Food & Beverage
Penn Station Franchise
An "East Coast"-style cheesesteak and submarine sandwich fast-casual restaurant chain, concentrated in Ohio, Indiana, and the broader Midwest/Southeast. Founded as a sole proprietorship in the Cincinnati, Ohio area in 1985 by Jeffrey Osterfeld and incorporated in January 1987; franchising since August 1987. The company has operated only a single company-owned restaurant (its original training-facility location) throughout the FDD's disclosure period, with essentially all system growth coming from franchisees.
Every franchisor has to file a document called an FDD before they can legally sell you a franchise. Buried in it are the two things a sales rep won't volunteer: what you'll actually spend to open, and whether existing locations are opening or closing. That's what's below, pulled straight from Penn Station's own filing.
What it costs to open
From the filing's investment breakdown -- not a "starting at" number a sales rep quoted you.
Franchise fee
$25,000
Total to open
$507,500–$858,750
Ongoing royalty
Not a %-of-revenue fee -- see FDD
What you'd actually spend, over time
The upfront cost is only part of it. Plug in what you expect a location to bring in, and see the real total once royalties over a few years are added on top.
Defaulted to a rough food & beverage industry average, not a figure from Penn Station's own FDD -- change it to your own estimate.
Startup investment (royalty not included -- see below)
$507,500 – $858,750
Penn Station doesn't charge a straightforward percentage-of-revenue royalty -- its FDD describes a different ongoing-fee structure instead. That cost isn't included in the total above; check the FDD directly for the real terms before using this figure to compare against other franchises.
When would you break even?
Revenue alone doesn't tell you this -- it depends on what's left after rent, labor, and everything else. Penn Station's FDD doesn't disclose a reliable profit figure (most franchisors don't), so this starts from a typical food & beverage profit margin (~8%) and applies it to the revenue you entered above -- adjust the percentage to your own realistic estimate.
Defaulted to a general food & beverage industry benchmark, not a figure from Penn Station's own filing -- this is a starting point to adjust, not a promise about what franchisees actually make.
At that profit, you'd break even in about
6.3–10.7 years
Weigh that payback period against what you already know: Penn Station is opening more locations. A long payback period on a shrinking brand is a very different bet than the same payback period on a growing one.
Is Penn Station actually growing?
Franchisors have to report, every year, how many locations opened, closed, or changed hands. Most franchise sites never show you this. Here it is:
Locations opened vs. closed, by year
GrowingFrom Item 20 of Penn Station's FDD, the section franchisors use to disclose real openings and closings.
| Year | Franchised units, start | Franchised units, end | Net change |
|---|---|---|---|
| 2021 | 309 | 311 | +2 |
| 2022 | 311 | 318 | +7 |
| 2023 | 318 | 322 | +4 |
Most recent year (2023): gained 4 franchised units, ending the year at 322 total.
What you're actually signing up for
The cost and growth numbers above are only part of the picture. These three FDD items are the ones a prospective franchisee tends to weigh most heavily once they're past the sticker price.
Training & ongoing support (Item 11)
Item 11: Penn Station provides an Operating Manual, training, and support materials through the "Penn Station Outernet" portal. Franchisees pay a $3,500 Site Development Fee at signing of the Single-Unit Development Agreement and the $25,000 Initial Franchise Fee before opening, plus ongoing Local Advertising (up to 2% of net sales) and a National Fund contribution (currently 2%, escalatable to 4%, of monthly net sales).
Territory protection (Item 12)
Item 12: single-unit franchisees receive a one-mile "Restricted Territory" radius around their restaurant within which Penn Station won't operate a company-owned unit or grant another franchise; multi-unit franchisees instead get a negotiated Development Territory under a separate Multi-Unit Agreement. There's no minimum sales quota tied to keeping the territory, and it doesn't shrink if the area's population grows.
Renewal & termination terms (Item 17)
Item 17: an unusually short 5-year initial term, with up to three 5-year renewals (15 additional years max) if the franchisee is in good standing and its lease is still in effect. Franchisees can terminate if Penn Station defaults and fails to cure within 60 days, or if they can't secure their initial site lease within 60 days of the required date.
How Penn Station compares to other Food & Beverage franchises
Across the 28 food & beverage franchises we've hand-verified so far, the typical range to open runs $837,269–$2,125,953, with royalties averaging around 5.7% of gross sales (based on the 25 of them that charge a flat %-of-revenue royalty).
$617,800–$2,170,000 · 6% royalty
Slim Chickens$1,188,900–$4,944,000 · 5% royalty
Ziggi's Coffee$315,830–$2,093,361 · 6% royalty
Crumbl$848,566–$1,472,533 · 8% royalty
Little Caesars$376,500–$1,769,200 · 6% royalty
Jamba$480,850–$941,300 · 6% royalty
Tropical Smoothie Cafe$300,000–$720,500 · 6% royalty
Playa Bowls$188,675–$636,458 · 6% royalty
Kona Ice$114,730–$228,601 · non-%-of-revenue royalty
Firehouse Subs$166,671–$950,351 · 6% royalty
Wingstop$310,400–$1,048,500 · 6% royalty
Jersey Mike's Subs$436,176–$1,162,228 · 6.5% royalty
Dunkin'$532,400–$1,832,500 · 5.9% royalty
Popeyes Louisiana Kitchen$1,222,045–$3,923,245 · 5% royalty
Del Taco$1,461,200–$3,313,500 · 5% royalty
Blaze Pizza$757,000–$1,297,100 · 5% royalty
Church's Texas Chicken$1,202,400–$1,886,300 · 5% royalty
MOD Pizza$924,732–$1,220,633 · 5% royalty
Twin Peaks$2,959,000–$5,734,000 · 5% royalty
McDonald's$1,470,500–$2,642,000 · 5% royalty
Subway$263,000–$630,000 · 8% royalty
Taco Bell$1,859,750–$4,312,200 · 5.5% royalty
Domino's Pizza$231,450–$743,500 · 5.5% royalty
KFC$2,107,575–$4,155,000 · 5% royalty
Burger King$2,039,200–$4,730,600 · 4.5% royalty
Chick-fil-A$317,521–$3,463,155 · non-%-of-revenue royalty
Nekter Juice Bar$243,155–$647,160 · 6% royalty
Keep going
- Penn Station and Dunkin' are both food & beverage franchises; Penn Station's total investment starts about $24,900 lower than Dunkin''s. Dunkin' Franchise
- Penn Station and Jamba are both food & beverage franchises; Jamba's total investment starts about $26,650 lower than Penn Station's. Jamba Franchise
Where this came from: California DFPI Registration Renewal, App ID app-31614, filed 4/19/2024, effective 11/21/2024. FDD issued March 31, 2024. Item 5: $25,000 Initial Franchise Fee plus a $3,500 Site Development Fee at signing of the Single-Unit Development Agreement. Item 6: royalty is not a flat percentage -- it's a graduated scale per restaurant based on monthly net sales per person: 2% under $30,000/mo, stepping up in $5,000 bands to 8% above $55,000/mo; left null here rather than forced into a single number. Separately, a National Fund (ad fund) currently 2% of net sales (escalatable to 4%) and Local Advertising up to 2%. Item 7 TOTAL FOR SINGLE-UNIT FRANCHISEES: $507,500-$858,750 (excludes real estate). Item 20 Table 1 franchised outlets; company-owned held flat at 1 throughout. You can pull the same filing yourself from the California DFPI's public franchise search. Filed 2024-04-19. None of this is investment advice -- get the franchisor's current FDD and talk to a real attorney or accountant before you sign anything.
If you see a different unit count elsewhere: franchisors only have to refile their FDD annually, so the numbers here can run 6–18 months behind a franchisor's own real-time marketing claims -- which often aren't independently verified, and sometimes count signed-but-not-yet-open locations. A gap isn't necessarily an error on either side; it's two different snapshots in time from two different sources.