Subway Franchise Cost vs. Penn Station Subs Franchise: How they Compare

Subway Franchise Cost vs. Penn Station Subs Franchise: How they Compare

The saying is, “the proof is in the pudding,” but for the sandwich franchise industry, the proof is really between two slices of bread. Investors looking to get a bite out of the sandwich franchise industry have several options and should carefully consider multiple available brand opportunities. Savvy prospective franchisees are looking beyond larger chains, such as Subway, as part of their due diligence process to carefully evaluate the right sandwich franchise opportunity for their investment.

Alternative Sub Sandwich Franchise Success

While a large name brand may initially be appealing to invest in, consideration of the growth and development territory expansion opportunities is critical for return on investment and portfolio building. A growing alternative sandwich franchise can be a lucrative opportunity to invest in because it has more growth potential for the franchisee as well. Consumers crave new and unique dining options in the fast food and fast-casual space and desire a variety of brands. While alternative sub franchises may potentially have some a higher initial investment, the growth and return potential should always be factored into the decision-making equation. Another important factor is the daypart opportunity for the business. Is the sandwich chain you are evaluating typically empty at night and known mostly as a quick and cheap lunch option, or do they also attract the dinner crowd? Penn Station, with its fresh, grilled to order, hot sandwiches and fresh-cut fries enjoys a lunch and dinner daypart that is almost evenly split.

Potential sandwich franchisees should always carefully review the Franchise Disclosure Document (“FDD”) and connect with current franchisees of the brand they are evaluating. They should ask questions about the business, their return on investment (“ROI”), competency and strength of management, and evaluate the franchisee satisfaction levels. They should also ask if they would do it again if they had the chance to start from scratch. In a 2022 Franchise Business Review survey, Penn Station outperformed the national average of franchisees who say they would still invest and “do it all over again” if they had the chance with 68.8% of franchisees saying “yes, they would invest all over again knowing what they know today.”

 

Between the Bread

Building a good sub sandwich franchise is a little like building a knock-out BLT sandwich. There are a few main ingredients you need to set up a business venture for success. If the bacon is too saturated, it ruins the whole bread. If there’s not enough lettuce, is it really a BLT? If the tomatoes are too small, you just have bacon and lettuce—and that’s no sandwich. Looking at how much your bacon, lettuce, and tomato costs can show it’s worth, too—you know, you get what you pay for. Let’s compare Subway’s franchise “BLT” scenario to Penn Station’s.

Market Saturation (The Bacon)

With more than 20,000 locations in the U.S. alone and in every state, Subway is present in just about every market imaginable. However, this can make it difficult to stand out among the sandwich crowd. With so many locations, new growth opportunities for franchisees may be a challenge because many of the prime franchise development territories are already taken.

Our East coast style sub chain is not confined to just the shoreline. Penn Station is currently growing throughout the Mid-West and East coast with future growth opportunities across the country. There are currently more than 300 locations with more growth opportunities and market territories coming available regularly. Now is a perfect time to get in early on a growing, thriving chain.

Franchise Expansion Opportunities (The Lettuce)

Subway has expanded into nearly all markets, and by some estimates there are more Subways than McDonalds in the world. Large brands that have reached unit saturation in markets may typically have far fewer growth opportunities for potential new franchise investors because new growth is often awarded first to current franchisees that are already a part of the system.

With a brand in growth mode, such as Penn Station, the sky is the limit when it comes to expansion opportunities in many major markets. Our team will help you evaluate potential site locations targeting a variety of demographics without overly saturating the market and consumer demand for the area.

Franchise Support (The Tomato)

At Penn Station, we strive to keep our training focused and filled with exactly what franchisees need to be successful in their new restaurant. Our comprehensive, award-winning franchisee training is completed in four weeks in Cincinnati, Ohio. Our ongoing, best-in-class franchisee support includes assistance with site selection, design and construction assistance, support with online ordering and IT, training, marketing, national advertising, and P&L financial reporting.

In comparison, Subway offers a three-week training program with virtual classroom training and in-restaurant experience. They also offer a Business Development Agent program and a national advertising program, which comes as part of that 4.5% advertising fee.

Subway Franchise Cost Compared to Alternative Sub Sandwich Franchises

The initial investment to open a Subway franchise costs between $207,050 and $479,900. This range includes the $15,000 initial franchise fee for each Subway franchise location you open. Subway franchise owners can expect to pay a royalty fee of 8% of gross sales, and an advertising fee of 4.5% of gross sales. Subway franchise candidates should have a net worth of $150,000 and at least $100,000 in liquid assets.

Penn Station Subs is a great sub sandwich franchise alternative to Subway. The initial investment costs to open a Penn Station Subs franchise location ranges between $365,361 and $696,030. This includes our franchise fee of $25,000 and area development fee of $3,500. Penn Station Subs franchisees pay a royalty fee of 2% to 8%, which is a sliding scale based on each sub shop’s sales volume, and a national advertising fee ranging between 2% to 3%. Penn Station Subs franchise candidates should have a net worth of $500,000 and $300,000 in liquid cash.

Franchise with Penn Station Subs

It’s an exciting time to get in on an innovative and growing franchise. Penn Station goes above and beyond the classic BLT in both their business opportunity and menu options. With high-quality ingredients in sandwich concoctions that stretch from lunch to dinner, our menu is creating a new idea of what a sandwich shop can offer.

We are dedicated to helping our franchisees create sustainable success. We offer extensive training and ongoing support for every one of our franchisees and locations. Penn Station is also privately owned, enabling us to have agile, strategic, long-term goals in every part of the business.

If you’re dedicated to personal excellence, have great customer service skills, and are ready to expand your portfolio, contact usfor more information on franchising opportunities.