Penn Station East Coast SubsFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Penn Station East Coast Subs franchise requires a total initial investment of $474K – $765K, including a $25K franchise fee. Per the 2025 FDD, average unit revenue was $817K[2]. SBA 7(a) loans show a 0.0% charge-off rate across 14 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $474K – $765K
- 31st pct Service Resta…
- Avg gross sales
- $817K
- 6th pct Service Resta…
- Royalty
- N/A
- Units
- 322
- 46th pct Service Resta…
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Only 0.0% of 14 SBA loans charged off, well below the 16% franchise average.
Franchising since 1987. Systems this mature have refined operations and brand recognition.
Franchised units fell from 321 to 318 over 3 years. Investigate why operators are leaving.
19% cash-on-cash return (based on Cash Flow). Within the 15-30% range most franchise investors consider acceptable.
Bottom line
- Total investment $474K – $765K including a $25K franchise fee.
- Average unit revenue of $817K/year (median $773K), with an estimated 19% cash-on-cash return (based on Cash Flow).
- Verdict A (Top Quintile) with a risk score of 49/100. SBA loan charge-off rate of 0.0% across 14 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 67% of franchisees own multiple units, a high repeat-buyer signal suggests strong unit economics.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Penn Station, Inc.
- CEO title
- Chief Executive Officer and Member of the Board of Directors
- Jeffrey J. Osterfeld
- CEO experience
- 1987 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- OH
- HQ
- 1226 US Highway 50, Milford, Ohio 45150
- Auditor
- Shriver & Company
- Audited financials
- Franchisor revenue
- $22.6M
- vs $22.3M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Affiliated brands
- Penn Station Realty Ltd
Other brands the franchisor or its parent operates (Item 1).
Overview
About
Penn Station franchisees operate quick-service submarine sandwich shops, preparing fresh-made subs to order and managing counter service, inventory, staffing, and local marketing. Daily operations center on food prep, customer service, point-of-sale management, and adherence to brand standards across a typical 1,500–2,500 sq ft footprint.
- CEO
- Jeffrey J. Osterfeld
- Headquarters
- OH
- Founded
- 1985
- FDD year
- 2025
- States available
- 14
FDD Item 7 · 2025 filing · 18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Site Development Fee for Single-Unit Franchiseesnot refundable | $4K | $4K | |
| Territory Fee for Multi-Unit Franchiseesnot refundable | $7K | $7K | |
| Initial Franchise Feenot refundable | $25K | $25K | |
| Real Property | — | — | |
| Store Constructionnot refundable | $262K | $381K | |
| Equipmentnot refundable | $149K | $235K | |
| Opening Inventorynot refundable | $5K | $15K | |
| Telephone Depositnot refundable | $25 | $150 | |
| Insurance (per year)not refundable | $596 | $7K | |
| Lease Security Depositnot refundable | $840 | $12K | |
| Utility Depositnot refundable | $25 | $2K | |
| Additional Funds for First 3 Monthsnot refundable | $10K | $21K | |
| Site Advertising for Openingnot refundable | $0 | $10K | |
| Design Fees for Constructionnot refundable | $15K | $20K | |
| Legal Fees; Organizational Costsnot refundable | $316 | $12K | |
| Pre-Opening Interest Costnot refundable | $0 | $11K | |
| Travel, Room and Board to Attend Training Programnot refundable | $2K | $10K | |
| Permits/Licensesnot refundable | $100 | $2K | |
| Total initial investment | $481K | $772K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$82K
10.0% margin
Unlevered ROIC
13%
EBITDA / total invested capital
Payback
7.8 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $474K – $765K
- Better than avg vs category
- Liquid capital req'd
- $10K – $21K
- Better than avg vs category
- Franchise fee
- $13K – $25K
- Better than avg vs category
- Royalty
- Varies depending on monthly net sales: 2% on net sales <=…
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 4.0%
- vs 9–13% typical
- Payback period
- 5.3 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty (flat) | Tiered: 2% on net sales <$30,000 (0% within applicable 5 year period); 3% on $30,000-$35,000; 4% on $35,000-$40,000; 5% on $40,000-$45,000; 6% on $45,000-$50,000; 7% on $50,000-$55,000; 8% on >$55,000 |
| Marketing / ad fund | 2.0% of gross sales |
| Training fee | $300 |
| Transfer fee | $3K |
| Renewal fee | $5K |
| Inventory (initial) | $11K – $16K |
| Total fee load | 4.0% of rev |
A 4.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
Financial Performance
- Avg gross sales
- $817K
- Per unit, per year
- Median gross sales
- $773K
- Avg cash flow
- $117K
- Reported as Cash Flow in FDD Item 19
- Cash-on-cash
- 19.0%
- Based on Cash Flow / investment midpoint
- Item 19 type
- Historical Performance
- Sample size
- 313 units
- vs category median 13 · large
- Range (low → high)
- $302K→$1.9M
- Cohort dispersion (min → max)
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Penn Station East Coast Subs Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 322
- Opened
- 6
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Multi-unit owners
- 66.7%
- Net growth (yr3)
- -0.3%
- Net unit change last year
- 3-yr CAGR
- +0.9%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 4
- Closed (3yr)
- 1
- Terminated (3yr)
- 2
- Transfers (3yr)
- 25
- Projected new
- 6
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- California
- Hawaii
- Illinois
- Maryland
- Michigan
- Minnesota
- North Dakota
- Rhode Island
- South Dakota
- Virginia
- Washington
- Wisconsin
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 14
- Loan volume
- $9.9M
- Median loan
- $371K
- 50th percentile
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 10
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Penn Station East Coast Subs's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 5 states
- Startup risk premium and job creation velocity
- 8-year lending trend
Instant access. No subscription.
With a 0.0% charge-off rate across 14 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Mature, stable but stagnant franchise system with declining unit count, compressed profit margins, and limited financial transparency—suitable only for operators comfortable with modest returns and patient capital.
Litigation (Item 3)
No litigation required to be disclosed
Largest disclosed settlement: $25,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Shriver & Company
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 49 / 100 rating
- 01MINORDeclining unit count (-0.3% YoY on 322 units) suggests stagnant or contracting system growth
- 02MINORWide royalty range (0-8%) creates unpredictable cost structure; unclear how many units hit 8% tier vs. benefit from abatement
- 03MINORNet income of $117,415 on $816,785 revenue (14.4% margin) is modest for QSR; leaves little buffer for economic downturns or underperformance
- 04HIGHNo disclosed litigation is positive, but absence of Item 19 financial data limits ability to validate average unit volumes and profitability claims
- 05MINORHigh initial investment ($473K–$765K) paired with modest average net income creates extended payback period risk
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Online sales rights | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Ohio |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 25 hrs
- On-the-job training
- 202 hrs
- Training location
- On-site and off-site
- Ongoing training
- Required
- Site selection
- franchisee
- POS system
- North Key
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: North Key
Item 20 · call current owners
Franchisee Contacts
97 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Penn Station East Coast Subs · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Penn Station East Coast Subs franchise?
The total investment to open a Penn Station East Coast Subs franchise ranges from $474K – $765K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Penn Station East Coast Subs franchise owners earn?
According to Item 19 of the Penn Station East Coast Subs FDD, the average gross sales per unit is $817K. The median is $773K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Penn Station East Coast Subs's franchise failure rate?
Based on SBA 7(a) loan data, Penn Station East Coast Subs has a charge-off rate of 0.0% across 14 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Penn Station East Coast Subs franchise locations are there?
As of their most recent FDD filing, Penn Station East Coast Subs has 322 total units in the United States, including 321 franchised units and 1 company-owned units. 6 new units were opened in the latest reporting year.
Is Penn Station East Coast Subs a good franchise to buy?
FranchiseVerdict rates Penn Station East Coast Subs as a A-grade franchise with a risk score of 49 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.