The grilled-sandwich brand is targeting one of Missouri’s largest cities for future growth
Since the first Penn Station restaurant opened in Cincinnati, Ohio over 30 years ago, the brand has systematically grown their footprint, with franchise owners opening more than 300 locations throughout 15 states in the Midwest. For the next phase of its growth strategy, Penn Station is seeking experienced candidates to own and operate a slate of new restaurants in Kansas City, Missouri.
Greg Goddard, Director of Development and Franchising for Penn Station, said Kansas City is a key market in the brand’s overall expansion efforts.
“The Midwest has always been extremely kind to Penn Station,” Goddard said. “People love the product, and because we grew out from Ohio, there’s fantastic brand awareness and goodwill toward the brand in the Midwest. Kansas City has been on our radar because its demographic make-up aligns well with our existing base of restaurants in Saint Louis, Missouri. Part of our development strategy is building out each market we enter, so we are looking to take advantage of the success we’ve already had with our two stores in the KC area to keep growing in the market.”
Though the Penn Station brand is well established throughout the Midwest, Goddard sees a lot of room to grow in Kansas City, where customers who know the brand are eager to find more accessible locations. There is hard data backing up Goddard’s optimism. Data extrapolated from Penn Station’s demographic analytics model show the market can accommodate 30 or more Penn Station restaurants, and the brand’s management is excited to fulfill that potential.
“Kansas City represents a rare and valuable opportunity for immense growth in an area where we already have some brand awareness,” Goddard said. “It’s not often that you can develop a market that has been seeded with restaurants yet still has the geographic space and density for a multi-unit operator to scale a different concept, but that’s what we’ve found in Kansas City.”
According to the demographic analytics model, Kansas City shares key variables with many of Penn Station’s most successful markets.
"Our analytical model takes into account roughly 4,500 data points and benchmarks the information against the top 20 percent of our system,” Goddard said. “The output allows us to better understand the trade area and determine the factors that influence unit-level success. When we analyzed Kansas City, we found the anecdotal evidence we already suspected, which is that Kansas City has the same demographics that traditionally support strong Penn Station restaurants, was supported by the data.”
Goddard said that Penn Station’s primary selling point to Midwestern consumers is its simple and universally appealing product.
“You have working families in the Midwest. Folks are looking for something quick and comforting during their lunch hour as well as a place they can take their whole family on nights and weekends. Grilled subs and fresh-cut fries are the perfect solution for that. It’s fast, it’s hearty, it’s comforting, and it makes everyone happy. System-wide, our stores maintain a 50-50 lunch-dinner split, which is a rarity in the sandwich category.”
Kansas City also boasts a pool of professionals with diverse backgrounds, something Goddard says his team looks for when developing a market.
“Kansas City has entrepreneurs at all different stages in their careers with all different sets of experiences,” said Goddard. “That’s very important to us when we’re seeking new owners for Penn Station restaurants. As the brand grows, we are always looking to owners to help us expand our brand in a growing market. We see an enormous potential for growth when we can pair a local franchisee’s knowledge of the market with our system, and that’s the opportunity we have in Kansas City.”
Kansas City already has two Penn Station restaurants in operation, and Goddard said the Penn Station development team is not only looking for new owners, they are also eager to help the existing owners expand their operations with new units.
“As excited as we are to bring new talent on board, we’re just as excited to help our existing franchisee in Kansas City to grow their business. When a Penn Station owner opens an additional restaurant, they are bringing all of their knowledge, experience, and passion with them to the new location in a new neighborhood. Plus, it’s always fun for us to work with owners who we have known for years; we are their biggest cheerleaders, and it’s so satisfying to watch them grow. Our franchisees have a lot of longevity, and currently, the average number of units per Penn Station owner is seven.”
Startup costs to open a Penn Station range from $293,102 to $593,027, and Goddard said the development team is looking for owners who can meet those investment requirements and have the passion and work ethic to grow with the brand, whether they are new to Penn Station or longtime franchisees.
“Our operational model is extremely simple,” Goddard said. “It doesn't require a special degree or years of experience. It requires hard work, diligence, ambition, and a passion for working with people. We are looking for people who love Penn Station and are excited to share that passion.”