![]() I found myself bouncing back and forth between the stores and solving a lot of problems that were rooted in manpower, not having quality people to treat these stores the way I treated them. It was the situation where you’ve got your finger in the dam over here, and you plug this leak, and then that one over there springs a leak, and then the one you fixed three months before is leaking again. I became stretched and had three or four stores between Dayton and Cincinnati. Seeing the success that some of my competitors were having, I opened a second and third store that concentrated on the cheesesteaks and the submarines.Īfter three or four stores, I became somewhat frustrated by the fact that it seemed when I was behind the counter and hands-on, the customers were thanked, the fries were hot, the food was made right and all the cash went in the drawer. So did Great Steak and Fries, and I watched the lines at their stores. At the same time, one of our competitors, Steak Escape, opened up. I got out of Miami University in 1982 and opened up what was a delicatessen. How did you decide that franchising was the best way to expand? Osterfeld talked to Smart Business about how he ensures success for his company and for his franchise owners. He says he gets as many as 600 inquiries a year from prospective franchisees but just a tiny fraction result in a development agreement, usually for only a handful of stores. Little wonder, then, that he gets plenty of calls from prospective investors. He is selective about who gets a franchise agreement, imposes strict stipulations on how they operate and develop and, in turn, offers franchisees an exceptional opportunity to succeed in a tough, competitive environment. To hedge his bets against washouts, Osterfeld’s approach to growth has been deliberate, making sure that he doesn’t open the doors to just anyone who can afford the franchise fee. ![]() “I’m a poor failure, and I have empathy with anyone who would lose their life savings.” “It has more to do with my personality than anything else,” says Osterfeld. Penn Station East Coast Subs has had only one failure in the 155 units it has opened, but that single flop, says Osterfeld, still stings. Jeff Osterfeld, CEO and founder of Penn Station Inc., has an aversion to failure, so much so that he takes every measure possible to make sure it doesn’t happen to any of his franchisees. Too often, the practice leads to high failure rates that penalize franchisors and leave owner-operators broke. The territory fee is equal to $3,500 multiplied by the total number of Penn Station franchises the franchisor may agree on with you to be opened and is in addition to the total investment range described above for one franchise.For many quick-service food franchises, the quick applies as much to the way units are plastered over the landscape as it does to the level of service. The territory fee is applicable only if you and the franchisor agree to enter into a multi-unit development agreement. For an additional territory fee, the franchisor also may elect to offer to you the right to open multiple Penn Station franchises in a specified territory under a mutually agreeable opening schedule. This includes the $25,000 that must be paid to Penn Station, Inc. The total investment necessary to begin operation of a single Penn Station franchise (excluding the amount of any site reservation fee or territory fee) ranges from $383,844 to $613,764. Their principal business address is: 1226 US Highway 50, Milford, Ohio 45150. The franchisee will own and operate an upscale, prepared to order “East Coast” style cheesesteak and submarine sandwich restaurant business. Penn Station FDD – Franchise Information, Costs and Fees Item 20: Outlets and Franchisee Information.Item 19: Financial Performance Representations.Item 18: Arrangements with Public Figures.Item 17: Renewal, Termination, Transfer and Dispute Resolution.Item 16: Restrictions on What the Franchisee May Sell.Item 15: Obligation to Participate in the Actual Operation of the Franchise. ![]()
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