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Franchise: Penn Station Subs Sees Expansion

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    How did one franchise expand to more than 225 restaurants in 12 states?

  • Duration 6:14
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I think a lot I'm Tracy -- would love to tell -- or is it a house mom is on -- -- are doing it without government help doing on their own certainly not waiting for the next government handout.

That's -- Craig dunaway is with us now president of Penn -- East Coast Stubbs.

And Chicago I let this notion and that you are basically out there saying I make a better -- city -- Hi Tracy area I'm terrific -- data and just fine thank you even do -- since 1985.

Is that correct.

We started franchising in 1985 that's right we.

Our founder just Foster -- opened his first.

Opened his first restaurant actually in 1982 after He graduated from college she knew we wanted to be He wanted to be self employed didn't want to work for anyone else so.

He decided to venture out on a zone and said -- open up a restaurant.

So -- just us he's so the potential of making good sandwiches rain was a student at union -- Miami in -- -- Ohio.

Does this big project on being -- -- -- and -- -- after graduating He opens his own delicatessen.

That's exactly right He had opened it for a couple of years then at the time -- wasn't even aware of what a a cheese steak was He was in a mall setting and not.

One of our competitors actually opened up across the mall and they had a line in.

Just line was a little smaller so He decided to go to Philadelphia investigators cheese -- Interesting though that he's making cheese steaks.

And he's not really from Philadelphia I thought act them in the name in and of itself intrigues me Penn Station.

-- not even a -- and a.

That's exactly right we've got one location in Pittsburgh Pennsylvania but otherwise were based out of Cincinnati Ohio.

Jeff.

You know He was intrigued by the East Coast -- which is the Italian going up to -- New Jersey.

And you know that -- stakes so that's why decided to name at Penn Station East Coast subs.

We I am born -- New Jersey so I'm very familiar with -- damages.

Was it that there is in need out there out west that there's not it's not nearly as good.

Well when when -- first started Penn Station He really looked around another restaurant concepts.

And looked at sandwiches they were very popular and you know what He would do is He would go into one restaurant NC one particular sandwich go into another restaurant.

See another sandwich in these weren't necessarily sandwich concept seats were just restaurants.

And He decided to put it altogether and you know -- a menu for Penn Station with with grilled subs.

So I compete with that you know there's other sandwich places that there's -- of course I mentioned earlier.

Well -- you know we're and that we're -- -- fast casual segment and and fast casual really it's that price point it's between eight and ten dollars.

And if you take a look at somebody like subway we we feel like that.

You know a lot of times there's -- price point with a five dollar foot long and and fast casual was really more it's -- quality of the product.

It's the -- beyond so the restaurant.

So you know you're gonna pay a little bit more for -- higher quality sandwich.

So the notion is that we're gonna stay eat there right we're not just running out the door would be things.

That's exactly right when you walk in and -- sure order.

Everything -- then that cut fresh but we're waiting for you.

You place your order and then that's when we -- make in your sandwich so it's it's cooked to order.

You know and I think if you take a look at the fast casual segment it's really a it's a and between.

Fast food and and casual dining and it's really evolved over the last six or seven years.

Where that name is becomes synonymous with that average ticket that you and I talked about earlier between eight and ten dollars.

You are in twelve states right now plan to open another 25 restaurants in 201135.

And 2012.

All through franchising.

That's right I would I would call our growth aggressive conservatism.

We it's very important for us to help franchisees maximize their return on investment that's why they're getting in this businesses to make money.

And so every one in the Penn Station office.

Sole responsibility.

Is to really help franchisees maximize their return on investment -- that.

We're getting ready to go and over Overland Park, Kansas.

In late December and that'll -- the thirteenth state there were and so we're about 25 major markets right now.

Now comes -- in new York New Jersey area know I say.

Well we we grow you know about from outside of Cincinnati week we you know we try to stay pretty close to home I'm aware of midwest company.

And if you were to draw circle between Detroit and Richmond Virginia.

Nashville Tennessee and then over to Kansas if you were to make that a circle we're trying to fill in the we're trying to fill in that circle with Penn Station restaurants.

In order to grow you really need you really need three things when you go into a new market it's logistics which is getting the food there.

It's brand recognition.

And it's our oversight and if we were to go to say Denver Colorado right now very few people would know who we are.

Our food distributor really wouldn't -- -- take the product there for just one or two restaurants.

And it's difficult to put somebody in a plane and go help the franchisees like we feel like they should be helped.

Re seeking to close on the before I let you -- may ask why the decision a franchise in not just keep it under one roof.

Well if you put an owner is close to the counter as possible they're gonna take care of the customer you know when a customer comes into the restaurant.

They know that there's an owner there who's taken care of them and it's their money on the line and it's their sweat and toll and and they're gonna take care of the customer.

You know better than an hourly employee is going to so we believe franchising is the best model.

And you know franchise -- no other markets better than we do have -- to Kansas the general was born and raised there so He knows what he's getting into better than we would.

Yet you know we we've heard that time and time again that franchising empowers the owner and and it makes them feel lots of scenario as opposed and is working for someone else.

Craig dunaway president Penn Station East Coast does not any scares yet but maybe some day they should take your time -- -- us there.

Thank you Tracy appreciate it have a.

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