Jurors took about an hour to come back with not guilty verdicts in favor of Tony Packo III and the former company controller.
Prosecutors accused the pair of working together to steal from the restaurant chain and said that Packo III believed he was entitled to more money even though he owned only a minority share of the business. His father and a cousin owned the majority.
Defense attorneys told jurors that the charges were the result of a family feud and that Packo's cousin cooked up the theft accusations so that he could take over.
The family fight put the future of Tony Packo's in doubt after a bank foreclosed on its loans and a third party was put in charge of daily operations in the spring 2011. But a sale finalized in February put the restaurant in the hands of a private group aligned with Tony Packo Jr. and Tony Packo III.
Packo's became a household name in the 1970s when actor Jamie Farr portrayed a homesick U.S. soldier in the Korean War who longed for the hot dogs.
"If you're ever in Toledo, Ohio, on the Hungarian side of town, Tony Packo's got the greatest Hungarian hot dogs," Farr's character, Cpl. Max Klinger, said on an episode in 1976.
The original Packo's remains a tourist destination and is decorated with "M-A-S-H" memorabilia.
Its new ownership group said after the verdict that Tony Packo III and his father will stay onboard with the restaurant group.
Bob Bennett, who won the bidding for Packo's, said last year that he planned on putting Tony Packo III and his father in charge of the day-to-day operations of the five Packo's outlets around Toledo.