2026 FDD Issued Apr 20, 2026, amended Sep 4, 2026 Minnesota Commerce (CARDS) Checked Nov 2, 2026
Penn Station East Coast Subs Franchise Cost (2026)
A Penn Station East Coast Subs franchise costs an estimated $440,600 – $819,700 to open, according to Item 7 of the 2026 Franchise Disclosure Document (FDD). That total includes the $25,000 initial franchise fee (Item 5) and covers this format: Single Restaurant. Item 6 lists royalty: 2% – 8% of Net Sales, subject to the conditions below.
- Total investment
- $441K – $820KItem 7 source and qualifications
- Franchise fee
- $25KItem 5 source and terms
- Royalty
- 2% – 8% of Net SalesItem 6 conditions and fee bases apply
- Brand fund
- 2% of Net SalesItem 6 conditions and fee bases apply
- Units (2025)
- 322Item 20 source and scope
- Franchise exit rate
- 1.7% / yrCalculated 3-year average; definition and source
What stands out about Penn Station East Coast Subs
The royalty rises with each restaurant's monthly sales. Item 6 charges a low rate in a slow month and steps up in bands to a much higher rate in a strong one, and in the early years a month below the lowest band carries no royalty at all. A busy restaurant therefore pays a far larger share of sales than a struggling one, which also means this page cannot estimate yearly fees from a single sales figure.
Item 19 covers every franchised restaurant open all year and goes down to EBITDA. Average net sales were $819,903, with fewer than half of restaurants reaching that level, and the franchisor-defined EBITDA after food, labor, rent, royalty and a general manager's salary averaged a small fraction of sales, with some restaurants losing money.
The system is steady rather than growing. Item 20 shows the franchised count at 321 at the end of 2025, with a handful of openings offset by owners who chose to close, and no terminations. The current agreement runs 10 years from opening with one renewal, and the national fund can rise above its current rate.
What are the initial franchise fees and financial requirements for Penn Station East Coast Subs?
Item 5 lists an initial franchise fee of $25,000 for Penn Station East Coast Subs. Check the cited Item 5 for payment timing, discounts and format-specific terms.
Item 5 (PDF pages 12-14): the initial franchise fee is $25,000 before the restaurant opens, or $12,500 per restaurant for franchisees who sign a Multi-Unit Agreement for at least three restaurants during 2026 under the Multi-Store Incentive Program. A $13,500 Site Development Fee (single unit) or Territory Fee (per restaurant under a Multi-Unit Agreement, minimum $27,000) is paid at signing; $10,000 of it is credited to the franchise fee if the lease deadline is met. Fees are non-refundable.
Source: Penn Station East Coast Subs 2026 FDD, Item 5, PDF p. 12.
This record lists no minimum net worth or liquid-capital requirement for Penn Station East Coast Subs, because no sourced figure has been recorded. Ask the franchisor for its current financial qualifications in writing.
How much does it cost to open a Penn Station East Coast Subs franchise? (Item 7)
Source: Penn Station East Coast Subs 2026 FDD, Item 7, PDF p. 22.
Item 7 of Penn Station East Coast Subs’s 2026 Franchise Disclosure Document estimates the total cost to open one single restaurant at $440,600 – $819,700. This total includes the initial franchise fee.
| Expense Category | Low ($) | High ($) |
|---|---|---|
| Site Development Fee | $13,500 | $13,500 |
| Initial Franchise Fee | $25,000 | $25,000 |
| Store Construction | $185,700 | $366,500 |
| Equipment | $177,800 | $271,900 |
| Opening Inventory | $9,200 | $25,000 |
| Additional Funds for First 3 Months | $10,000 | $20,900 |
| Insurance | $900 | $4,600 |
| Design Fees for Construction | $12,300 | $18,600 |
| Lease, Utility and Miscellaneous Deposits | $1,000 | $7,800 |
| Legal Fees; Organization | $0 | $7,200 |
| Pre-Opening Interest Costs | $0 | $17,000 |
| Travel, Room and Board to Attend Training | $3,500 | $8,000 |
| Site-Advertising for Opening | $0 | $10,000 |
| Miscellaneous Opening Costs | $1,500 | $22,700 |
| Permits/Licenses | $200 | $1,000 |
| Total | $440,600 | $819,700 |
Other formats
| Format | Total investment |
|---|---|
| First Restaurant under a Multi-Unit Agreement | $454,100 – $833,200 |
For comparison, the median high-end investment among 25 restaurants & food records without a source-review hold is $1,297,100.
Item 7 (PDF pages 22-26) prints $440,600 to $819,700 per restaurant for single-unit franchisees, excluding lease payments; its 15 lines add to that total and count both the $13,500 Site Development Fee and the $25,000 franchise fee without the $10,000 credit. The first restaurant under a Multi-Unit Agreement prints $454,100 to $833,200 because of the $27,000 minimum Territory Fee. Construction and equipment are the largest lines.
What ongoing royalties and fees does Penn Station East Coast Subs charge? (Item 6)
Source: Penn Station East Coast Subs 2026 FDD, Item 6, PDF p. 15.
Item 6 of Penn Station East Coast Subs’s 2026 FDD lists the charges below. Recurring charges and charges triggered by a transfer, renewal or other event have different conditions. Read each fee’s basis and notes before comparing rates.
How to read an Item 6 fee table.
| Fee Type | Amount / Rate | Payment Frequency | Notes & Source |
|---|---|---|---|
| Royalty | 2% – 8% of Net Sales | Every period | Set monthly by Net sales per restaurant: 2% under $30,000 (0% in the first five years), 3% from $30,000 to $35,000, 4% to $40,000, 5% to $45,000, 6% to $50,000, 7% to $55,000 and 8% above $55,000; paid by the 10th. Royalties may be abated for 180 days under the Multi-Store Incentive Program or 365 days for an Underperforming Restaurant (note 1). (Item 6, PDF p. 15) |
| Local Advertising | Varies | When it applies | If required on 30 days' notice, up to 2% of total net sales per year, excluding required loyalty, gift card, promotional and grand-opening programs (note 2). (Item 6, PDF p. 15) |
| Cooperative Advertising | Varies | When it applies | As set by franchisees with the franchisor's consent; counts toward the local advertising obligation (note 3). (Item 6, PDF p. 15) |
| National Fund | 2% of Net Sales | Every period | Currently 2% of monthly net sales, which may rise on notice to up to 4% (note 4). (Item 6, PDF p. 15) |
| Additional Training | Varies | When it applies | Currently $300 per day to train or test replacement owners, managers and directors; may rise no more than 25% a year (note 5). (Item 6, PDF p. 15) |
| Renewal | $5,000 | When it applies | $5,000 for the second 10-year term under agreements signed after January 1, 2025 ($1,000 per 5-year renewal under older agreements). (Item 6, PDF p. 15) |
| Transfer | Varies | When it applies | $2,500 for one restaurant up to $10,000 for 10 or more to a buyer; $1,000 to $2,500 for ownership-interest transfers (note 6). (Item 6, PDF p. 16) |
| Relocation Fee | $2,500 | When it applies | $2,500 before construction at the relocation site. (Item 6, PDF p. 16) |
| Late Fee | Varies | When it applies | $100 per late payment plus interest at prime + 3% if more than 10 days late; $100 for late monthly reports and $150 for late semi-annual statements (note 7). (Item 6, PDF p. 16) |
| Indemnification | Varies | When it applies | Claims arising from something you did or failed to do (note 8). (Item 6, PDF p. 16) |
| Costs and Attorneys' Fees | Varies | When it applies | Payable if you breach your agreements (note 9). (Item 6, PDF p. 16) |
| Audit | Varies | When it applies | Audit cost plus late fee if net sales were understated by more than 2% (note 10). (Item 6, PDF p. 16) |
| Failing to Attend Any Required All-Franchisee Conference | Varies | When it applies | Up to $2,500 per person for each missed conference (note 11). (Item 6, PDF p. 16) |
| Use of Non-authorized Architect | Varies | When it applies | Up to $1,500 (note 12). (Item 6, PDF p. 16) |
| Extension of Time | Varies | When it applies | Up to $1,500 for each agreed extension of opening requirements. (Item 6, PDF p. 16) |
| Mandated Suppliers | Varies | When it applies | Purchases from required suppliers (Items 8, 9 and 11). (Item 6, PDF p. 16) |
Explore annual fees and payback assumptions
This fee schedule cannot be reduced to the calculator’s simple sales-based formula. Enter your own assumptions and check them against the Item 6 terms.
Penn Station East Coast Subs startup investment and modeled fees over 10 years
Item 6 sets each restaurant's monthly royalty by that month's Net sales, from 2% below $30,000 to 8% above $55,000, with abatements for new and transferred restaurants. A single annual sales figure cannot show monthly sales levels, so this record does not produce an annual fee estimate or payback preset. See the fee amounts and definitions in Item 6 above. Open the calculator with your own assumptions.
Item 20: Penn Station East Coast Subs franchised outlet history
Source: Penn Station East Coast Subs 2026 FDD, Item 20, PDF p. 83.
Item 20 Table 3 reports 321 franchised outlets at the end of 2025. The company-owned table reports a further 1 outlets. Our calculated average annual franchised exit rate is 1.7% across the 3 reported years, using the definition below.
| Year | Franchised at Start | Opened | Reported Exits | At End | Franchise Exit Rate (%) |
|---|---|---|---|---|---|
| 2023 | 318 | 9 | 5 | 322 | 1.6% |
| 2024 | 322 | 6 | 7 | 321 | 2.2% |
| 2025 | 321 | 4 | 4 | 321 | 1.2% |
Franchised units went from 318 to 321 over 3 years (+3).
Reported exits include terminations, non-renewals, franchisor reacquisitions and other cessations. A reacquired outlet may continue operating. How we calculate the exit rate. How to read the Item 20 outlet tables. Compare Penn Station East Coast Subs’s exit rate with other brands.
25 units changed owners in 2025.
Item 20 Table 3 totals (PDF page 83) match Table 1 (PDF page 80). Every franchised exit in the three years is listed under ceased operations; the footnote says these owners chose not to renew a lease or decided themselves to stop operating. One company-owned restaurant operates.
How much do Penn Station East Coast Subs franchise owners make? (Item 19)
Source: Penn Station East Coast Subs 2026 FDD, Item 19, PDF p. 72.
Item 19 of the 2026 FDD reports annual Average Net Sales, franchised Restaurants open all of 2025 of $819,903 (2025 calendar year, 317 franchised Restaurants open all of 2025; 138 (43.53%) attained or surpassed the average). Besides sales, Penn Station East Coast Subs’s Item 19 reports “Annual Average EBITDA, franchised Restaurants open all of 2025” and “Annual Median EBITDA, franchised Restaurants open all of 2025”. Each figure follows the franchisor’s own definition in Item 19, which decides which costs are deducted and whether an owner’s salary is one of them. None of them is necessarily an owner’s take-home pay.
See every Penn Station East Coast Subs Item 19 figure, with its period and sample.
Payback calculator (enter your own assumptions) Check any inputs against this record’s Item 7 startup costs and Item 6 fee rules.
How to interpret Penn Station East Coast Subs’s Item 19 figures and sample limits.
How long is the Penn Station East Coast Subs franchise agreement term?
Source: Penn Station East Coast Subs 2026 FDD, Item 17, PDF p. 58.
The standard Penn Station East Coast Subs franchise agreement runs 10 years, with renewal terms of 10 years.
Item 17 (PDF page 58): for agreements signed after January 1, 2025, 10 years from the restaurant's opening, with a single 10-year renewal if you are in good standing and your lease continues. Earlier agreements had 5-year terms with 5-year renewals.
How long does it take to open a Penn Station East Coast Subs franchise? (Item 11)
Source: Penn Station East Coast Subs 2026 FDD, Item 11, PDF p. 47.
Item 11 of the 2026 FDD states the time from the earlier of signing the Franchise Agreement or the first payment to opening: (on average) two to six months.
Franchises with a similar investment range
These published records are selected by proximity to Penn Station East Coast Subs’s $440,600 low-end Item 7 investment, starting with Restaurants & Food. Formats, fees and source qualifications differ; the figures are not interchangeable budgets:
- Jersey Mike's $436K – $1.16M Restaurants & Food
- Papa Murphy's $450K – $693K Restaurants & Food
- Nothing Bundt Cakes $475K – $994K Restaurants & Food
- Firehouse Subs $405K – $876K Restaurants & Food
- Cold Stone Creamery $391K – $681K Source review pending Provisional publication Restaurants & Food
- Little Caesars $377K – $1.77M Source review pending Provisional publication Restaurants & Food
Compare other restaurants & food franchises
Sources
Penn Station, Inc. Franchise Disclosure Document, issued April 20, 2026, as amended September 4, 2026, as filed with the Minnesota Commerce (CARDS). Read the source FDD PDF. How to get this FDD yourself.
- Item 5: cited PDF p. 12
- Item 6: cited PDF p. 15
- Item 7: cited PDF p. 22
- Item 19: cited PDF p. 69
- Item 20: cited PDF p. 83
- Agreement term (Item 17): cited PDF p. 58
Page references for Penn Station East Coast Subs use the PDF viewer's digital page count, not printed page headers. Some viewers download the document instead of opening the referenced page.
If the state document viewer does not open, use Minnesota Commerce's public filing instructions to look up the filing by franchisor name and document date.
Document & verification changelog
- November 2, 2026: Source check completed against the recorded FDD.
- November 2, 2026: Initial cost profile published from the 2026 Franchise Disclosure Document (issued April 20, 2026).
- November 2, 2026: Independently checked against the April 20, 2026 Minnesota Clean FDD, as amended September 4, 2026: cover, Items 1, 5, 6, 7, 11, 17, 19 and 20. Recorded the amendment date. Item 6 now lists all 16 rows (the draft had 7) and records the sales-banded royalty. Item 19 now adds EBITDA and drops a median net sales figure printed in an invalid form. Added the opening time, renewal terms and Item 20 notes. Rewrote the analysis.
- September 4, 2026: Amendment date recorded for the source FDD.