Industry News | January 13, 2011

New HQ in Tow, Penn Station Focuses on Growth

Twenty-five years after its foundation, 25 new restaurants are planned for 2011; that's how it's shaping up for Milford, Ohio–based Penn Station East Coast Subs. Focusing on strong ROI and customer satisfaction—with same-store sales up—the company feels now is the time to make a strong push for growth.

"We offer an Item 19 in our disclosure document," says president Craig Dunaway. "This is known as an earnings claim. We're happy to be upfront with potential franchisees about our sales and profitability. We consistently report average earnings of our entire franchise system. We have nothing to hide, and we want to ensure we attract leads who have a realistic perspective of the investment."

The quick-service restaurant chain, renowned for its Philadelphia cheesesteak sub sandwich, has boasted a 99.5 percent success rate for more than 25 years. Dunaway attributes much of this to the brand's long-term approach and franchisees' ability to negotiate with food vendors. While other brands accept rebates for their own profit, Penn Station does not. Overall, Penn Station franchisees receive high-quality food items at approximately 15 percent lower costs than other national brands.

In December 2009, the company completed its 15,000-square-foot corporate offices, which has helped streamline operations. With the new facility, Penn Station holds training sessions and systemwide meetings for franchisees. A mystery shopper program also began last year with multiunit franchisees to ensure customer satisfaction and administer employee incentives.

"We are very excited about the new initiatives planned for 2011. Our new office space, where we hold extensive training sessions and collaborative meetings, combined with our mystery shopper program, which helps improve customer relations, has poised us for solid growth," Dunaway says.

Penn Station has more than 220 restaurants in 12 states including Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia. The company projects 25 new restaurants to open in 2011, 35 in 2012, and 40 in 2013, with 325 locations open by the end of 2013. Penn Station is targeting Cleveland, Columbus, Pittsburgh, Chicago, St. Louis, Detroit, Knoxville, Richmond, Charlotte, Nashville, Greensboro, and Toledo for future growth.