CFOSnafu.com » First rule of hot dog vending: Location, location, location

First rule of hot dog vending: Location, location, location

February 13, 2009 by Shane Borer
Posted in: "Seemed like a good idea at the time", "Would you want this person in Finance?", Bad investments, In this week's e-newsletter, Latest news & views

How much is too much for a hot dog? When it goes over $600K, it’s time to draw the line.

No one knows how cutthroat the concessions stand business is better than Pasang Sherpa. The entrepreneur successfully out-bid two major hot dog companies for the right to sell food outside of New York City’s Metropolitan Museum of Art.

To be fair, Sherpa will need to sell a lot of hot dogs to recoup his expenses. He paid $280,500 to operate a cart at the north-side entrance and $362,201 for the premium south-side entrance of the museum at Fifth Avenue and 82nd Street. The Met sees more than 5 million visitors a year, but Sherpa has several problems in his way before he can get to business.

For starters, one of his two carts hasn’t yet been certified by the city’s Health Department. And even if he does get the cart approved quickly, the north-side entrance to the Met has been blocked by construction that started in October and is planned to continue through May. Finally, he’ll still have competition to worry about. Although Sherpa successfully won a contract for rights to the locations, a loophole in city regulations allows veteran operators to bypass the bidding process.

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