Penn Station Looks to Build on Development Momentum in Nashville

After years of slower, conservative growth in the market, Penn Station East Coast Subs is accelerating development plans for new restaurants in Nashville. The city is already home to over five Penn Station restaurants, but the franchise is planning to leverage brand awareness and increased demand from those locations to support up to 30 new restaurants in the market in the next five to ten years.

“Nashville is a very exciting market for us,” said Greg Goddard, Penn Station’s Director of Development. “We’ve done very well there, in spite of the few locations we actually have opened. With this success, we believe we still have a lot of room for growth.”

According to Goddard, that combination of successful existing stores and room for growth is a rare sweet spot for development, one that allows new franchise owners to benefit from established brand awareness while accommodating long- or short-term, multi-unit growth plans.

“It’s not often that you have a market where customers know and love the brand and there’s still room for so many more units,” he said. “That means that new owners in the market could hit the ground running without having to cultivate a new customer base. This in turn should allow them to be set for large-scale growth.”

The Nashville area’s most recent Penn Station opened in Murfreesboro last September, and Goddard says that store’s success bodes well for new owners in the market.

“Our Murfreesboro restaurant opened in the third quarter last year and has done really well,” he said. “In a way, that store was the first test to see how much the brand awareness and demand we’ve built in the market would affect new openings in the area, and the result was extremely encouraging. There is a level of demand in Nashville that we aren’t any where near satisfying.”

All of the area’s existing stores are owned by just two franchisees. Goddard says multi-unit ownership is not unusual for Penn Station, and the brand is hoping to bring on more large multi-unit owners in Nashville.

“Our system is designed to support multi-unit growth,” he said. “Our menu, the display cooking kitchen, even our royalty structure — really everything we do, is designed to keep a lower overhead for owners so they can scale up their unit count and see an exponential return on their investment as they continue that expansion.”

To take advantage of the franchise’s substantial room for growth in Nashville, Goddard said the brand is looking to bring on “experienced multi-unit franchisees who are looking to grow quickly.” He also added that Penn Station’s Development Incentive Plan, which charges franchisees no royalty fee for the first 12 months of an opening, is further designed to spur growth in not only Nashville, but other burgeoning markets as well.

“That may mean a handful of franchisees signing on for multiple units and scaling up over a few years, or it could mean just one or two franchisees signing larger deals to corner an entire market,” he said.

“We’re open to different structures,” he said. “There’s certainly room for a number of franchisees working in neighboring territories, but this is an opportunity for one or two veteran franchisees to come in and set up a large portfolio of Penn Station locations in a single market.”

Goddard is confident Penn Station will have little trouble finding qualified franchisees to shepherd the brand’s expansion in Nashville.

“This is a unique opportunity in the franchise world, and anyone who knows the industry and takes a look at the opportunity will see that. With a corporate area representative based in Nashville and a strong relationship with the local real estate community, Penn Station is excited to find some talented new multi-unit franchisees to build upon the brand awareness already established.