Penn Station

Penn Station East Coast Subs began with Jeff Osterfeld, who opened Jeffrey's Delicatessen at Dayton Mall in Ohio in 1983. After seeing the popularity of cheesesteak sandwiches during a trip to Philadelphia, he added his own version to the deli menu. Its immediate success led to the first dedicated Penn Station restaurant in downtown Cincinnati, Ohio, in 1985. The company started franchising in 1987, first expanding around Cincinnati and later entering St. Louis, Louisville, and Nashville. In 2025, the system reported 322 locations nationwide, including 321 franchised units and 1 company owned unit across 14 states. The U.S. sandwich shop franchise sector is projected to exceed $23 billion in sales in 2025 and includes approximately 38,000 sandwich focused franchise units. The global limited service restaurant market was valued at $871.02 billion in 2025 and is forecast to grow at a compound annual growth rate of 5.7% to $1.436 trillion by 2034. The U.S. limited service restaurant market is estimated at $97.85 billion in 2025 and is projected to reach $133.71 billion by 2030 at a compound annual growth rate of 6.45%.

Penn Station operates in the fast casual segment, which is projected to generate $84.5 billion in revenue from 2025 through 2029 at a compound annual growth rate of 13.7%. That compares with projected U.S. franchise growth of 4.4% in 2025. About half of U.S. adults eat a sandwich each day, supporting demand for Penn Station's hot grilled subs, fresh cut fries, and hand squeezed lemonade. Its made to order menu and open kitchen emphasize speed and visible preparation. Statista expects meal delivery service users to reach 1 billion in 2024 and nearly 2.5 billion by 2027. Penn Station receives less than 40% of its orders through digital channels, while in restaurant ordering accounts for over 60%. Cashless transactions worldwide are expected to increase by over 80% from 2020 to 2025. The menu also includes wraps, salads, and 9 grain sandwiches added in response to guest requests. Younger customers continue to value quality, speed, and sustainability, while competition in the sub sandwich sector remains intense.

The initial franchise fee is $25,000. Multi unit franchisees may also pay a territory fee with a minimum of $7,000. Reported total initial investment ranges from $290,984 to $594,478, while other industry sources cite $473,793 to $764,940, $474,000 to $765,000, and $507,500 to $858,750. Costs vary with the store format, location, leasehold improvements, and local construction. Store construction is estimated at $262,000 to $381,000, and equipment at $149,000 to $235,000. Other expenses include opening inventory of $5,000 to $15,000, design fees of $15,000 to $20,000, legal fees, organizational costs, and $10,000 to $20,928 in additional funds for the first three months. Candidates must show a minimum net worth of $500,000 and liquid cash of $300,000. The royalty is typically 6% of gross sales, although reported figures range from 2% to 8%. National advertising fund figures include 0.25%, 3%, and 4.00%, with the most recent FDD reporting a 3% contribution. Penn Station, Inc. is privately held, and Jeff Osterfeld is its founder and CEO. Its Target Growth Area Development Incentive Program offers 0% royalty for six months and 50% off initial franchise fees in eligible areas including Atlanta, Georgia; Chattanooga and Memphis, Tennessee; Chicago, Illinois; Charlotte, Raleigh, and Winston Salem, North Carolina; Richmond, Virginia; Pittsburgh, Pennsylvania; Omaha, Nebraska; and Kansas City, Kansas.

The operating model centers on hot grilled subs, fresh cut fries, hand squeezed lemonade, wraps, salads, and 9 grain sandwiches prepared to order. Customers can watch preparation in the open kitchen, supporting transparency and a visible focus on freshness. Smaller kitchens and lower staffing needs can support multi unit development. A typical location requires approximately 15 employees. The concept combines fast casual and quick service features, with premium food and short waits during lunch and dinner. Penn Station also offers an app, online ordering, and loyalty programs, although in restaurant orders remain above 60% and digital orders remain below 40%. Training includes 202 to 299 hours of on the job instruction and 25 to 33 hours of classroom instruction. The program has received recognition in Training magazine's APEX Awards every year since 2016. Corporate support covers operations, marketing, and supply chain management under a franchise first approach. President Lance Vaught has held that role since 2006, and COO Craig Dunaway has been with the company since 1999. Both have restaurant operating experience or franchise ownership experience. Franchisees receive territory protection, and the company seeks multi unit growth in underserved markets. It is first filling its circle within a 250 mile radius of its Cincinnati headquarters before pursuing distant markets. The average franchisee owns four locations, while multi unit operators average five.

Buyers should request performance information from the franchisor and speak with existing franchisees about unit economics. A November 2025 survey reported that 90% of franchisees enjoy being part of the organization, 92% respect their franchisor, and 90% enjoy operating the business. Only two stores closed during the brand's first 25 years.

Penn Station reported 322 total units in 2025, including 321 franchised locations, and plans to double from approximately 320 locations to 650 over the next five years. In the first quarter of 2018, franchisees opened locations in Dayton, Ohio; Raleigh, North Carolina; and Detroit, Michigan. The company planned to open 12 units in 2019, with approximately 80% of that growth expected from existing franchisees. In November 2021, Penn Station signed agreements with existing franchisees to add 50 restaurants over the following five years in Knoxville and Nashville, Tennessee; Canton, Cleveland, Columbus, and Dayton, Ohio; Northern Kentucky; Charlotte and Winston Salem, North Carolina; and St. Louis, Missouri. Its competitive position draws on brand recognition, a loyal customer base, and recipes for hot grilled subs, fresh cut fries made in house, fresh squeezed lemonade, and freshly baked cookies. The open kitchen displays food preparation, while wraps, salads, and 9 grain sandwiches address changing preferences. The company continues to invest in its app, online ordering, and loyalty programs. Don Champion joined in January 2025 as Senior Vice President of Franchise Development.

Penn Station seeks well capitalized entrepreneurs with strong operating backgrounds who can manage and expand multiple locations. Applicants need a minimum net worth of $500,000 and liquid cash of $300,000. Managing owners with prior restaurant franchise experience are preferred for certain expansion targets, though that experience is not required for every new franchisee. The system's multi unit orientation is reflected in the average of four locations per franchisee and five locations among multi unit operators. Current expansion efforts cover the Midwest, Mid Atlantic, and Southeast, with opportunities in Atlanta, Georgia; Chattanooga and Memphis, Tennessee; Chicago, Illinois; Charlotte, Raleigh, and Winston Salem, North Carolina; Richmond, Virginia; Pittsburgh, Pennsylvania; Omaha, Nebraska; and Kansas City, Kansas. The company continues to build its circle within a 250 mile radius of Cincinnati before moving into more distant markets. This regional focus supports marketing and supply chain operations. The company does not provide a specific timeline from signing to opening, but its operating model and multi unit focus are designed for continued development.