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Perry Dee's Personal Interview On The Hot Dog Business Secrets

Richard:

Hey guys! Welcome to How I Make a Hundred Thousand Dollars a Year Selling Hot Dogs. Today we've got Perry Belcher on the phone, and guys, I have tried to get Perry in my office for about the last year. This guy is so busy, he is always on the move that we call him Oscar Mayer because this dude knows everything there is to know about hot dogs. Luckily I was able to get him on the phone. Like I said, I couldn't get him into my office, but we have him here for a short phone interview. Let me give you a little information about Perry and what he is all about. Perry started about 22 years ago in the hot dog business. He had a bunch of, I think six or ten, stands in Orlando, Florida. Perry got out of the actual hot dog stand business. Now he consults and operates on his Presto Pups franchise, and this guy is just the guy you need to know if you are going to be in the hot dog business. Perry, how are you doing today?

Perry: Richard:

I am doing great! How are things up there in the South there, Richard? Oh, they're great! It is starting to cool off so we are all excited. Well, man, I know that you are on a short, short time frame here, and I want to get a lot of really good information out of you, so I am going to just kind of dig right in with some of the questions unless there is something you want to start out telling everybody. Ah, no. You gave me a set up that is going to be hard to live up to but I'll try to do my best. Alright. Well, Perry, let's just start out. I kind of just gave a really short intro on what you are all about. But how did you get started in the hot dog business? Well, as most good ideas start, I started out of desperation, really. I moved. I was married at the time, and I had just moved to Florida trying to look for some horizons, and my wife and I had moved about

Perry: Richard:

Perry:

seven times in five years trying to figure out where we were going to land and what we were going to do. Actually, I was driving a cab in Orlando, Florida, for the Yellow Cab Company, which is an interesting job. As a matter of fact, I used to drive a cab up and down the strip that had mainly strip bars on it. So it was a really different experience. I didn't find out until I had been doing it for quite a while that a couple of cab drivers had gotten stabbed on that same street the year before, and I just couldn't understand how I had so much business there. The reason I had so much business was I was too stupid to know that cab drivers didn't go down there. So anyway, I was driving a cab, and when my wife heard about these stories, and there was a news story about a cab driver that got hurt, she just absolutely started freaking out. But I was making really pretty good money. I was making a couple hundred dollars a day driving a cab. I didn't have a lot of skills then. I was really young, as you can imagine. You know, judging by my age now, I had to have been seven back then if it's been 22 years. But anyway, I was really young. Actually, I used to stop at this hot dog stand on a road and I would stop and get a hot dog. I got to know the guy who operated the hot dog stand pretty well. After a while I kept going and kept going and I noticed the same people there every day, and sometimes I would have to wait five or ten minutes to get my hot dogs, or whatever. It was just a guy on the side of the road with a hot dog stand. I thought, "Huh....that's interesting. That would be different." We had come to Florida with an old Ford Thunderbird. It was an old brown Ford Thunderbird. I had started driving a cab, so I had a cab 24 hours a day that I rented from the cab company, and we kept the Thunderbird. We hardly ever used it. My wife would use it to get out when she needed to go somewhere. Anyway, one day I came home with the great news that I had told my wife that I traded the Ford Thunderbird for an old hot dog stand. She was real excited. She was thrilled to hear that news since she was stranded with no way to get around, because she couldn't drive the cab. She wasn't licensed to drive the cab. She was going to be stranded with no way to get around, and I had a hot dog stand. I didn't have a way, actually I legally had a trailer hitch put on the back of the cab that I didn't own so I could pull around the hot dog stand at the first. Anyway, I got started in the hot dog stand business that way.

Actually, I had always been kind of a promoter, and I had been an airbrush artist before that, and I kind of knew how to talk to people, and I knew a little bit about locations. I ended up setting up near an industrial park in Orlando, Florida, where a lot of guys worked during the day. There were those, we called them roach coaches, these catering trucks that came around and served these guys pretty bad food. We were in an industrial park just outside of Orlando. Actually, I am trying to think of the name of the city right now, but it doesn't ring a bell to me. Anyway, we were right outside the city, and we had the cart set up there, and I opened up. It really wasn't bad. At first I really didn't make quite as much money as I made driving a cab, but it was okay. I t was a whole lot safer and I was home at night. What I was actually doing for the first month or month and a half that I did it was I would operate the hot dog stand during the day, and I would go drive the cab at night just trying to get through. But I couldn't quite make enough money. That's when it got kind of interesting. One day I worked all night, and my wife volunteered to go work the hot dog stand for a day. We were both in our early twenties then. She was a very, she's still a pretty woman, but she was just a knock-out, and it was very hot. So she went out to work the hot dog stand. I was averaging about 200 bucks a day. She went out to work the hot dog stand, and during the day it got kind of hot. She had on a t-shirt, and she had bikini top on underneath it, and she thought, "Well I'm going to get some sun while I am out here doing this." She took off her t-shirt, and all she had on was the bikini top. Guess what happened? There were almost car wrecks, but the bottom line was that the first day she did that she sold $665 worth of hot dogs. A light went off in my head, and I thought, well, if you're going to be in the hot dog business, you'd better have a gimmick. So we actually hired two girls that used to be my customers in the cab business, and I won't say what they did for a living, but you kind of know the area that I drove in. They were comfortable with the dress code. Every day I had two girls selling hot dogs, and believe it or not, we'd sell anywhere between $1000 and $1500 worth of hot dogs. We had the most successful hot dog stand by far in the city. We even made the local news, on the Orlando news affiliate there. It wasn't necessarily a good story. Some of the local conservative groups were not real happy

about our hot dog stand business. We tried to keep it tasteful but fun and did really well. I am not saying you need to go operate a bikini hot dog stand. By the way, if you do, you are probably going to make a lot of money. But I'm not saying you have to do that. The key is though, if you are going to operate a hot dog stand or be in the hot dog business, you need something that is going to bring attention to your cart, and that is the point of that story, I guess. Richard: Perry: And that kind of did it, huh? Yes, that kind of did it. That was the best one I have found so far, but you know, that business had its own set of problems too. When you have a lot of cute little girls giggling around, you're not necessarily going to get what you need done, done. Eventually we had two people working each cart. We had a girl that would kind of flag down the cars and wave to the guys as they went by, and somebody else would actually make the hot dogs and serve them while the girls talked to them. That was the way that it worked out. It was a little costly, employee-wise, but it still made more money. Richard: Well, guys, I met Perry a couple of years ago, and Perry, I hope you don't get offended, but I am really going to pry some information out of you, and hopefully you'll be as open as possible without just 100 percent giving away all of your secrets. I really want this to get packed with a bunch of stuff, so don't get mad at me if I dig too deep and ask some hard-hitting questions about how you do what you do. I am glad to tell you anything you know. I am not really in the cart operation business anymore, and it doesn't matter if I was. There are so many spots and places. I mean, anyone that operates a hot dog stand well, they're going to get all there business within just a few blocks of where they are anyway, so it's not that big of a deal. Okay, great! Perry, why don't you take just a second and pretty much tell me what is so great about this business and why do you like this business so much? It's because of how proud my mother-in-law is of me, of what I do for a living. I am a hot dog vendor, you know. I've got a brother-in-law that's a doctor, and a sister-in-law that's a trial lawyer in Washington, D.C., so Thanksgiving dinner is always a lot of fun around my in-laws, as you can imagine.

Perry:

Richard:

Perry:

No, I like the business because it is easy to understand. I mean, every body's had the experience; almost everybody alive has had the experience of going to a hot dog stand and buying a hot dog at one time or another. So people really understand it; it's not scary to them. They feel like it is something they can do. The shocker is to everybody is that they just don't realize how much doggone money there is in it. If you think of the guy selling hot dogs from a hot dog stand there in New York, well, gosh, there's a million of them! Guess why there's a million of them! Because all of those guys are making money. So the business is easy to understand. You buy some hot dogs, you cook them, you sell them, and you make the experience fun for people. Another reason is the return on investment. And I mean, I'm going to tell you later about what the cost is to get started. But I mean, if you are pinching pennies, you can get into this business for a couple thousand bucks owning everything, and if you want to partner with somebody, you can do it for less than that. There are more carts sitting around than there are people to operate them. So it's a super-high ROI business. I mean, you spend a couple thousand dollars on a cart, and potentially make a couple thousand dollars a week, and if you can do that in the stock market, then I need a number for a broker because that is just an insane return. It's five to six hundred percent return on your investment a month. When you think about it, it's crazy. The other thing is that it is quick to start. There are a lot of businesses that you can go into and they've got a lot of preparation, and a lot of rental, and rental improvements. If you're in retail or if you are in service businesses, you've got client building and all of that. The day you start your hot dog business, if you've done a great job, you can start off doing just as much business as the guy down the street who has been doing it for five years. It really doesn't matter. You can start quickly and actually kick his butt. I always do. We dominate our markets when we go into them, and we usually squeeze competitors out pretty quickly. I'll tell you how we do that in a minute. One of the big things is, and this is for me anyway, when I talk to people, a lot of them are retirees who go into this business and buy carts to go into this business, and a lot are people who want a secondary income, whatever. You are in the restaurant business, but you don't have to open unless you're busy.

I mean, when I was in the business before, if I just had a bad day or it sucked, I just hooked up my little cart to my trailer, or my cab or my car and go home. It's not something you absolutely have to do. If you get up in the morning, and you don't want to open the restaurant today, you just don't hook the restaurant up to the truck and take it down the street. Richard: Perry: You're not sitting there with a $2000 note you have to cover for the month on rent. Right. So if the fair is in town and everybody's gone to the fair, or everybody's at an event, or it's just a bad time of the year or whatever, or it is back-to-school week which always kind of sucks. Everybody spends their money on school supplies. Take that week off; go do something fun and don't worry about it. The great part of this business is that there is almost no downside; there is only upside. There's darn few businesses that you can say that about. I always say, and it's my motto, I've been saying it for years: "Nobody ever went broke selling hot dogs." I mean, you almost can't go broke unless you are just incredibly stupid. You'd have to go out of your way to screw it up. Now is there a limitation to how much you can make based on your skill? Of course. But the ability to lose money in this business is almost nil. It is an extremely low-risk business. Richard: I wouldn't think it would be hard to get rid of a bunch of hotdogs, you know, if all you have got to do if you make too many is to find some hungry people, right? Yes, and that's what I've done before. If I decided to go home in a day, and I had ten hot dogs left, I'd find the next ten people that came by that I was close to and I would give them one and say, "Hey! Have you ever tried one of my hot dogs before? I am about to leave, I've got to go home and do some things. Come here and let me make you one, and you're going to love the way this tastes. I'm going to give you this one, and this one's on me because I know I'm going to see you tomorrow." You empty out your inventory real quick, you pour out your water and you're gone. There aren't too many days that end badly, but sometimes they do. Sometimes weather affects you. Sometimes your mood just sucks, I mean things outside your control.

Perry:

The other thing that over years I've found and this is another thing that people don't think about the hot dog business is that they are easy, easy, easy, easy, easy to sell. You can always sell them for multiples of what you've got invested. I'd say that the average hot dog stand business right now sells for anywhere between $12,000 and $25,000. Richard: Perry: Oh, wow! You're not talking about the actual hot dog. You're saying you build your business, and you just turn around and sell it. Yes, and you can build it in a pretty short period of time. People don't realize how many people retiring from the post office or retiring from their jobs or get a windfall somewhere on their taxes or a relative that passes away or whatever and decides, "Man, I want to go into business, but I want to go into something safe, easy" ­ and this is the big thing ­ "easy to understand. I want a business that is easy to understand. Well, I understand hot dogs." Everybody understands hot dogs, and if you can show them that, "Hey! I've got a hot dog stand business that is making three or four hundred dollars every single day net profit, and I want $20,000 for it," and if you compare that with they're talking about going and buying a franchise somewhere that's thirty or forty thousand to get started, and the franchise being another hundred thousand dollars to open a door on a cheap franchise, or buying out another business that is very complicated to do, they don't understand. This is crazy! These things are so easy to sell, it's insane. I would even really recommend that people start their carts with the intention of selling them. Keep good books and records, and make sure you keep all your licenses together because it's going to be super easy in as little as six months. If you can show six months' track record to most people with hot dogs with an investment of $10,000 to $25,000, they'll buy them blind. I mean, the last one that I sold, I had three people in my office. The last hot dog stand that I sold that was operating, I had three people in my office the day after I ran the ad in the newspaper, and I almost had a bidding war over who was going to buy it, and it closed the very next day for $25,000. Richard: Perry: Couldn't have been a bad day! No, well, it wasn't a bad day, but it was a great investment for the person who bought it. It really was. The guy was leaving a career

where his job had been downsized; he was out of a job. He didn't know what he was going to do. He had a golden parachute; he had some money that he had in savings, and he got some severance pay. I know the guy well; he's been a friend of mine for a long time. Now he operates three carts. He's making $150,000 a year in the hot dog business, and he plays golf all day. He never goes to the hot dog carts. I'll kind of explain how I do that and how that is pretty easy to do. I think everybody should start out operating their cart. I don't care if you are coming out of a Fortune 500 company and think you are a doggone genius. You need to start off operating so you know what your trends are, you know how much money you should be making, so if things start coming up short or weird, you know how to identify that. I think you need to spend a few months operating your cart no matter who you are when you start. The bottom line is it is really easy to duplicate the business, and we have three different models that we use to do that. Richard: Wow! Well let's talk about something that you touched on with your friend and I know that everyone listening really wants to know: how much money can you really make in the hot dog business? I know it sounds like great money, but is there a bottom? Is there a top? Give me some figures. Well, I'll tell you first of all before I do that, I'm going to give you samples of what I've done before. I can't tell anybody their laws; I can't tell you how much money you're going to make. All I can tell you is my experiences that I have had before. I can tell you that for me, I have always had a threshold of $500 per day. If I could not sell $500 per day on my stand, I figured that my stand either was in the wrong place, or I was doing something really wrong. Believe it or not, that's not that much; it's about 100 or 125 customers a day. If you are in any environment where people eat lunch where it's a busy environment, to sell 125 lunches is absolutely nothing; it's simple. Hot dogs begin to sell earlier than normal lunches do, too. I used to try to open my hot dog stands up around ten in the morning. I start opening at around ten o'clock, and I would usually close and go home at about 3 o'clock or 3:30 in the afternoon. Now it depends on where you are at. Sometimes if you are in a metro area, if you are downtown, you may want to stay open until 6:00 at

Perry:

night and people will pick up something to take home at night, especially if they are commuting, taking a train or the subway back and forth to home. In industrial parks, most of the guys take off to go home at 3:00 or 3:30, and you can sometimes catch a rush there, too. It kind of depends on the market. Being a hot dog vendor is not a really hard job. You're talking about, for the most part, about a five or six hour work day most of the time. Again, I average about $500 per day in sales, and that is the baseline for me, but I have gotten pretty good at this over time. When you start out, if you're doing $300, you are probably not in a bad location. You probably just need to tweak some things up. If you get everything really running on all eight cylinders, you should be grossing probably $500 or so per day. Cost of that will usually run me about $125, leaving me about $375 per day in profit. You got the math there. Richard: Perry: Man, for a five hour work day, why would anyone do anything else? Yeah, you can pretty easily make a couple grand a week, and those are in moderate locations. Those are not killer locations. A lot of people go for the killer location, and the problem with the killer location is that you are not the only one who knows it's a killer location. There are a lot of places to find little honey holes that people aren't looking. When I was in Memphis, one of my big honey holes was outside the Federal Express Hub. It was not a great part of town, and nobody was around there. Because there was nobody around there, there were not a lot of franchised restaurants. There were not a lot of McDonalds and Burger Kings and a lot of other competitors around there, and you had 6,000 guys busting out of the gate to go to lunch every day. Richard: And lunch hours aren't getting any longer. You can't even really call them a lunch hour anymore. Most companies are giving, what? Thirty minutes? It hurts your business model anyway. Even if you've got an hour, if you can find an isolated area, like one time we operated on an island where they had a lot of chemical plants. On that island there are probably 15,000 workers that work on that island, and there is no place on that island for anything other than big industrial buildings. And there are no restaurant facilities and no retail facilities.

Perry:

So we have two carts on the island that serve the island, and everyday I pull in $1,000 to $1,500 just from those two carts, or I did when I was in that. Those have long since been sold, but I was pulling in $1,000 to $1,500 per day off those two carts operating. Even if somebody got an hour lunch and they wanted to leave to go to lunch, the problem was it was 15,000 people trying to get off an island at the same time at lunch. It was a nightmare. So it would take you ten or 20 minutes to get off the island, ten or 12 minutes to drive to somewhere else to eat, and then 15 minutes to get back. So you only had 15 minutes to sit down and eat your lunch. So it just really wasn't worth the hassle for most people. Anyway, profit between $300 and $375 per day. At events you can make a whole lot more money. We'll talk about events in a few minutes. Events are a different kind of business model because you are going to have to share your revenue with somebody else: the event promoter, the facility, or somebody else. They're going to want a piece of what you do, and it is usually somewhere between 20% and 30%. The other thing that I will touch on here, too, is that all of that has to do with weather. Weather is a factor in this business, and it is not a factor in a lot of other businesses. If the weather sucks, the hot dog business sucks, for the most part. Unless you are in some sort of a sheltered environment, and even then, even if you are under a canopy or if you are under whatever, people like to buy hot dogs on nice, clear days for whatever reason. It just goes along with the experience or whatever. It seems like if it is rainy, people are in a hurry. They just want to get out of the rain and get into their building or get into their cars, and they typically won't take the time. Richard: That makes a lot of sense. Well, looks like, man, the hot dog business is the business to be in. You're kind of telling us that you've got a baseline of $500 a day, and that usually costs you around $125 to sell your $500. Could you take a few minutes to kind of break down your cost and your cost versus profits a little bit more? Yes, I will. The hot dogs that we use, I'll talk about the brands that we use in a minute and what we buy, and we buy a really good hot dog, and I suggest that you do that. In this business, after you have been wherever you are at, like I said, when you start your cart, if you do $300 a day, take it easy and chill out for a little while. Even maybe if you do $200 a day, take it easy and wait for a little while because the secret of this business is when you are there for even as little as a few weeks, you're going to start to see a lot of the same faces every day. You have acquired that customer one time. You spent

Perry:

the effort and the time and the energy to acquire that customer one time, and they are going to come back and buy from you until they have a bad experience, and that is the key to remember. So you got to always keep that happy face on and make the experience fun. About half of the hot dog business is about the experience of buying the hot dog from a hot dog vendor. You can go into a convenience store and buy a hot dog, right? But you've got to fix it yourself, and it kind of sucks, and it gets old. The experience with a hot dog vendor is it's kind of a nostalgic throw back kind of thing, and people just really like it, and you've just got to make it fun. You were talking about cost: we usually spend about 20 cents on a hot dog: somewhere between 16 cents and 25 cents, depending on the strength of the yen. I'm kidding, but the average hot dog runs anywhere between 16 cents and 25 cents. We've got several brands that we like using, but I would say stress using all beef hot dogs, and I'll talk about brands and the availability of those in a minute. Buns. A great bun can cost between 10 cents and 12 cents, and you want a great bun, and Bunny Bread, or Wonder makes the best buns out there. Those are the ones that people like the most, you know, the soft ones, the really nice buns. Don't go into some cool, whole wheat whatever, unless you are in California. If you are in California, people won't eat hot dogs anyway. I'm kidding. But the nouveau health nut is not going to stop at your hot dog stand, so don't try to be all things to all people. When people stop at hot dog stands, they want a good beef hot dog on a soft bun with all the junk on it. That's want you want. Packaging and condiments are going to cost you about three cents, energy is going to cost you a penny to two cents, and then commissary rent can be anywhere from four to five cents a hot dog. You've got to have, in a lot of states, and some states don't require this, but most states require that if you have a hot dog cart, you have to have a commissary partner. You have to have a place where you can go prepare your condiments and pre-cook your hot dogs, and then clean your utensils at night, because they don't want you to just take it home and do it in your kitchen sink because there's no control over that. That freaks a lot of people out and keeps them out because they think they have to go out and rent a big commissary space. I have rented commissary spaces. If I were operating ten or twelve hot dog carts

somewhere in a geographical area, then I would want to own my own commissary space because it is pretty easy to do. You just need a three compartment sink and a few things to meet the Health Department requirements, and that's a commissary. Floor drains are the most expensive part. But for the most part, you just don't have to do that. I'll tell you in a little bit how I get around all of that by finding a commissary partner, and nine times out of ten, I'll get my commissary partner to let me use their restaurant facilities for free. If you don't know where to look, you're not going to figure that out. But if you know where to look, it makes a lot of sense. So the total costs about 40 cents a dog. That's what I usually have invested in a finished dog. And that's a top-quality hot dog, and that's going to be a great hot dog experience for somebody. I usually sell my hot dogs for $1.50 a piece, and everybody who bought a hot dog or two is going to have a Coke or a soda. Soda's going to be about 24 cents to 26 cents, so let's just say a quarter wherever you buy them. Always buy your cokes at a supermarket or Sam's or some place like that because they are always cheaper than buying them through the distributors. The distributors deliver them for you, and they charge you for that convenience. So I am going to make 75 cents or so on a Coke because I am going to sell them for a dollar. A lot of the hot dog vendors are going to tell you to sell them for 75 cents or you know, whatever cents a Coke. Anymore, in the economy that we are in, unless you are in somewhere that has a depressed economy, nobody cares about a dollar. I always kid my people and say that a dollar is the new quarter. I mean, people don't really care. "Give me a Coke. How much is it?" "It's a buck." "Thanks." And they walk away. A buck. "Give me a chip. How much is it?" "A buck." "Thanks."

I charge a dollar for chips, and a dollar for cokes. They each cost me about 25 or 26 cents a piece. So if a customer comes up and gets two dogs, a Coke, and chips, I have a package price at $4.50, but if they buy them separately it's $5.00. In the package I run about a 70% profit. If they buy them separately or smaller packages, I run an overall 77% profit, so I usually average about a 75% profit in my business overall. So you're looking at about a 75% profit on every dollar you take in, so if you are taking in $500, you are probably going to profit ­ that's before rent if you have any rent, and in a lot of places I don't have rent. Hot dog stands are a convenience, and if you learn how to present it that way, to wherever you are going, most of the time you won't have rent. Like in the industrial parks, I get free rent in every industrial park that I am in because I go to the owners of the buildings and say, "Hey look. You've got 300 some employees here, and they can do one of two things. They can either cut out of here at lunch and probably not make it back in time, and you're going to lose productivity, or they can walk out front and get one of my killer hot dogs, and I'm going to treat them right, and they'll be back at work in thirty minutes. Now, I would like to set my hot dog stand out here in front of your building if you don't care." Nine times out of ten I get free rent that way. Richard: Perry: Man, that is smart for everybody involved. Yeah, it really is. But you've got to present it the right way. If you go in asking like you're a beggar, "I sure would like to set my hot dog cart in here and make some money," the guy's going to tell you to hit the road. If you present it to the person in a way that is good for them, then you're probably going to do really well. Richard: Wow. Okay. So it's kind of easy to see how you can take a stand and with just a little effort pop out $500 a day! Tell you what, now I want to know, if there's one single little nugget, what's the biggest thing that you need for success in the hot dog business? I would say there are three major things you have to know in this business. Location, location, and location. It's an old saying, but it's absolutely true. Now, you can screw up the best location in the world

Perry:

with lousy service and bad food, don't get me wrong, but let's assume that you're a pretty friendly person and you're going to make a good product. You can do all that and my buddy says "You can't save souls in an empty church." It doesn't matter how good of a preacher you are. If you don't have people, it's not going to work. And you've got to have your kind of people. We were talking about California. I've got nothing against California. I love California, by the way, but if you're in a community where you've got a lot of health nuts or health freaks, they're just "I want bottled water and a water chestnut salad." Then the hot dog business is not going to work very well. But I've seen hot dog businesses kick butt in Malibu, California. It just depends on the placement and where they're at and how you're pitching them. There are fun places to sell hot dogs, like baseball parks and people know about that. We'll talk about venues in a second. But really, I've made the most money in this business in industrial areas, places where nobody else wants to go. If you go down and look at your places in town that have warehouses and factories and stuff like that, nine times out of ten, they're not in the best part of town. I'm not saying you want to go somewhere that's dangerous, because you certainly don't want to do that because you're handling cash. Most of the time, I've never had a person bother me because they figure, you're selling hot dogs, you've got to be broke, right? They have no idea how much money you can make in a day and how much money you have on you. We'll talk about those cash controls. Industrial parks really work the best for me for long-term stability. There are other places you can get better spikes, but around these industrial parks where you've got a bunch of warehouses, and some of them have as many as one I'm thinking of right now, where there's about 400 warehouse spaces in it, and probably each place has 20 to 30 employees. So you're talking about 8,000 people. It's like a little sub-city. Where it's at, they build them out of the way because the land's cheap. They build them in undeveloped areas because the land is inexpensive. So there's nothing around for 15 or 20 minutes except one little diner and my hot dog stand for 8,000 people to eat at unless they bring their lunch. And again, my rent there is totally free. A lot of times you can get a roadside permit. It depends on your state. If you don't have somebody that wants to be cooperative with you, you can get a roadside permit and set up on the side of the road. But most

of the time I don't find that necessary. I've always found it really easy if I've gone into one of the businesses and say that little pitch I was talking about before. It really works well. That's my favorite. That's my honey-hole and my secret. I really suggest people who want the lowest risk start there first. You've probably got the highest level of success there. Now, if you for whatever reason just hate dealing with blue-collar workers and good old boys and whatnot, the other thing about bluecollar workers is, normally speaking, they're hearty eaters. If you're in a downtown area, and I do well in downtown, too, but you've got office workers and you've got college boys in their Brooks leather suit and a white suit, don't want to get mustard on it and they've got ladies in nice dresses and they don't want to be seen eating hot dogs. It looks tacky, maybe. Even if they are into what you're selling, they typically don't eat as much. I'd much prefer customers that are big old six-foot-four-threesandwich-eating boy from out in the sticks than some tennis player from the college team that's now working at the bank downtown. I'm going to make three times as much money in a week off that big old country boy than I am off that lawyer or that banker. Downtown locations work well just usually due to the intense amount of foot traffic. The thing with industrial locations is different. You've got to have a place for people to pull over in their cars in a lot of places. But if you'll run out and get it for them and bring it to their car window if you've got the time to do that, you may need to people to do that, man, people will pull up. You'll get a reputation for that. "Hey, get me a couple dogs and a Coke." If you put them together real quick and throw them out the window, it's just like Starbucks. If you learn people's names, say "Hey, Jimmy, how are you doing? You want two with slaw, right? Yeah," and you know their order, you're going to be their new best friend. Just make it a little fun for them, and you'll enjoy it. The other place that I do really well are schools and universities around college campuses and around even some high schools. You have to be careful with high schools because there are a lot of people who are really protective around high schools and what you can do, but normally right across from those high schools there's a little convenience store or something there that you can go and make a deal with to set on their lot.

We've got one across from our high school in which the cart's in a used car lot of all the funny places. But you just have to go in and convince somebody that, "Hey, you want to draw some people to your car lot, why don't you let me put my hot dog stand in the front of your car lot?" And the only way to drive in to get a hot dog is they drive onto the lot. Richard: Perry: Richard: Perry: That makes all kinds of sense. You hear it on the radio every weekend. Guess what they pay for rent? I'm going to go ahead and say nothing. Nothing. I'll tell you, zero. Because I show the benefit of foot traffic, and it's absolutely true. On that car lot, I promise you that my guy there probably sells about four or five cars a month because people pulled onto the car lot to come get a hot dog. If you present it that way rather than saying, "Hey, how much would you charge me to set up on the corner," their thoughts are immediately going to go to money. You can't possibly pay that guy as much rent as he's going to make with parking a car there that he sells if he makes a couple thousand dollars on a car. You've got to get that idea out of your head completely. You've got to approach it from a completely different angle. "How is my hot dog stand going to help your business?" Universities, typically speaking, I hate to say that they're difficult to deal with, but they're usually difficult to deal with. If you're going to be oncampus, you're going to have to share your revenue with the university and you're going to have to go through a ton of red tape. I've done it before and it's worth it, usually. Usually you'll do a lot of business, but on-campus students have a lot of options, too. There are usually a lot of food options around the campus. I like finding spots in parking areas in universities. This is the great place for a hot dog stand. It's a super place for a hot dog stand. If you find a parking lot anywhere, a paid parking lot, it's a big nugget. Richard: Perry: So you're talking about like a non-university-owned lot. Right. A non-university-owned paid parking lot. Almost every university has them. They don't get any more for the parking spot at the very front of the parking lot next to the street than they do for the spot all the way to the back, right?

Richard: Perry:

Right. So if you figure they're getting five dollars a day to park a car there, the most revenue that that parking lot owner can generate out of that spot is $150 a month if somebody parks there every single day, right? Your math sounds pretty right. So if you go and see the parking lot guy and say, "Hey, I'd like to set my hot dog stand up here on the corner of your parking lot, and I'll pay you $300 a month," and you already have calculated in your head, that's twice as much money as you're going to earn from this spot this month. "And I'll tell you what, have each of your parking lot operators come over to me every day, and I'll feed them lunch every day. Again, they're not leaving. They're not leaving. That way they don't have to leave, and you don't lose revenue from people parking there for free. And I'll kind of keep an eye out for you. Again, back to the benefits. Why are you here other than the revenue? That's always worked pretty well for me. Events are really good. I have a lot of people that I know that are in this business that only do events. They only go to where there are massive amounts of people at a time. I've done events. They're not my absolute favorite, just because I'll at least have tried to build this, run it like a business on a daily, weekly, monthly consistent revenue because I want to sell it. It's very difficult to sell a business that has to do with events because it spikes. Your income is going to spike and it's going to fall based on the success of the event. But if you want to do events and you've got an extra cart setting around, that's a way I've always done it. Usually I always have two or three carts setting around, extra, and if there's a big event and I can hook up my cart and go down and sell $10,000 worth of hot dogs this weekend, then I'm all for it. But you need to know that that's hard work, it's busy, you're going to bust your butt, but you will probably make a lot of money. I always say that I can sell a hot dog to every third person if I've got a great spot in an event. So if an event brings in 3,000 people, I can probably sell 1,000 hot dogs over a weekend. Now, when you get into great big events, you can't calculate that way because you don't have enough, unless you've got multiple carts

Richard: Perry:

Richard: Perry:

spread out through the event. But if you're doing a small festival somewhere with 2,000 to 3,000 people and you're at an entry point where people come in and they enter and they exit and they have to pass by you, you can probably sell 1,000 hot dogs. In events, the standard is, you have to pay the promoter a percentage of your gross sales. Usually it's between 20% and 30%, depending on what you can negotiate. But the good news is you don't have any base rent usually. You just come in and set up and whatever you sell, you pay a percentage of. So again, there's still no risk. If you want to buy a new set of golf clubs or a new motorcycle or if you're trying to make ten grand over a weekend because you've got some big event and you're willing to bust your butt, this is probably worth the time and the effort. Lastly, our venue contracts, which are a lot like events. These are how hot dog vendors sell hot dogs at the Yankees games and at the different ball parks and different Nascar events and great big events like that. I've got a couple friends of mine that are in this business. I know about it, I've never done venue contracts before. I've helped people with venue contracts and I've worked with them. Venue contracts, basically are just a big business. You really have to be willing to take a lot of risk, and that's not my game, but if you are willing to take a risk, here's how it works. You basically go to a venue and you estimate how much traffic they have and how much they're going to have for a year, and they take bids every year. So with the hot dog vendor at Yankee Stadium every year or two years, they have a contract meeting, and they say, "You're the hot dog vendor, we're going to put your hot dog contract up for bid," and then you'll come in and bid and say "I'll sell all the hot dogs here and I'm willing to pay $500,000 or $750,000." Usually up front, to have the ability to sell hot dogs. That sounds like a lot of money, but there are some major corporations out there that do that every day, and actually the hot dog business is a multi-billion-dollar hidden industry. How many hot dogs do you think get sold in major league baseball parks every year? Richard: Perry: I can't even come up with that number. I just told you they cost around 40 cents a piece to deliver, and the average price of a hot dog right now in a ball park is $4. So there is $3.60 profit in every hot dog that they sell. So your profit is a lot higher there, with risk, though.

Richard:

Perry:

It's a lot higher, but basically, your profit's a lot higher, but not really. In one of those ball parks, they're probably paying $1 to $1.50 per hot dog, three or four times the cost of the hot dog back to the park, and they're doing it in advance. So if the Cardinals have a bad season this year, you could kind of take a heater. But that's the way those venue contracts work. Now if you want to downsize that a little bit, there's a lot of money to be made in venue contracts, and this is where I have made money in venue contracts. Places like amateur baseball parks, soccer fields, boys' club sports parks, where you're going to have a lot of parents who want in on it. If you go in there willing to pay $10,000 a year, up front, a lot of times you do it on just percentages. You can almost always do it on a percentage. If you want to go and say, "Hey, I want to come sell hot dogs here and I'm willing to pay 30% of everything I sell to set up my hot dog cart." They're almost always going to let you go in. But people get drunk about money in their hand, greedy money in their hand. You may figure out, I'm probably going to pay them $30,000 this year based on my estimates and what I'm going to sell. If you're pretty sure about your estimates and you've got good math, you're way smarter. This is what they do in the big ball parks. They just do it on a bigger scale, to walk in and say, "Hey, I want to sell hot dogs at all your ball games this year, and I brought you a check for $10,000." About 90% of the time, they'd rather have that $10,000 check than 30% ongoing, because they've already thought of some way to spend that ten grand. You just saved yourself $20,000 and you end up paying 10% to sell your hot dogs than 30%. That's if you have a lot of cash and if you have the ability to negotiate that. It's not a way that I've done a lot of business in this industry, but it is the way a lot of people do business.

Richard: Perry:

There's something that kind of makes you feel warm and fuzzy about $10,000 in your hand all at once. Yeah. People get drunk about large chunks of money. They really do. Sometimes it's not $10,000, it's $5,000. So you may be paying 5%. If they had a vendor last year and he gave them 30 grand, then you're going to have a hard time pulling that off. But there are a couple reasons probably that they didn't.

Number one, if they had a vendor, he probably wasn't very truthful with them about how much he sold. That's kind of a thing in this industry. Most people are not very truthful. Let me tell you up front, if you're on a contract percentage deal, and you're not truthful with the person you're working with, that's stupid, stupid, stupid. What's going to happen is just what I'm talking about happening here. You're going to get knocked out of your contract because people are going to see you making money, and somebody's going to come along and going to knock you out of your contract. I've given them a false figure that you could have beaten if you had just told the truth. Pay what you can afford to pay and be honest about it. It's always the best policy. Pay that up front before you pay anything else. Make sure that your venue is paid, and you'll always have a happy place. Even if somebody comes along with a better deal, if you've treated people right in the past, typically speaking, they're not going to kick you out over a few dollars. Richard: And I would only think, rationally speaking, if a spot's making you $500 a day, are you really doing yourself any favor by trying to cheat out whoever your partner is over a couple hundred dollars or maybe a thousand dollars a month? He catches you, you just lost $500 a day! Yeah, but Richard, I'll tell you, most people are short-sighted. They start justifying in their mind. "I'm giving this sucker $30 a day and he's not doing anything to help me. He's no this, or he's not that." If people justify in their minds why they're going to screw their guy over, he'll never know the difference anyway. Chances are, he'll never know the difference. But he'll know the difference if I come along. Because if I'm the guy in your back door, you're screwed, buddy. I'm going to come in and tell him how much money he should be making, and I'm even willing to give him some money up front and set up standards so he knows that I'm being honest with him. I'll keep a book on my card and any time that he wants to walk up and take a look at my book and see what I sold today, I'm more than happy to show him. Richard: Perry: Richard: You're forming a relationship, basically. You're forming a relationship with trust. Yeah. Well, I've been writing a bunch of stuff down as you've been talking. I might actually go into the hot dog business after this! But what I'm

Perry:

seeing is you say location's your number one thing. But from what it sounds like, that's true, it almost seems like you have to identify and know your customer and know what you're getting into before you pick your location. With what you were saying about your health nuts versus your blue-collar workers and your guys that are looking to grab a quick bite or maybe a higher-paid executive, where they want to go out for lunch. So you need to identify who your consumer is per location. Am I right? Perry: Yeah, you do. People get on my stuff about that. "Well, I'm going to do a bunch of market research, and I'm going to write a business plan, and I'm going to do this." You know what I'm doing while they're doing all that? I'm selling hot dogs. You're making money. I'm selling hot dogs and making money. For the most part, the beauty part is, you don't have to do any research. Your research is, pull your cart out one day and see what happens. If it doesn't work, go somewhere else tomorrow. What's the worst that could happen? It's just the greatest business for testing in the whole wide world! I think I might be able to sell hot dogs here, but I'm not sure. Well, invest a day in your life and find out. That's all you have to do. So it's about location, customer service, and customer experience. Yeah, it really is. It really is. Well, as I've been sitting here jotting down notes, you said something interesting pretty early on in this call. You said that you crushed your competitors. Now, I'm sure you do, but why don't you take a second and tell me, do you crush your competitors through advertising or through sheer quality of product or quality of experience? How do you advertise? Let's just go with that route. Well, you know me pretty well, Richard. How much money do you think I spend on advertising? I'm going to go out on a limb and say it's probably not very much, if anything.

Richard: Perry:

Richard: Perry:

Richard: Perry: Richard:

Perry: Richard:

Perry:

Yeah, it's a nice round figure: zero. I've never spent the first penny on advertising. You know my saying that advertising doesn't work? Absolutely not. That's the craziest thing in the whole wide world. Advertising works. It's just in this business, because it's a cool business to be in, advertising is kind of free. You're only advertising to people. People are not going to drive across town to come to your hot dog stand. That's not going to happen. It's an impulse thing. People are going to see your sign, see your look, they're going to figure out a way if you catch their eye, they're going to go, "You know, a hot dog would be pretty nice." If they're in the mood for a hot dog. Most people are in the mood for a hot dog pretty much any time. All you've got to do is catch their attention and kind of break their attention span on whatever it was they're doing. I was with two friends of mine in Austin, Texas a couple weeks ago, and I was walking down the street, and there were a lot of carts in Austin. They have a good license law there and they allow a lot of cart vendors in front of an environment, but we were walking back from a bar, a couple buddies of mind, and we'd had several beers, and we were trying to get to our car so we could get home and fall into bed. The last thing I remember was eating something. We walked by a guy sitting on a darkened parking lot, I don't know if he bought my product, but he had rented a spot at the front of a paid parking lot. He was next to the sidewalk, where a lot of people going back and forth to bars. It's 11:00 at night, and who in the world thinks you're going to make money in the hot dog business at 11:00 at night? We're walking by, six guys, and the guy says, "Hey, man! Hey, can I get your opinion on something?" Well, I'm always willing to give my opinion, like most people are. They say opinions are like ­ well, I won't go into that story, but everybody's got an opinion. "Can I get your opinion on something?" "Sure, what?" "What's the perfect hot dog? Is it mustard? Is it mustard and ketchup? Or is it just ketchup?" "Man, I think it's just ­" I had an opinion, the guys had an opinion, and within 30 seconds, the guy says, "Why don't I make one for you that way?"

Well, you just told him it was the perfect hot dog! All right. We had no intention of spending a penny, and we walked away and that guy had $22 of our money. He did it in all of less than three or four minutes. So my number one thing would be, open your mouth, especially if you're in the proximity, or around people, wave at people. If they're driving by, wave at them! Say hi, be friendly. How many people were friendly to you yesterday, Richard? Richard: Perry, you know I'm in the South, and you're supposed to be the Southern hospitality and all that, and, you know what, every day, it's getting a little less hospitable. Yeah. That's one of the keys to this business. I'm going to tell you right now who shouldn't go in this business. Grumpy old farts with an attitude. You're not going to make any money. I can tell you up front. If you're sitting reading this right now going, "I'm gonna go sell some hot dogs. I'm a grumpy old fart, but I've got money to buy a hot dog stand and I'm gonna make some money." You're wasting your time. Your biggest asset in this business is a smile. People want an experience of buying a hot dog. They want you to be happy, they want you to smile, they want you to make it fun. If you do that, they will throw their money at you. But you've got to open your mouth, you've got to break their attention. That's the thing. You've got to stop them in whatever they're doing. That's the reason the bikini method works so well. You're driving down a road and you see a chick in a bikini making hot dogs, I mean, you're going to crash your car to find out what's going on. That works so well not just because of the sex thing, we sell hot dogs to a lot of women off those carts, not just guys. I even talked about doing a beefcake cart one time. I never did it. I still think it'd be a pretty good idea if you're in the right area to use some real beefed-up guys like the guy that does the guitar in the ­ what's the name of the guy wears the... Richard: Perry: The Naked Cowboy. The Naked Cowboy in New York. If I were going to make money with the Naked Cowboy, I'd have him selling hot dogs. I think he'd be rich. But if you can stop, there's something that's odd that makes them stop, I call it "peacocking."

Perry:

They use that term in a lot of things. I call it "peacocking." Get a big Dr. Seuss hat or something that flashes or a sequined vest that you wear. The sparkles that catch the light on a sunny day. Just something that breaks people's attention and they go "What in the heck is that? A guy selling hot dogs. Man, I think I'll stop and get a hot dog." You just need to do something that grabs the attention of the person. I've got one guy that juggles next to his hot dog cart when he's not busy. Guess how long it takes for him to get busy? Not long. Or he rids a unicycle around the cart. Somebody that does something really weird. I've got people that dress up as mimes. I've got people that wear Dr. Seuss hats. You don't have to make a total fool of yourself to be fun. Richard: Perry: Richard: Perry: Just grab someone's attention, basically. You just want somebody's attention. That's all you're looking for. You don't want to be there sitting and reading a book. Right. People don't want to interrupt you. But people for the most part don't want to walk up and go, "Oh, excuse me, I'm sorry to bother you, but can I get a hot dog?" They're not going to do it. About 60% of hot dog stands I walk by, that's what you've got. You've got some grumpy old fart reading a newspaper in a folding lawn chair that looks irritated that you stopped him to get a hot dog from him. And you know what the weird part is? He still probably makes a little money. So if you just do this business at all right, it works so well. Like balloon animals. Those are fun! I've got a guy that ties balloon animals and gives them to every kid that comes in and gets a hot dog from him from the parents. So guess what you get then? You don't sell a hot dog. You sell momma a hot dog, daddy a hot dog, and the two Junior's a hot dog for five cents worth of balloons and a little bit of time. So you get a $20 ticket, you want to tie balloon animals for $20 all day? I do! I'm totally cool with that. I'll make great money. I'll make a good amount of money. There are a lot of other things you can do, and I'll try to add some suggestions to the printouts that go with this, but there are a number of other things that you can do to catch people's attention. Just don't

make a fool of yourself or do something you're uncomfortable with, because it's not going to be fun. You want it to be fun and you want to be in a good mood. You want to make sure you do something that's good for the heat if you're outside in a hot area that's not something that's constricting and going to make you uncomfortable. That's the reason the bikini idea was so good. I got girls that hung out and got tans all day. They sold hot dogs and made great money. Those girls were making $100, $150 a day each. Richard: Perry: And it doesn't seem out of place if you're hot on a hot day to be sitting out there in a bikini. No, it really doesn't. Now since I've started that, it's been 20 years ago since I started that, there are a lot of bikini hot dog carts in south Florida and some in Orlando. I've never seen them anywhere else. Not even in Texas where it's warm and other states where it's warm for whatever reason. It's become really popular in Florida. They actually kind of went over the line in Florida where they're doing like string thongs and stuff like that, and it works, but I think we were a little more tasteful when we did it. The other things that I do, two things that I think have been really good for success, one is, when I open, if I'm around an industrial park or an office park or whatever, I say I never spend money on advertising. I don't cash advertising. I'll probably give away $500 worth of hot dogs in the first ten days that I'm open. We'll take them in foil wrappers by ten at a time into offices and drop them off with a menu and a card and tell people where we are. I'll tell you, that's been one of the greatest things that we've ever done, because people try them, you tell them why your hot dog is so much better. They try them, they love them, and the next day, they say "I've got to go to lunch, I'll go down here, I've got to go down and get my lunch. You know what, I think I'm just going to walk down there and get another one of those hot dogs." It's just easier and it's convenient, that advertising. I continue to do it over time, whenever I start to feel a slow slump, I'll go out and give out $100 worth of samples. If you figure $500 when you open is going to give you 1,200 hot dogs to give away. That's a lot of doggone hot dogs. You want to give them away to people in places with receptionists and people like that because those are what we call "sneezers" or "seniors"

in this business. Those are the people who know everybody else. You want to give them to the biggest busybodies you can find. The receptionist in an office typically knows what goes on everywhere. Or go to the plant manager and say, "Hey, I want to bring some of you guys lunch today. I brought ten or 20 hotdogs and some Cokes for you guys out here. I just wanted to let you know my hotdog stand is right down here; we're open for you anytime you want. If you've got ten or 20 guys that need something, give me a call; I'll run them over if it's early enough and I'm not too busy." That's worked out really, really well for us in the past, especially for a big kick-off. There's a restaurant in Cape Girardeau, Missouri, and they got this idea a long time ago. It's an incredibly famous restaurant called Lambert's. Have you ever been to Lambert's? Richard: Perry: Home of the throwed rolls. Home of the throwed rolls. Lambert's is a great example of how to run a restaurant with okay food. They've got good food at Lambert's; there's nothing wrong with the food. But it's nothing incredibly special; it's like a Cracker Barrel type restaurant. They've learned a secret and it's called reciprocity; it's doing something for somebody else. You walk into Lambert's and sit at a table, and before you ever order there's a guy walking around throwing rolls across the restaurant. You just hold your hand out and he'll throw one at you like a baseball, and they're great rolls. Sometimes they fall and if you drop them they don't care; they come pick them up and throw them away. But they throw these rolls around and they've become so famous for that that on an average weekend day there's a two-hour wait to get into Lambert's to eat lunch. On Sunday, forget about it; you can't even get in; there's no way to get in. The place is huge! The place probably seats 500 or 600 or 700 people. Tour buses stop there by the droves going back and forth to Atlanta, Missouri, and St. Louis and other places. It's just become a crazy phenomenon as a place to eat and it's really just because of the experience and that they gave you something for free. Nobody wants to give you something for free unless you do something. "Buy this and I'll give you a free whatever." There's almost no benefit to that. If you say, "Hey, buy two hotdogs and I'll give you a free Coke," it's a mathematical deduction; it doesn't mean anything to people. It's

not going to motivate them to buy; it's a waste of time. You're giving away money in that case. I only give away things that are unadvertised. I give away free, unadvertised bonuses. In other words, the first few times if I see you and I know you are a new customer, you come get a hotdog and a Coke and chips and I'm going to give you a cookie or I'm going to give you something special, something extra. I'll say, "Hey, I put a little extra gift in there for you; I put a little extra cookie in there for you. They're really good. My mom made them this morning and they're just delicious. I thought you might like one." "How much is that?" "There's no charge for that; it's my gift to you." "Wow! What a nice guy!" and they leave with a great experience. One of the things I've learned, we had stores called The Chicago Dog for a while where we were making Chicago-style hotdogs. We got a recipe that I'm going to include in a sheet here for cheesecake cupcakes. That's one of my coolest things. We used to take a little metal cupcake holder and put a vanilla wafer in the bottom of it and make cheesecake cupcakes. They cost me about 35 cents a piece to make and you could only get them for free. We never sold one. That was one of the coolest things that we ever did. We would have 100 of them a day and our first 100 customers that came up we would give them a cheesecake. We didn't give them to everybody; we would give them to newer customers and repeat customers sometimes. And if we felt like it, "Here, I tell you what, I've got a cupcake for you." People would ask. If they ask we would give them one if they were regular customers. We'd give away 100 of these cheesecake cupcakes a day and you couldn't buy them. So nobody knew what they cost; nobody knew what they were worth. The only way you could get it was to be a good customer. "You're a really good customer. Here, I'm going to give you one of these." Man, it just endears you in the minds of people. People don't understand that. You're a hotdog stand; you're not a restaurant. You've got to go out and do something a little bit different and make it a better experience for people to keep them coming.

That's one of the things that has really worked well for us. Richard: It seems like we keep going back and I keep hearing you say "experience." You're building experience and really you're building relationships. You might know Bob's name, but I'm guessing if Bob comes by three times a week, he probably knows your name, too. Perry: Right. That's absolutely true. You make a lot of friends in this business. There are people who work in these factories that don't talk to anybody during the day. They go in and they put Part A into Part B all day long and they go home and sit alone and do nothing. It's unfortunate that a lot of people have lives like that, but they do. You might be the only person they talk to all day or, even if they have another life, even if they have other people to interact with, you might be the only person they talk with all day that has a positive message, a positive mental attitude, a smile, and a kind word. You might change a person's life just by being a little bit nice to them. You hear stories all the time about somebody who was going to commit suicide or do something terrible to themselves or whatever, but they had an experience where somebody was just kind to them and it put back their faith in the human race. That sounds like "the philosophical hotdog guy," right? But it's true. Just a kind word goes a long way. Richard: It does. I'll tell you what, Perry, you said something interesting that you said you were going to go back over a little later. I'd like you to tell me a little bit more about finding a commissary partner. Okay. With a commissary partner, in most states, it depends on your state, if you're going to have a hotdog cart it's a portable food device. They're allowed in all states. There are different regulations based on different states, but one of the most common things is that you have to have a commissary partner; you have to have somebody who is willing to let you say, "I have my stuff that has to be cleaned here or I preprepare my food here." Typically speaking, that is a restaurant. So most everybody goes to the hotdog cart and then they go around to restaurants and say, "Hey, could I share your kitchen? Can I rent kitchen space from you?" That's been one of the biggest problems for most people in this business.

Perry:

It doesn't have to be. If you're going around talking to restaurants and asking to share space for your hotdog stand, if you own a restaurant outside where I'm going to set up my hotdog stand, what are you going to tell me? Richard: Perry: I'm not going to help you in any way, shape, or form. Yeah, and these are the circumstances. This is a great way to buy hotdog carts, by the way. People go buy a brand new hotdog cart, and I've bought a lot of hotdog carts that are brand new from people because they couldn't get a commissary partner. "I had to shut down because I couldn't get a commissary partner. I tried to do it in my house and I got caught or I didn't get a license." People try to go all around circumventing the law. They finally give up and say, "I'm going to sell my cart," and I buy it for .20 cents on the dollar. I'll have a commissary partner by tonight. I want you to take a guess; do you have your thinking cap on? Richard: Perry: Richard: Perry: I'll give it a whirl. What do you figure I pay for my commissary partner? Probably free around. It's not quite as round; it's not quite that simple. But for the most part, I never pay for a commissary partner. I found three places that nobody ever things to look for commissary partners and I've done really well with at least two of them. With the third one I've had a couple relationships that have done pretty well. Kitchens in public facilities have to be inspected just like restaurant's do by the Health Department. The very best source that I've found for these kitchens is in churches. There is almost no place you can go anymore where there's not a church on every block, and about 80% of them have a kitchen in them that has to be a food-grade kitchen because they serve dinners or lunches or whatever. They almost never use them and they're for the most part nice people. They are an underutilized asset and we try to go in there and rent them. We've done that successfully in the past where we go in and say, "Hey, I'm a hotdog vendor and I need a place to clean up my stuff. I'd like to pay you some rent to use it." That works out pretty well.

Then we found a completely different method and it works so much better and is so much cheaper. Just go to the youth director of the church and say, "Hey, my name's Perry and I operate this hotdog stand down the street. We're just a young business struggling along; we're trying to make an honest living. "We need a place to clean up and all that, and I know you've got a youth group here that meets every Wednesday night when you have your big youth meeting. Here's what I'd like to do. I'd love to come down here one Wednesday night a month and I'll serve hotdogs, Cokes, and chips to all your kids that come to youth group for free. "In return for that, all I need to do is come over here for about 15 minutes a day and wash out all my pans and clean up my stuff. Is that fair enough?" Richard: Perry: Wow! You almost never get turned down. You get a free facility. Do you know how often they inspect restaurants? They inspect them all the time. Do you know how often they inspect churches? They inspect them once every year or two years, if at all. When they do, they just breeze through them. So you have very little hassle. In each state you have to check the law; every state doesn't work like that. But in most states it does. The other place we've found where we've done really well with that same theory is day care centers. We have a hotdog day in the day care center once a month and we go in the day care center kitchen and wash up all of our utensils and stuff everyday after we finish selling. The last place I'll tell you, and we've got relationships in a few of these, is nursing homes. Those do pretty well, too. Again, we come in and prepare a hotdog lunch one day a month and we give them to them for free. We bring the cart into the center so the patients get to experience actually going to the hotdog cart like they probably remember doing when they were a kid. We make it fun for them; we kid with them and we have a really great time with it. It works out really well and we're doing something, bringing a smile to the faces of these people and it's rewarding. It works for everybody.

The one thing to remember, though, and this is really super important, I'll tell you how we did these things in partnership deals where we don't pay any money. When you're not paying somebody money, you need to make sure you remember two things. The first is to be nice. I've had more people that I've told these things to who went out and got a partner somewhere and then just were a jerk to them. They call me up and say, "Well, I lost my commissary partner. They said I can't come back there and use their kitchen anymore. They weren't running the water hot enough for me and I told them they had to fix that hot water." Well, you know what? You're getting free rent. If the water's not hot enough and it's a problem for them, call somebody and say, "Hey, I'd like to donate to the church to have your water supply fixed because I don't think it's to code and I don't want you guys to get in trouble. I've got my guy who will come do it and let me just pay for that." "Oh really? That's so nice." Do you see the difference? You have to keep the hassle factor down. The minute you're a hassle to them, then you're out. And when you're out, depending on the availability of another space you might be out! You might be really out of business until you get another partner and you certainly don't want that to happen. You can't. But commissary partners are no big deal. Everybody approaches it like, "This is going to be a big hassle and it's going to be hard." It's really not. Approach it in a friendly way and say, "Hey, by the way, I have an idea. I want to do this for you." "Wow, that sounds great!" "Oh, by the way" is great. "By the way, do you mind if I come over here in the afternoons and wash my pots and pans for a few minutes a day?" "No, that would be fine." Don't come in with a 20-page presentation for them because people start looking at what's wrong with it. The good news about being a hotdog vendor is, "This is just a little guy that sells hotdogs." They don't ever think that this is a guy who's making $100,000 a year down the street while I'm working my butt off. Richard: I'm guessing the same would kind of hold true with any partners you have in this business. If you're a partner with someone who has a construction site or a partner with someone who has a parking lot, it

would almost be the same. The second that you cause them any headache one day, your free ride is gone. Perry: Do them a favor. Every three months or so do something really nice for them. If you see their parking lot looks funky, get it restriped. You can restripe a parking lot for $100. Say, "Hey, I noticed that things are fading and looking kind of funky. I wanted to pay to have the parking lot restriped for you. You've been so nice to me and so good to me after all this time. I'd just like to do this for you, if you don't mind." Don't just do it because sometimes you'll piss people off. They may have a reason they don't like it restriped. One of the things that I've done in the past that really works out well is that I have this guy who comes and details my car. No matter where I'm at he'll come find me and he cleans my car up. Well, if I'm somewhere where I'm on somebody else's property, guess what they get that day? They get a car wash. And there isn't anybody who gets mad about getting their car washed. Richard: Perry: Richard: Perry: No. Little things like that will go a long way. Really, when you're trying to do something for someone, don't take a bunch of liberties, obviously, but maintain your relationships. Yeah, and don't suck up to them because they're not going to like that either. It needs to be something reasonable. But smaller things are good. One of the things that we do is every year we smoke hams; we do hams. I give hams out to every place that we're at. We bring hams around at Thanksgiving and at Christmas to the owners of the properties that we're at as a thank you for the year. And they expect to get food from you; they like getting food from you because they know you're a food guy. Richard: Perry: Richard: That really sounds a lot easier than I thought even from talking to you before. Never charge a partner for a hotdog, ever. That's a pretty good rule of thumb.

Perry:

Don't ever, ever, ever, ever charge them. If they get a hotdog from you everyday, give it to them gladly with a great attitude and make that the best hotdog of the day. And a Coke and a smile. Yeah. Wow, all right. Well, I'm going to ask you now some more details about what you sell and how you sell it. You say you use a premium product to make your hotdogs. What makes the perfect hotdog? What do you guys do to make just the best hotdog you can? First of all I'll tell you, the difference between a great hotdog and an okay hotdog is about a nickel. So to scrimp on your ingredients or on what you're using is just incredibly stupid. And I see people do that all the time. They buy the cheapest hotdogs they can buy, the cheapest buns they can buy, the cheapest condiments they can buy, no brand, no name stuff. Are they going to sell some? Of course! Are people going to come back consistently and buy them? The heck no! Probably not. If you're in an area where you're selling to tourists or to people at events or whatever, maybe you want to do that. But I don't even see it then; it doesn't make sense to me. I just want to give the best possible product I can get for the money. I'll go through a couple of points, and there's a sheet, a print off that comes with the course that's going to show you some of the recipes and preparation in a lot more detail. But I'm going to touch on some of the things on audio that are the most important. Number one, size matters. Oddly enough, as opposed to other things in life, people with hotdogs prefer smaller over larger and it's better for your business, too. They did a survey some time back and they surveyed a thousand people with six-inch hotdogs, like the regular sized hotdogs and the jumbo. Overwhelmingly, 70% of the people preferred the six-inch hotdog over the big hotdog. People who are hungry would rather just have two six-inch hotdogs than one eight-inch hotdog. And the thing is that you're going to make a whole lot more money because you get a buck and a half a piece for a six-inch. About all you can charge for an eight-inch is two dollars and almost nobody can eat two eight-inch hotdogs.

Richard: Perry: Richard:

Perry:

So you're going to get three bucks out of the sale instead of two, and people just like it better. It's sort of like a White Castle hamburger and a Crystal hamburger. People would rather buy three or four of those little, bitty hamburgers than one big hamburger. They just like them better. Most people like a six-inch hotdog over an eight-inch hotdog. Another big rule is that I only sell all-beef hotdogs. I make sure there are no pork products in the hotdogs. That's for a couple of reasons. One is that it's just a better hotdog; it tastes better, people prefer it in surveys. But also, if you're dealing with Kosher issues, if you're in an area where you have a large Jewish community or even Muslim community where people don't want pork, you want to make sure that you have an all-beef hotdog and you want to advertise that and let people know that. Nathan's Hotdogs are great hotdogs. They sell hotdogs prepared in a lot of Nathan's Restaurants across the country. Nathan's now is available at Sam's Wholesale Club, even at Wal-Mart, actually, you can buy Nathan's Hotdogs. The Nathan's Hotdog is probably about as good as any hotdog on the market. Sam's has some other brands, some of them premium. Just try them and test them and see if you like them. I would say to stick with all-beef hotdogs. Don't get the big hotdogs. Everybody wants to go buy the big hotdogs and it's just a bad idea. There are other hotdogs like Vienna out of Chicago and Sabrett from New York. You have to contact the companies directly to buy those, but you can buy them and bring them in by the case. With Sabretts, if you're somewhere in Florida, they are going to sell extremely well because Sabrett is the hotdog that almost all the hotdog vendors on the hotdog carts in New York City sell. It's a great hotdog and everybody knows it. If you advertise the brand, they'll give you some colored fliers and so will Vienna, that promotes their hotdogs and the fact that you're selling a Sabrett hotdog. So you kind of get some branding pushed. It's sort of like selling Starbucks coffee instead of just selling coffee. You get branding with a Sabrett dog. And Vienna is the same way, but a Vienna hotdog is a Chicago dog and most of the people who know the Vienna brand know it from Chicago; they like their hotdogs prepared with a lot of stuff on them

that you normally don't keep on a hotdog cart. Those are things like pickles and tomatoes and celery seed and a number of other things. It makes for a great hotdog, but if you're not used to it it's kind of weird. If you hand somebody a normal Chicago hotdog and they've never had one, they look at you and go, "What the heck is that?" But if you're in the Chicago area or if you're in somewhere with a lot of Chicago transplants, you probably want to sell Vienna dogs. They're all going to be about the same price. Sabretts are premium; they're a little bit more. But overall, hotdogs are relatively inexpensive. You want to keep them at about 160º. The best way to do them is to boil them. We preboil them for two minutes each in the commissary before we come out. The reason we do that is if you preboil them when you go out to the job site you just heat up your water with propane and drop them in and you can really serve them right then. It takes about 90 seconds at that point to boil them the rest of the way until they're completely done. So we're ready to go as soon as we get there, you know? And they're commissary prepared; it sounds better than just cooking it 100% there on the spot and doing all your openings. And you don't have any waste to dispose of with your packaging and all that either. Buns are a huge part of the whole things. I like Bunny. Bunny Buns or Wonder Bread Buns are the very best. They're the softest bun. People want a soft, white bread hotdog bun; they don't want any whole wheat, oat brans, or anything else. They just want a nice, soft, white hotdog bun and that's exactly what I give them. I buy the brand and I will let them see the bags that have the Bunny brands or the Wonder brand buns in them because I want them to know that that's where they came from. I don't buy the ones from the restaurant supply that are great big because the ones at the restaurant supply are more expensive, they're thicker, and they're more bready. I think people prefer the ones that come from the grocery store or from Sam's wholesale and I pick up new ones everyday. With condiments, use the brands, again; stick to brands. Get French's Mustard. French's basic yellow mustard and I usually carry Grey Poupon on the cart, too, and usually some other dark mustard, if they really want dark mustard.

I use Hunt's Ketchup and Vlasic Relish, and I try to cut up Vidalia onions if I can find them. People really prefer them; they're kind of a sweet, white onion. I also always have Tabasco Sauce on the cart. Those are the basic condiments that can be added for free. They can put all that on their dog at no charge. Extras are kraut, pickles, chili, and you want chili without beans, squirt cheese or slaw. Slaw dogs, chili dogs with cheese, every extra is 50 cents and they usually only cost about a dime. You're like, "50 cents this and .50 cents that. What is all that?" I'll tell you, when I was in a business operating three or four carts myself all the time, I bought a new car every year from what I sold in extras, the little upsell, 50 cents at a time. So it really does add up. If you're doing 100 or 150 transactions a day, 50 cents at a time, half of them, you just say, "Hey, do you want kraut on that? Do you want pickles on that? Do you want chili? I've got chili; I've got pickles; I've got cheese; I've got slaw. What do you want on it?" About half the people are going to say, "No, I just want it plain." But about half of them are going to take the upgrade. Well, 75 people a day at 50 cents a piece, that's $30 or $40 a day in free money. That's $1,200 a month and that's payment, by the way, on a new Range Rover or a brand new Mercedes. So for what it's worth, not that you want to drive your Range Rover out to pull your hotdog cart; you want an old van or an old car, some old beater. Don't park your nice car next to your hotdog stand, by the way. It's always a terrible idea. Get a van or an old car to drag your hotdog stand out with. You want people to think you're just a poor guy on the side of the road selling hotdogs. But the extras are always good. What else? Let's talk about drinks really quickly. I sell only Coke products. I don't want to ask, "Is Pepsi all right?" because it doesn't matter. The cost is almost the same. Coke and Pepsi cycle at the grocery stores and sodas cost less at the grocery store than they cost from a distributor. If you buy them at Sam's or Wal-Mart, you just take your tax number and you get a resale tax permit. They'll offset your sales tax at Sam's or Wal-Mart or anywhere else. They legally can't charge you sales tax. People go, "I don't want to buy from stores because you pay sales tax." If you take your permit you don't have to. The distributors will actually

charge you more for sodas than you'll pay at the grocery store, especially if you watch the sales. Pull out your sales papers. Pepsi and Coke cycle. One week out of the month Pepsi will be on sale and one week out of the month Coke will be on sale. Just watch the cycles. When Coke goes on a great sale, go fill up your garage; just go buy as many of them as they'll possibly let you buy and store them. They're a commodity; you're always going to sell Cokes. You can't go wrong with a Coke. People walk up, "Yeah, let me have a hotdog and a Coke." "Is Pepsi all right?" "Yeah, I guess." This goes back to that experience again. I carry Coke, Diet Coke, and about half the drinks you're going to sell in the hotdog business, believe it or not, are diet drinks. I sell Sprite, Dr. Pepper, A&W Root Beer and I don't buy any of the off brands. I sell quite a bit of root beer; I usually sell root beer at a premium. You can buy the bottled root beer for about a dime more a bottle, and you can usually sell if for $1.50 versus $1.00 without any resistance if you put it out iced down in a bucket. Richard: Perry: You get the glass bottles, going back to that experience? If you can find the glass bottles and they're not much more, I'd suggest you buy the glass bottles. Even though you have to dispose of them and it's a pain in the neck, people, for the most part, if your drinks are a dollar and it only costs a little bit more for an A&W Root Beer, people will typically pay $1.50 for an iced down, bottled root beer who would only pay a dollar for a canned Coke. There are twp other things that I sell sometimes. If you're really busy you don't want to get into a lot of things that slow you down because you can deliver a hotdog in 15 seconds or so. You order four hotdogs in 15 seconds, throw in some chips and drinks, and you make $20 in a minute or a minute and a half. So you don't want to get into things that slow you down. If you're not in a very busy market but it is consistent and steady all day, I make lemonade shakers and snow-cones. If you don't want any equipment, you buy a shaker cup from a bar that has the tin cup on the bottom and the glass on the top, you have a lemon squeezer and you squeeze one full lemon in a glass, then drop the lemon in the glass.

Put in two teaspoons of sugar and then shake it like a bar drink. It makes a great glass of lemonade; you add water and ice, of course. It makes a killer, big glass of lemonade and I get two bucks for those. I buy the lemons from a produce house, so lemons may be a dime, and with a little bit of sugar it costs you less money than a soda and you sell it for twice as much. Some people just really like the experience of watching you shake them and you make some noise. You can even come up with a little song to sing or something funny to say while you're shaking. "Shake, shake, shake your money-maker," or something; I don't know, whatever. But you do something that's fun and makes the experience fun. Snow-cones require a little bit more equipment and can be a little more difficult, but sometimes I've made as much money selling snow-cones off a hotdog cart as I've made selling hotdogs. It just depends on where you are, if there are quite a few kids around, and if it's really hot. It's not something you have to have, but you certainly might want to think about adding a snow-cone machine to your hotdog stand as you have if for a while. Richard: That would be a seasonal thing, obviously, because of location, but if you can invest some of your profits even of your first year to ensure that you're going to have another revenue opportunity the next year, why wouldn't you? You can buy a great snow-cone machine on eBay for $400 or $500. Let's talk about chips. What kind of chips are you going to sell? Are you going to go with a grab bag? Yeah, that's the last part of the thing and you know, I see a lot of guys who sell Lays Potato Chips and I've done both. Lays has great brand, and Doritos and all that, and some people go for that. I sell Kettle Chips or Dirty Chips. The reason I do it is I am charging $1. People know that for the most part if you buy a bag of Lays in a store they are 59 cents or 69 cents. They feel like you are humping them at a dollar. But they don't know what Dirty Chips cost. They come in a nicer looking bag. When I say Dirty Chips, Dirty Potato Chips and Kettle Chips are like those thick potato chips. They are sort of a premium potato chip.

Perry: Richard: Perry:

Even though they are better ­ I think they are better ­ or more premium that a regular potato chip they cost about the same because Lays has spent all that money in branding. They get a lot of money for their brand even though the potato chip is just okay. So I sell Kettle Chips and Dirty Chips and I think it is better. You can test it both ways in your market and see what people like. It really doesn't matter. It's just a little harder to get $1 for a bag of potato chips if that same bag of potato chips is 59 cents or 69 cents at a convenience store. Richard: That makes sense. All your prices, you have a $1.50 here, a dollar here, a lot of round numbers. But still, I've been to a hot dog stand when it is lunch time and everybody is hungry and there are a lot of people there and everyone is throwing their money. Like you said, you need to be able to make a hot dog in about 15 seconds. What do you do with all the money? How do you separate it? Perry: I put it in an apron, and I do it for a couple of reasons. You do not want a cash register on the cart. It takes up a lot of space and it's a pain in the neck. Some people do it because they want to keep up with things real meticulous and all that. If it's me operating, I don't even make my employees ring things up or write tickets. I just get after it and swing it as fast as I can. I put quarters in an apron. I start out the day with 100 ones and a roll of quarters and that's what I put in an apron. I have one pocket for ones and fives and I have one pocket for quarters in the apron. Anything that I take in over a $5 bill I put in my pocket. So if I take in a $20 or a $10 I put it in my pocket. I don't put it in the apron. So all that is ever in the apron is ones, fives and quarters, and everything that I do you can make change with. My lunches that come out to $4.50, which is the most common thing I do, about half the people that do it will go ahead and give you a tip of 50 cents anyway. So they basically give you a $5 bill so there is no change to make and it moves really, really fast that way. But I'd say use an apron for anything. Just go to Home Depot and buy yourself a tool apron, or anywhere else. There are a hundred places to get them. Wal-Mart.

Don't get the ones with five or six different pockets in front. It's just confusing. You just want the one that has two different compartments, one on the right and one on the left. I keep my quarters in the right-hand side, I keep my bills on the left. So I can just drop quarters in my pocket if I get them. Richard: Alright. I tell you what, just real quick, you said you don't make your employees ring up and write down everything. That's probably really easy to avoid just doing a starting inventory every day. Am I on the right track here? You start out with X you should end up with either this many hot dogs left over or this much money. Well, don't be confused. There's still ways they can screw you and I've had them find every possible way to do it. If you have a guy that you are inventorying on hot dogs that sucker will go buy his own damn hot dogs. They are either good people or bad people. I always say if you hire four people, one of them is going to steal from you at every opportunity they can. One is going to steal from you only if they think they can get away from it. One is going to steal from you only if they really, really, really have to have it, and one is going to be completely honest. So the best thing to do is set up systems to where they are accountable. You need to track what your average sales are and that's the reason you need to go work that cart on a regular basis. If you have a cart that is not doing well, if you have employees and you have a number of carts and one is just not doing well and you are doing $200 a day and have been, you go out and work it one day and you do $400, you have a problem. It's probably staffing. But we have three different models that we use. We use a salaried person or a commission person, and honestly, the commission person we are steering away from and doing less and less of that because if you have a person that is motivated by commissions they are entrepreneurial and they are going to be harder to keep anyway. You want a person who they just like to get a salary and work for X number of dollars. And if they do a really good job, occasionally say, "You know what, Billy, you've been doing a really good job. I want to give you $100." Or, "I want to buy you this ticket to the Rolling Stones concert," "I want to do something nice for you."

Perry:

Pay them in kind, sort of like a partnership. Pay them in kind rather than in cash. They will typically be happier. Those type of people like stability. Just don't ever screw around with their money where they make less. Just pay them so much a day to go work and let them go do their thing. They are either going to do a good job or they are not. We've paid commissions in the past where people were on straight commissions. I've paid commissions in the past and it worked pretty well to pay an hourly salary plus 5%, and that works out pretty good, too. Like if you have a person who wants to work and you are paying them $10 an hour, I pay them premium pay because if the local fast food restaurants are paying them $6 or $7 or $8, I'm usually paying $10 because I only have to have them there while they are busy. I don't have to have them there to do busy work and to kill a lot of time. So I'm paying five or six hours, so let's say I'm paying them $50 to work. If they sell $500 worth of stuff I'm going to pay them another $25 in commissions so they make $75 in five hours. It's a pretty good amount of pay. They make half again in commission what they made in salary. But I found in a lot of cases it's just not necessary. In my other model what I do is our entrepreneurial people we have found out that they do better by actually operating the business themselves. So we came up with a model where we rent people carts on a daily basis. You know, you get the best people in the world to do this typically but sometimes it takes awhile to get steady operators. But you can get people who come in every day and pay you $75 to use your cart. That's what we charge, $75. They come pick up the cart. They have to have a deposit on the cart usually of $500 so they bring it back in its proper working condition. Because it's my name and my cart I insist they sell my products on it. So they have to use my chili recipe and they have to use my hot dogs, my buns. And I'll usually mark those things up maybe 50%. I don't just kill them on them. But the benefit for them is they are going to come in

the morning and they get the cart and they get it full of inventory and then they go out. So they don't have to wait. They don't have to rent a commissary. They don't have to go through all that crap. They come and pick the carts up in the morning full of stuff and they go out and sell during the day. When they come back in and turn in the cart at night they have already paid their rent in the morning. When they turn the cart in at night we inventory the cart real quick to see what is there and then they pay for whatever they used. And it's just that simple. I make a little bit of profit on that. So let's say for instance they used $100 worth of consumables today. So I am going to charge them $150. So I made $50 on the consumables and $75 on the cart. So I can make $125 a day on a cart that I don't have to man. And when you consider the cart only costs, if you shop right, maybe $1,500 to $2,000, it's a pretty doggone good return on investment. In less than 30 days I am totally even and making money and I don't have to go sell the first hot dog. Richard: You know what, Perry; you said something earlier, really early on in this call, about not only just selling hot dogs but starting with the intention of possibly selling your business. How many times have you sold your business to one of these guys that is leasing a cart from you? Perry: They are your number one customer, typically speaking. I say that. I've sold carts to guys that were leasing from me. What you do when you lease is you sell them location and everything. A lot of times a guy will want to buy out your location from you. That's a pretty good source to sell from, because they are getting a business and after a while they kind of get tired of giving you $125 a day. You can't quite sell them for as much to leased guys, usually. They'll buy them. They'll want to buy the hot dog cart, they always want to buy the hot dog cart or buy the location or buy the whatever. But for the most part these people that do that are entrepreneurs but they're sort of, they're just not quite together, you know? They can't maintain the relationship at the commissary, there's something that they just can't do in the mix and that's what you're getting paid for.

I'll tell you what you really can do is when you have a group of those guys renting from you consistently, it's like having a rented out apartment complex. You can sell that portfolio of businesses to somebody for a lot of money, to an investor. People who have been landlords in the past understand that. You say, "Hey, I've got 10 hot dog carts. I'm renting them out for $125 a day a piece. I'm taking in $1,250 a day in rental. That's $40,000 a month. Do you know how big a piece of real estate you have to have to bring in $40,000 a month in rental? For a guy to give you $200,000 or $300,000 for that is not uncommon. He's getting a great deal. He'd be getting a great, great deal in trade for $300,000 to $400,000. Believe it or not you can put that business together to where it's sellable in less than six months. That's sort of for your bigger thinker guys not necessarily not just the hot dog cart operators. You can put that together where it's sellable and you just advertise it as an equipment rental business. Richard: Not bad for a, you know, I've been making a couple thousand dollars a week for the last six months and I think I'm going to stop doing it and on top of that I'm going to take $100,000 with me. Yeah, and the great part is, you can get in your car and drive five miles away and do it again. There's absolutely no end to how many times you can do it. You have 260 million people in America. I think I read one time, the average person in America consumes 13 hot dogs a year so that's something like two and half, three billion hot dogs a year sold in America. Richard: Perry: Richard: Plenty of action to go around. Yes, plenty of action to go around. Alright, so now we kind of know how to start and where to go and what to pay your employees and what you're looking at for your cost of goods as far as your hot dogs and everything else goes, but what am I looking at to buy my cart? What do I need to have in my pocket today or in my bank account or someone willing to give me that money, to be in the hot dog business tomorrow?

Perry:

Perry: Richard: Perry:

We'll go over that right now and then unfortunately, I'm going to have to wrap up. I've got another commitment after this. I know I've kept you on a little bit longer today. No worries. First of all you're going to need a cart. There are a jillion different kinds of carts out there, they're all different things and I'm going to tell you my favorite source to find them in a couple minutes. But the main thing is I don't care what kind of cart you get. It really doesn't matter when you're beginning. You're going to get used to a certain kind. I'm used to a certain brand that I like right now because I set up a certain way but you know what? I don't care. I still buy whatever is out there because it really doesn't matter. If you want to boil your hot dogs in a crock pot, a pot on the stove, it really doesn't matter. A hot dog is going to taste the same, right? The experience is the same if you can make it look nice. The first thing you're going to need is the cart. The only thing that I absolutely will tell you that you absolutely, absolutely, absolutely have to have is one with a tow bar on it. There are people that sell hot dogs carts just be careful when you're buying one because sometimes you'll see a cart that is really cheap and, "Oh, that sounds like a great deal." There are DOT certified carts, some are DOT certified and some aren't. They have to road worthy, they have to licensable. You want to be able to stick a license plate on the back of it, hook it to your car and take off. If they're not certified for that you're not going to be able to do that and you're going to have to pull that cart up into a van or a trailer or in the back of a truck and you're just going to deal with a hassle that you don't even want to think about. You want to make sure that you get one that has a tow bar attached and most of them do but just be sure of that. I've attached a list of supplies that you're going to need to get started. Back to the carts for just a second before I get to that. There are a lot of places you can buy carts. My two favorite places to buy carts right now are, number one is eBay. You can go buy carts brand new or you can buy carts almost brand new on eBay. There's almost always someone selling hot dog carts. I think the last time I looked there were 20 or 30 auctions. There are companies that

sell them on eBay but you want to kind of steer clear of them unless it's a last resort. The best thing to do is try to find somebody that has bought a cart and they need to sell it. There's a ton of those out there. There are two places that I've found. One is there and one is on Thrifty Nickel. Thrifty Nickel, for people who don't have it in their area but I think most people do, Thrifty Nickel or Penny Pincher is just a classified ads newspaper. People will sell things in there a lot. I'll tell you this, through eBay and through the Thrifty Nickel, the last seven hot dog carts I've bought I've paid less than $1000 a piece. Out of the seven, five of them were in absolutely perfect condition. Two of them I had to do a little work to but it was no big deal. There's even a way, if you're good with your hands or if you know people that are good with metal, for $500 or $600 you can build your own cart that will actually pass the code. It's not that big of a deal you just have to have somebody who knows how to work with stainless steel. I put a list of all the other supplies you're going to need. Everything else you're going to need to open is probably going to cost you less than $500 as far as your condiment bottles, your trays, all the different things that you're going to need to meet code for your health department is going to cost you about another $500. There's an itemized list attached to this. We don't need to go through that on the audio, do we? Richard: Perry: No. You're short on time. There's an itemized list on there that is going to give you ranges. You might pay a little less or a little more. I just wanted to give you a general price range so nobody could screw you over. Most of those supplies, anymore I don't buy hardly any of them from restaurant supply houses. If you're going in the food business, restaurant supply house owners are thieves. They're the worst people in the world to deal with. They buy something for a dollar and they sell it for $20 to some unsuspecting sucker who things they have to buy from a restaurant supply house. If you're buying a stainless steel utensil or a food grade utensil that's nylon, it can come from anywhere, it does not have to come from a restaurant supply store.

I buy 90% of what I buy now either at Sam's Wholesale or Costco because they always have good quality stuff. Believe it or not, I buy most of my utensils, this is a really cool thing, I buy most of my small utensils, my tongs and all that, at Dollar Tree stores. They have a line of utensils for a buck a piece that are stainless steel with a food grade handle on it so make sure you check them out for all your little stuff you need. They're on the list. Other than that, your start up costs, your commissary rent, I would never rent a commissary for over $200, I think that's ridiculous. You're only there for 15-30 minutes a day but if you have to rent it, most of the time I get it for free. You're going to have to have fire extinguishers because you're going to have a propane tank on your cart that boils your hot dogs and keeps things hot so you're definitely going to have to have a fire extinguisher. They can go anywhere depending upon your local regulations. For $35 you can buy one at Sam's or Costco. Some states require that you buy them from a fire extinguisher service that comes and services them and does all that. In that case it's going to be $200 to $300 probably because those guys know they have you over a barrel. You're going to need liability insurance. It's a good idea to have liability insurance anyway in case somebody chokes or gets sick or whatever you're covered in your insurance. It's not absolutely required to have it unless you're in a venue or public place. Most of the time, if you're in a venue or an event or in a mall or flea market or fair or something, they're going to require that you carry liability insurance and name them as an additional insurer so they don't get sued if you get somebody sick. It's a requirement you won't be able to get around or you won't be able to rent. You can get liability insurance and I'll put a source on the source sheet that you get with this. You can buy liability insurance for $500 a year. I'm trying to find a better source on that now and I'll let you guys know if I do. It will get you $1 million dollars per incident with a total of $2 million cap per year. That's going to cover you and that's what everybody requires. If you're on the cheap and you buy everything just right, you can get started for about $2,000 which is super, super, super low investment for the amount of return. I don't think there's a business in the world

you can start for $2,000 and get this level of quick return from. I haven't found it if there is. If you're going all out and buying everything brand spanking new and you're going to go Cadillac all the way, $3,000 to $5,000. And still it's dirt cheap. If you're the person that has tons of money and you don't want the hassle factor of having to hunt and find cheap deals and all that and you just want to buy everything brand new, $3,000 to $5,000 and you're all in, in perfect condition. Considering you make $1000 to $1,500 a week unless you're doing something really, really wrong, it's a crazy ROI. What else can you think of? Richard: You know, I had a bunch of questions that I was going to ask you and a lot of them were just detail questions about your menu, recipes, and some other things like that. I know you're on a tight schedule so I thought maybe what we could do is just get those attached into the course and maybe printable files or something like that. I'll be glad to give everybody a copy of the menu I use. I'll give you my private recipe book with all my good stuff and I've used these for years and they're all good. I'll give you my recipe for my chili, my recipe for my cheese sauce and all that stuff and that's all stuff that keeps customers coming back over and over again. I'll do all that and we'll get together after the call and I'll send you that stuff over and you can attach it to the package. Well Perry, this is a whole lot to take in, a lot to absorb. I'm really glad we did it over audio so that people can rewind because I have a feeling everyone's just going to be burning up notepads and I just think this was one of the best things we could have done and one of the most informative. Just jam-packed couple of hours. We actually ran a little longer than we were planning but just really rich nuggets of information. I just want to thank you for that and we'll get together after this and get all the stuff and have some great print outs for everybody. Thank you for coming on and I'm sorry we ran a little long. Perry: Oh no, it was absolutely great. It was a lot of fun. I was happy being on the call. I wish everybody great luck and congratulations for taking the courage to start your own business. I think it sucks to work for somebody else and with money this easy to make.

Perry:

Richard:

Go get you a hot dog stand on the beach if you like beaches. It's a portable business. Go anywhere you want, work when you want to. You just can't lose money unless you're just not working. It's my motto. Remember what I said, "Nobody ever went broke selling hot dogs." Right? Thank you so much Richard. Richard: Thank you Perry.

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