).
- Accountant Fees.
- Health Department Permit.
- Health Department Safety Training (if applicable).
- Business Insurance.
- Initial Purchase of Food Supplies including meat, buns, condiments and drinks.
- Cost of equipping vehicle to tow trailer.
- Cost of trailer storage (if applicable).
- Other equipment needed for business:
- Cell Phone
- Garbage Can
- Cleaning Supplies
- Vending Supplies, such as paper bags, napkins, cutlery, gloves
- Cash Float
- Uniform – aprons for a week
- Advertising Flyers
- Cart Signage and Display Menu
This list may not be complete as you may have additional costs or requirements. It is always a good idea to add a 20% margin of error to this estimate to account for any items overlooked or any unforeseen problems.
If you do not have the cash on hand, your financial options for starting your business are as follows:
- Bank Loan
- Line of Credit with Bank
- Lease through Finance Company
- Pay on Credit Card
- Personal Loan through family members or friends
This cost estimate will now enable you to put together a business plan if you are looking to get a bank loan or finance the cart through an equipment leasing company. This will show the bank that you have done your homework, know what you are getting into, and are a reasonable risk for them.
A business plan is simply a forecast of your estimated costs and your income along with proof that these are reasonable and accurate. Even if you are not going to apply for a loan, such an exercise is a good idea to see if your plans are viable and realistic.
For more information on writing a Business Plan, see our sample business plan.
If you require financing, we can put you in touch with a finance company that is very familiar with our type of business and equipment, and also offers competitive rates.
If you are borrowing from friends or family, it is a good idea to put every thing down in writing in a business agreement. It should be done so that everything is in black and white and can be referred to later if there are any questions. It is not because one party does not trust the other, but rather because human memories are very poor. If it is down in writing there can be no mistake. Both parties should sign it and keep a copy. It should be witnessed by 1 or 2 non-involved parties.
The business agreement for a loan should include the date, the amount loaned, the rate of interest and compound rate, the repayment schedule, and repayment start date. It should also include a provision if the business should fail, one party dies, the cart owner becomes disabled, or payments are missed. Will the amount still be owed? Will the debt be forgiven? Will the assets be sold off to repay what is still owing? And so on.
Once you have the financial aspects sorted out, you can take the next exciting step, ordering your new food vending cart.
Step 6 – Order Your Cart
This will not likely be the first time you have spoken to our customer service team. You will have likely already been in touch with us regarding pricing and health department requirements. At this stage, however, we should carefully review with you the health code requirements for your area and make sure the cart model you have selected will be able to meet these. We will review the cart specifications with you to ensure they meet your needs. We will confirm the price and give you a delivery date estimate. A 50% deposit is required to start your order, with the remaining 50% payable before shipping.
Once your cart is ordered, use the time in between ordering and taking delivery to finalize all the other steps outlined above including taking any required food service safety training.
Step 7 – Register Your Business
In Canada, you will need to register your business with the Federal and Provincial Governments and you will be assigned a Business Number (BN). There is no charge for this. This becomes your account number with the government. You will use this to remit the Goods and Services Tax (GST), the Provincial Sales Tax (PST) also called the Retail Sales tax (RST), or the Harmonized Sales Tax (HST) in provinces which combine the GST and PST.
The government requires that you decide what kind of business you will be registered as – sole proprietorship, a partnership or a corporation. As a small business owner you will likely register as sole proprietor or as a partnership. There are often tax advantages to setting yourself up as a partner with your spouse even if they have only a 10% share in the company. You may wish to consult an accountant at this stage and pay a couple hundred dollars for some good advice.
The government also puts on some good seminars for small business owners from time to time. These are very instructive regarding taxes and business practices and they cost nothing. When you register your business, you are put on a mailing list and are advised when these seminars are conducted in your area.
Registering with the tax office means that you will be required to submit the taxes that you collect according to a schedule that they will assign you, either monthly, semi-annually, or annually. At the same time, however, you are able to claim back the taxes that you have paid on your supplies.
You will need to select a name for your business. This name can not include or use any registered trade marks or names that are subject to copyright. It should reflect well on your business. It will identify you to the government, to your customers and to your suppliers.
Step 8 – Operating Your Food Concession Business
You will need to familiarize yourself with what is involved in the day to day running of a mobile food service business. To help you with that we have prepared a Mobile Food Cart Operations Manual. Carefully read this easy to understand, plain language manual. It will show you what you will be doing in the course of a typical business day running a mobile food stand. It puts into plain language all those complicated food safety laws and shows you how to put them into practice on a food cart.