In the first quarter of 2018, Penn Station franchisees in three markets opened additional units, continuing a broad and measured growth strategy that has helped the franchise establish more than 315 units across 15 states.
The new locations were opened in Dayton, Ohio; Raleigh, North Carolina; and Detroit, Michigan. Each location was opened by an existing multi-unit franchisee. According to Greg Goddard, Penn Station’s Director of Development and Franchising, it is not unusual for the brand to see most of its growth coming from existing franchisees.
“We love expanding through our existing franchisees, and we’ve fine-tuned our system to encourage that kind of growth,” he said. “The investment of time in each new restaurant is reduced dramatically for both the franchisee and the franchisor when that store is opened by an existing operator.”
One of the ways Penn Station has refined their system to encourage multi-unit growth is by streamlining the operational model, which allows owners to open and manage new restaurants without investing undue time and money on training and infrastructure.
Penn Station’s menu, which includes 14 sandwiches, fresh-cut fries, hand-squeezed lemonade and chocolate chunk cookies, has been designed not only to attract a wide customer base but also to allow for smaller kitchens and reduced staffs compared to most foodservice brands. That means owners can scale up quickly and inexpensively. The brand has also added wraps and salads over the past several years to its core menu.
That low overhead and simplicity of operations have allowed a number of Penn Station owners to build small empires in their markets, in some cases opening nearly twenty units. One such operator is Kevin Osterfeld, whose 18th location in the Dayton, Ohio area is one of the three new units opened in Q1.
Kevin may have been an early adopter, but Goddard says his success with the brand is all his own.
“Kevin is one of our top operators and has been for almost 30 years. He’s built his own company with the Penn Station brand and honed his craft to maximize the model’s performance.” Goddard said. “He essentially built out the Dayton market himself, and because of his additional systems, his operational efficiencies and acute attention to detail, Dayton is one of our best markets. It’s been incredibly important to the brand.”
The first quarter’s two other new units were opened by Jeff Martyn, who opened his sixth store – his 4th in the Raleigh area, and Don Gheysens, who opened his third in Detroit. Both Martyn and Gheysens are on their way to becoming standout operators in Penn Station’s franchise system, according to Goddard, and their markets are crucial ones for the brand’s growth strategy.
“Detroit and Raleigh are big markets for us, especially where we stand in our development strategy now, so we’re excited to open up new stores there,” he said. “Jeff and Don have already shown great success in those markets, and we’re excited to see them continue to grow and to attract new owners.”
Though the three new units opened in 2018 do not mark an aggressive development sprint compared to some other franchises, Goddard says the new openings are representative of the brand’s purposeful and supportive growth strategy.
“We are focused primarily on opportunistic growth,” he said. “We’re not interested in growing for the sake of growth alone. If we can’t be sure that a new restaurant is set up with a great owner, in a great location, and with all the resources it needs to be successful, we aren’t going to open it. We’re growing when and where it makes sense for our brand and for our owners. That’s the strategy that has allowed our owners to thrive, and it’s the strategy we’ll continue to employ in Q2 and beyond.”