Food / Tony Tantillo

NEW YORK (CBS/AP) ― On a blustery winter day, Kazi Hossain stands under the umbrella on his hot dog stand and takes one order after another from on-the-go New Yorkers. Some haggle about the price, others take their relish-covered hot dogs and happily head on their way.

It is a daily sight on sidewalks around New York, from the small push carts that sell only hot dogs and pretzels to larger grills where vendors cook meat for sandwiches.

But behind these operations lies a big business -- one that that generates millions of dollars a year for New York. Vendors pay the city top dollar to get a permit, including some that cost about $300,000 for prime locations around Central Park.

"Basically, if you buy a hot dog in Central Park, you're helping to pay for a police officer, or the teacher in a school across the street and all the lights and city services," said Parks Commissioner Adrian Benepe.

Despite the financial advantage to the city, the vending business has had its troubles, including allegations that the company in charge of most Central Park permits has mistreated its largely immigrant work force.

There are two ways for carts to be licensed. Within city parks there is a bidding system, and outside of parks, the city health department issues mobile food vending permits at a fixed cost. Those permits cost anywhere from $75 to $200, and the waiting list is long.

In Central Park, permits go to the highest bidder. Minimum bids are $600 for a three-year permit, but they often go much higher. A spot outside the Metropolitan Museum of Art costs upward of $300,000 -- the equivalent of 136 two-dollar hot dogs a day for three years.

Other prime park spots cost more than $100,000, parks officials said. The parks department regulates the cost of food and drink within the park, and hot dogs and pretzels are capped at $2 each, and a 12-ounce can of soda is limited to $1.25.

Benepe said the park permits generated $5.1 million for the city last year.

With permit costs so high, most of the 60 carts in Central Park, including the spot outside the Met, are owned by a company called New York One, formerly M&T Pretzel.

Benepe says the parks department makes allowances for specialty carts operated by independent business owners to ensure the company doesn't have a pure monopoly in the park.

Still, problems have persisted, said Sean Basinski, spokesman for the Street Vendor Project, which advocates for vendors. He said New York One has treated its employees very poorly.

"That company is vindictive against employees who don't toe the line, they were unresponsive when workers tried to form a union ... It's been very messy," Basinski said.

In November 2004, the company was forced to pay its employees $450,000 in back wages to settle labor law violations because it stiffed its workers on overtime or minimum wage after an investigation by then-Attorney General Eliot Spitzer.

The Attorney General's office said the company changed its payment practices after learning of the investigation, offering workers the required basic hourly rate and overtime.

Several messages left at New York One were not returned. Vendors outside the Met refused to talk to reporters, referring them AP to New York One.

No matter where the vendors are located, the cost of doing business is high.

Carts can cost as much as $10,000. Many vendors pay hundreds a month to house their cart in a garage, plus they must cover the cost of food and fixings. If it's a cold winter day, business drops. If it's too hot, pedestrians avoid the steamy carts.

"It is a competitive job, even if we are just selling little things that don't cost customers much money," said Mohammad Meah, who operates a cart in Midtown Manhattan. "I have to get here before dawn sometimes to get a good place to sell."

Hossain, who works in downtown Brooklyn, says he can usually make about $200 off a 10-pound bag of hot dogs and 5-pound bag of sausage during a 10-hour day. But it's less in the winter, and since he doesn't own his cart, he must also pay rent.

And then he has to deal with the customers who try to haggle and get a cheaper hot dog.

"If I say yes, I make the sale, but then I make no money," he said of the hagglers. "If I say no, he goes to the next cart down the block. I lose."

Getting a cart licensed outside of the city parks is also highly competitive. The city limits the number of year-round permits for mobile food carts to about 3,000, and there's a long waiting list. Veterans may be licensed regardless of the cap.

"It's expensive to get your own cart, and even then it's impossible to actually get a license for it," Meah said. "If you have been doing it 10 years, then maybe you can, but there are so many people trying to get in."

In City Parks
$5.1 million: Money raised for the city's general fund from food vending licences in the parks.
$300,000: Cost of bid to operate a hot dog vending cart in Central Park near the Metropolitan Museum of Art.
$600: Minimum bid for a food cart in city parks.
$500: Minimum bid for a food cart 10 years ago.
$2: Parks Department-regulated cost of a hot dog.
$2: Parks Department-regulated cost of a pretzel.
$1.25: Parks Department-regulated cost of a 12-ounce soda.
50 cents: Regulated cost of a bag of potato chips.

Outside City Parks
3,000: Number of annual street vending permits for food issued by the New York City Department of Health and Mental Hygiene.
1,000: Number of summer permits available.
$200: Permit cost for processing food cart.
$74: Cost to lisence non-cooking food cart.
$50: Cost for food vending operator's lisence for two years
$1: Average cost of a hot dog outside city parks.
50 cents: Cost of hot dog plus bun and all the fixings to many vendors.

(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)