For a franchisor with more than 300 locations and only one company-owned unit, the emphasis Penn Station East Coast Subs places on strong unit-level economics is impressive. It is this level of commitment to franchisee success and satisfaction, both financially and operationally speaking, that has supported the brand’s consistent growth throughout its three-decade history and what makes its system so conducive to multi-unit operation.
Where some brands regularly see franchisees leave their system to leverage their experience elsewhere in the industry, it is uncommon for Penn Station franchisees to sell their units prior to retirement. Not only do its franchise owners benefit from the brand’s simple operations and top-tier support, but its model is also designed to scale so owners can develop into multi-unit operators. With scale, it is often easier for these owners to maximize their return on investment.
The average Penn Station franchisee owns four locations, an impressive number on its own. But when counting only multi-unit operators, that number climbs to five, meaning that most Penn Station owners have multiple restaurants contributing to their capital. Franchisees Roger and Marilyn Kirkland can attest to this after 15 years with the brand. The Kirklands own 10 restaurants throughout West Virginia and Pennsylvania.
When making the initial decision to buy into the Penn Station system, the Kirkland’s primary driver to invest was the brand’s great food. “We liked a number of concepts we looked at,” he said, “but what we kept coming back to was that there was no other product that we’d be able to stand behind like we knew we could with Penn Station.”
As soon as the Kirklands became franchisees, though, it was the immediate success they experienced and high-quality partnership they established with the Penn Station corporate team that compelled them to grow with the brand. “It’s an amazing partnership,” Kirkland said. “[The leadership team] didn’t just create a great product, they created this amazing system for franchisees.”
With its largest multi-unit operator running 18 stores and counting, it’s clear the level of attention the brand pays its franchisees is what keeps them committed to growing with Penn Station.
“The majority of our franchise system is run by multi-unit operators,” said Greg Goddard, Penn Station’s Director of Development and Franchising. “That speaks to the economy of scale we’ve refined with our system. Our model is designed to support franchisees so that they can quickly grow their operation from a job into a business. When a franchise system has a lot of single-unit operators, that doesn’t say a lot for the long-term success of their owners. Over 70 percent of Penn Station franchisees are multi-unit operators.”
The opportunity that exists with Penn Station is evident by how long franchisees stay with the brand. Many of franchisees have been around for multiple decades, some since the brand’s inception.
“We see that as a testament to our communications and the strong relationship between our corporate team and franchisees,” Goddard said. “Owners don’t stick around if they are unhappy with the direction of the franchise or if they can’t work with the corporate team, so the fact that so many of our franchisees stay with us for their entire career is as good an indication as any that we are on the right track.”
The startup costs for a Penn Station franchise range from $347,955 to $556,804, with a franchise fee of $25,000. For more information on franchising with Penn Station, visit http://www.penn-station.com/franchise/.