How the Brand Uses a Targeted Initiative and Four Pillars Of Franchise Growth
On the last day of August, a groundbreaking ceremony was held for a new Penn Station East Coast Subs in North Carolina. It’s one of many locations the franchise opened in 2023, and one of dozens opened in the last three years. The brand, known for its hot grilled subs, made-to-order fresh-cut fries, and fresh-squeezed lemonade, is also known for its impressive growth as of late.
That day in August, Eric Fairbanks broke ground on his newest Penn Station East Coast Subs restaurant. It’s one of a handful of locations he owns in North Carolina. He opened his first Penn Station in Boone, North Carolina, in 2018. Fairbanks has since acquired two more locations, built a fourth, and has three leases under negotiation.
“My goal in franchising has always been to not only better myself and my family, but to see the people I work with have the opportunities to grow, learn, and better themselves as well,” said Fairbanks. “The Penn Station system is centered around developing that ownership mentality from top to bottom and has tons of systems in place to help develop owner-operators.”
Fairbanks has been able to grow his franchise portfolio alongside Penn Station, Inc.’s own progress. Over the past three years, the sub-sandwich franchise has seen growth snowball due to its strategy. In 2022, eight new Penn Station East Coast Subs locations opened their doors to serve up hot-grilled subs. This year, the brand expects to end the year with 14 new locations open; Fairbanks’ new location in North Carolina was just one of those.
“Our renowned sandwich franchise has experienced a deliberate and consistent expansion that is now gaining momentum,” said Craig Dunaway, Penn Station East Coast Subs Chief Operating Officer. “Central to our strategic growth has been our targeted marketing approach. We’ve concentrated our efforts on markets across 14 states.”
- Penn Station East Coast Subs deployed a Target Growth Area Development Incentive Program in 2021. The program drove rapid growth and expansion in certain markets the brand marked with high-growth potential. Franchisees who take part in the program receive financial incentives for each store under their development agreement, including: 50% off initial franchise fee: The initial franchise fee is cut in half to $12,500 instead of $25,000.
- Royalty waiver: No royalty fees for the first six months (180 days) from the opening date. Standard royalty structure applicable thereafter.
These incentives enable franchisees to jump-start their entrepreneurial journey with confidence, a reduced financial burden, and an enhanced support system. Fairbanks was able to utilize the incentive program in North Carolina, one of Penn Station’s targeted states. The program helped catapult his franchising group to multi-unit ownership. He said the first six to nine months of opening any restaurant can be a time of high pressure and work to grow sales, but the incentive program and support from Penn Station helped ease the risk and increase the reward of opening a new business.
“We did utilize and benefit from the incentive program,” Fairbanks said. “The incentive takes some of the financial pressure off and also affords us the ability to spend more dollars on developing, sourcing, and retaining staff. It also gives us a little cushion with our food and marketing budgets.”
The Pillars of Effective Franchise Brand Growth
The franchise’s brand growth isn’t a coincidence. It’s a result of a harmonious meshing of key factors. Penn Station’s expansion is a multi-faceted approach with four main pillars:
- Solidifying operations
- Selecting the right franchisees
- Training and support
- Marketing and brand recognition
Part of the brand’s growth strategy is based on logistics: 95% of Penn Station restaurants are within 350 miles of the brand’s corporate headquarters in Cincinnati. This ensures more efficient supply chain networks, timely product delivery and better operational oversight.
Since the incentive program was implemented in 2021, Penn Station East Coast Subs has awarded 45 locations within the focused 14 states. The program, along with the sustained support and training from Penn Station, is helpful for both new and experienced franchisees, like Fairbanks.
Penn Station East Coast Subs Target Growth Area Development Incentive Program Focus States
- Alabama
- Georgia
- Illinois
- Iowa
- Kansas
- Michigan
- Mississippi
- Missouri
- Nebraska
- North Carolina
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
To learn more about franchising with Penn Station East Coast Subs and the Target Growth Area Development Incentive Program, visit penn-station.com/franchise.
About Penn Station East Coast Subs
Jeff Osterfeld started the award-winning sandwich chain in 1985 in Dayton, Ohio. Three years later, he sold his first Penn Station franchise. Today, there are more than 300 Penn Station East Coast Subs franchises in the U.S. serving high-quality products grilled and baked to perfection.