Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. If you’re a franchisee with advice and tips to share, email email@example.com.
For nine years, Robert Shingleton worked on Wall Street, running a fixed-income arbitrage portfolio. Then, in 1997, he did a 180-degree turn into franchising. Today he owns 14 Penn Station East Coast Subs restaurants in Lexington, Kentucky, and St. Louis, Missouri. On the side, he’s done Penn Station’s online marketing since an email marketing effort he embarked on for his own stores brought the system’s other franchisees on board, as well.
Name: Robert Shingleton
I wanted to invest in and run my own business, so I was looking for opportunities with solid returns and growth potential. I considered many options, including several franchises, existing businesses that were for sale and real estate. Ultimately, I appreciated the stability of a growing franchise concept with a proven track record, especially in the restaurant field.
What were you doing before you became a franchise owner?
I spent nine years in New York, where I ran a fixed-income arbitrage portfolio. I started on a derivative products trading desk and used those products, along with fixed assets, to manage a $2 billion portfolio.
Why did you choose this particular franchise?
I chose Penn Station for three main reasons: First, Penn Station offered unmatched profitability and return on investment in the industry. For me, buying a franchise was first and foremost an investment, and Penn Station was able to clearly show me above-average returns for the industry.
Second, the food is excellent. When you try the food, it is clear Penn Station is not your average sub shop. Everything is made to order with high-quality ingredients, and the product really stood out compared to other concepts I looked at.
Third, Penn Station has very good operating systems. One of the main benefits of opening a franchise are these proven systems, so this was important to me.
How much would you estimate you spent before you were officially open for business?
My first restaurant cost about $225,000. That included the franchise fee, restaurant build-out and equipment, opening inventory, legal fees and training.
Where did you get most of your advice/do most of your research?
I started with online research and then received more detailed information from individual concepts. I also talked to business brokers and networked with accountants and attorneys. I talked to the franchisor and then met with some of the franchisees in the system.
What were the most unexpected challenges of opening your franchise?
The permitting process significantly lengthens the time it takes to open a restaurant. After plans are drawn, you have to get them approved for building permits. Then, there are all kinds of inspections that have to be done. Even if you fast-track a store opening, it can take up to six months to complete because of all the time it takes to get everything approved. I recommend making sure the forms get to the right people the minute something is done. You don’t want to add unnecessary lag time.
What advice do you have for individuals who want to own their own franchise?
From an investment standpoint, I tell people to research beyond the advertised returns of various concepts, so that you really understand the risks and potential returns. Once you go with a franchise system, “buy” into that system by following the guidance of the franchisor. Also, make sure you are properly capitalized to survive if your operations open below projections. Many of my best stores opened below the system average but are now well above that average.
What’s next for you and your business?
I plan to continue to invest in new Penn Station restaurants and my other business interests, which include a digital marketing company. My 27-year-old son is also an employee of my restaurants, so I’d like to see him continue to grow in the business as well.