Low Startup Cost Franchise: Financing Your Penn Station Venture

Entering the franchise world  is exciting, but like all business ventures, demands an upfront capital investment. Securing a source of financing can be one of the major concerns for potential franchisees. At Penn Station East Coast Subs, we understand, and we are here to guide you through the franchising process. Opening a low startup cost franchise, like Penn Station, can help minimize overall costs. Let’s look at some financing options and how you might be able to manage costs effectively.

Understanding the Investment

At Penn Station East Coast Subs, transparency is key. Before diving into financing options, it’s crucial to understand the financial commitments involved. The total investment for a Penn Station franchise ranges from $366,693 to $820,026* per restaurant, including the $25,000 initial franchise fee. Compared with other franchises, Penn Station can be considered a low startup cost franchise. According to a Business Insider article published in March 2023, a Chick-fil-A franchise can cost up to $2.9 million to open up (and isn’t the typical franchise model), and a McDonald’s or Wendy’s franchise can cost upwards of $1 million. Having lower startup costs may mean more capital for other aspects of a business.

We also set clear financial prerequisites for our franchisees: a net worth of $500,000 and $300,000 in either cash or liquid assets. This is to ensure that our partners are well-prepared to take on the venture and see it through to success. For a full breakdown of costs, fees, and requirements, review our latest franchise disclosure documents (“FDD”).

Exploring Financing Options

While Penn Station East Coast Subs offers a low-cost franchise opportunity, we understand that owners may choose to explore various funding options. We do not offer or endorse direct financing, but we can help introduce you to banks we have connections with. These banks could be potential financing sources, but remember, the choice is entirely yours. We do not receive any benefits for recommending these banks, and it is essential to conduct your own research on the best funding source for you. Here are some typical financial avenues franchisees may use to fund their dream of owning a business — from traditional loans to more creative ways:

1. Traditional or conventional bank loans: Sometimes, the traditional route may be the best option for entrepreneurs. Credit unions, banks, and other financial institutions usually offer conventional business loans — some may even be geared toward franchising. Do your own research to see what interest rates and borrowing terms may be available to you.
2. Small Business Administration (SBA) loans: The SBA offers loans tailored for small businesses, which can be especially beneficial for franchisees. These loans are federally backed, which reduces the risk for lenders. Some of their loan options even include continued support and education. You can borrow from as little as $500 to as much as $5.5 million if you qualify. Depending on your situation, SBA loans may be more favorable for you. There are three main SBA loans:
   • 7(a) Loans — The SBA claims capped interest rates and limited fees make up the SBA’s primary business loan program.
   • 504 Loans — Loans up to $5 million for major fixed assets with long-term, fixed rate financing.
   • Microloans — Loans up to $50,000.
3. Franchise group ownership: If the financial commitment seems daunting, remember that joining forces can ease the burden, even with a low startup cost franchise. Penn Station East Coast Subs allows franchise ownership as a group. Many of our most recent locations are owned by business partners and groups. This can be a great way to split costs and utilize different skill sets.

Managing Costs Effectively

Choosing a low startup cost franchise like Penn Station East Coast Subs is the first step in cost-effective management. But managing costs effectively also means minding ongoing businesses expenses. Here are a few strategies to keep in mind:

Budgeting: Regularly review and adjust your budget to account for changing circumstances and to optimize operations. Our focused Managing Owner training goes over best bookkeeping practices and general operations. With this training, you’ll be up to speed on how to properly manage your books.

Leverage franchise support: Penn Station East Coast Subs provides comprehensive training and support. Make the most of these resources to optimize operations and minimize unnecessary expenses. Penn Station’s support, from marketing to operations, restaurant development, and financial reporting is invaluable for elevating your business in consumers’ minds.

Penn Station East Coast Subs, as a low startup cost franchise, presents a potentially advantageous opportunity for franchisees. We offer ongoing support to help our franchisees manage costs, business operations, marketing, and so much more. The support and guidance we provide are what your fees and investments pay for, in part. In addition, we help with:

• Site selection
• Restaurant design and construction support
• IT and online ordering
• Operations and training

Whether you’re experienced or new to entrepreneurship, consider Penn Station East Coast Subs as your ideal franchise choice. Request information about Penn Station to get started today.