Penn Station COO Craig Dunaway: How Concentric Growth Strategy Built a Fast Casual Empire | Restaurants & Franchises Series

Anthony Codispoti : Welcome to another edition of the Inspired Stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codispoti and today’s guest is Craig Dunaway, Chief Operating Officer at Penn Station East Coast Subs. Founded in 1985 and headquartered in Milford, Ohio, Penn Station lives by the motto, It’s All About Good Taste, delivering delicious subs, fresh cut fries and refreshing lemonade. Craig has been a part of Penn Station for a long time, initially starting as a multi-unit franchisee and now overseeing daily operations and keeping the brand’s reputation for quality, front and center. Before joining Penn Station, he served as a partner at an accounting firm in Indiana, gaining valuable expertise in financial management. Under Craig’s guidance, Penn Station has continued to grow, delighting customers across multiple states with its focus on fresh ingredients and friendly service. The brand has cultivated a loyal following thanks to its unwavering commitment to quality.

He brings decades of experience in hospitality and has played a key role in Penn Station’s ongoing success. Now before we get into all that good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company and some organizations may not be eligible.

To find out if your company qualifies, contact us today at addbackbenefits.com. All right, back to our guest today, the COO of Penn Station, Craig Dunaway. I appreciate you making the time to share your story today.

Craig Dunaway: Anthony, thanks for having me on. It’s an honor to be here with you today.

Anthony Codispoti : All right, let’s hop right into it. So, Craig, let’s go back a little bit before Penn Station and tell us a little bit about your time at Macaulay, Nicholas, an accounting firm. What kind of work were you focused on there? And maybe we’ll segue into, like, how did that later help the work that you were doing as a franchisee?

Craig Dunaway: Yeah, you know, my father was an accountant and at a very young age, and this is probably a little bit unique, I knew I wanted to be a CPA. Didn’t know at the time what a CPA did, but I knew I loved numbers and I wanted to be around numbers. And so, you know, the first chance I got in the ninth grade to take an accounting class, I took it and loved it. And so, progressed through high school, 11 math, went on to Indiana University in southern Indiana, IU southeast, and, you know, majored in accounting. And kept saying what I just told you is I wanted to be the managing partner in an accounting firm one day, having no clue what a managing partner did, but that’s what I wanted to do in my career. And so, I always migrated towards numbers. I felt like early on in my career that if you did not understand the balance sheet or an income statement intimately, it put you at a competitive disadvantage. You know, you’d go out with friends and you’re young and you’re just hanging out talking to people and, you know, people, I don’t pay attention to the numbers.

That’s not a concern to me. And numbers to me were the, it was the math game. I mean, that’s what business is all about.

It’s about numbers in the bottom line. And so, just early on, I migrated, you know, I migrated that way. I had an opportunity at Macaulay-Nicholas and Company, as you mentioned, to, you know, it was an early lesson in my life. I went through a lot of interviews on campus at the time. It was the big five accounting firms, or big six, and went through all these interviews and was having a little bit of success. And Macaulay-Nicholas and Company happened to be the very last interview that I sketched on the last day. And I was tired of the process. And I said, you know what, I’m just going to go in and I’m going to be myself.

I’m not going to try to impress anybody. I’m just going to talk, tell them what’s important to me, what’s not important. And I got a call back and offered me an internship. And so, you know, there was a lesson wrapped up in there for me. Definitely just be yourself and not try to impress anyone else.

Anthony Codispoti : And so, you were kind of putting on a little bit of a positive front or so you thought, but other folks maybe saw through that. It’s felt a little bit forced.

Craig Dunaway: 21 years old and just trying to get knowledge in the business world and what works and what doesn’t work. And I didn’t know any better at the time. So, you know, went back to the lesson my mom and dad taught me, just be yourself. And as an intern at the firm, I’d had an opportunity to really be exposed to a lot. I mean, it was a smaller firm, regional firm.

We were, I think, the second largest regional firm in Louisville, Kentucky. And so, I was exposed to the tax side and I was exposed to accounting and auditing. And I really migrated towards auditing. Really, for a number of reasons, it was bigger picture than just doing tax returns every day. It allowed me the opportunity to work on the firm’s larger accounts, very successful businessmen and women.

And you got to see what made them successful. So, you know, even going into this at 23, 24 years old, certainly, I’ve got, you know, seniors and managers and supervisors and partners ahead of me, but I’m getting to sit in on these meetings with business owners and see what makes them tick and what’s important to them. And so, it really, really shaped what I wanted to do, you know, from the world of public accounting. I didn’t want to sit behind a desk and do individual tax returns all day. I wanted to work with business owners.

And so, you know, to kind of further your question, you know, when you’re working with business owners like that, they always have some need that see they’re, they’ve had bank financing going on, or they have litigation going on, or they have to put projections together. And so, over time, over my career at Macaulay, over that 14 years, I was there, really, excuse me, 16 years I was there, it allowed me to focus on all of those things where, you know, at a fairly young age in the business world, I’m meeting with bankers, and I’m meeting with attorneys, and I’m helping a client or clients work through, you know, projections because they’re thinking about selling their business. And in the number side of that, just always fascinated me. I was always really, really good at numbers.

Maybe it was my sports background, I just migrated that way. And so, really, really just took off and honed what I’ve done. I feel like my entire career understanding, just, just having that understanding, and I don’t mean that in an arrogant way. I mean, I know everybody’s not good at numbers. But I think if you’re not to try to understand as much of this as you can, it’s extremely important.

Anthony Codispoti : So, at some point, you decide that you want to become a business owner yourself?

Craig Dunaway: Well, the story of that is that, and at the college I went to, I mean, it was a smaller school, and they had a, they had an area dedicated for the student athletes to study. And I played basketball and another buddy of mine played baseball, and he was also an accounting major, and we used to study together.

And you know, you’re 19, 20 years old, you have no money, but you got a lot of dreams. And so, Charlie and I used to, you know, we’d studied together, and we talked about, you know, what, when we graduate from college one day, we should buy a piece of real estate. That’s what we should do.

Let’s buy real estate, and we’ll start, you know, we’ll start a real estate company. And we both graduate. Charlie goes his way, I go mine. And three years later, or a couple of years later, Charlie comes to work at our accounting firm as our controller. And I hadn’t really seen him and stayed in touch with him, but we started this discussion about real estate again, and said, you know, we should consider this.

We talked about it in college. I mean, you know, we’re having a little bit of success in the business world now, maybe we should do it. And I think it was a little bit serendipity for us at the time, we had another friend of ours who was looking to become a Papa Johns franchisee. And at the time, there were only about 20 or 30 Papa Johns. I mean, Papa Johns was very small. I mean, you’re talking 1985 timeframe. And so there were very few Papa Johns in the country.

I mean, in the city of Louisville, there were very few, much less the country. And so Charlie and I worked with this individual, gentlemen by them, Greg, and help him put projections together, you know, something that I had started, you know, honing my skills on. And Charlie said to me one day, he said, you know what, instead of buying real estate, why don’t we meet with Papa Johns and see if we can become Papa Johns franchises? And I’m like, all right, let’s do it.

Anthony Codispoti : So that was sign me up for anything, right? Right.

Craig Dunaway: I mean, that was our first I’m looking for opportunity. Franchising. So we met with Papa Johns, liked what they had to say, they were looking for young, aggressive business professionals to, you know, kind of spearhead the company of franchising.

And Charlie liked what we, what we both liked what they had to say, as I said. And, you know, I grew up in Louisville, the Cincinnati market was available. We wanted a big market. You know, don’t ask me why we just wanted a big market. We wanted to get as big as we could get. And ultimately acquired the rights to do Papa Johnson, Cincinnati, Ohio.

Anthony Codispoti : And are those rights that you guys still hold today?

Craig Dunaway: Are you still involved in that? Boy, there’s a long story there, Anthony. Charlie, Charlie and I began, I’ll say we made good money, but we made money in spite of ourselves. And the one of the things that I’ve learned about the restaurant industry is it’s very much a pennies business.

And, you know, being a CPA, you can imagine how I see the world through, you know, the black and white lens. And, you know, one of the first lessons Charlie and I had as we met with the banker and asked to borrow $100,000 from the bank. And he loaned us, he loaned us the money. The restaurant cost us $94,000 to build and we split $6,000 and we thought we were rich.

And it’s kind of funny to look back on that now. But, you know, we opened our first restaurant, had some success with it. We put a little bit of money in and opened another one. And we just kept parlaying it. I mean, it worked out really well for us. We wanted to continue to grow. And, you know, Papa Johns was becoming unbelievably popular. I mean, I owe part of our success to the fact that this brand just really, Papa Johns was not an overnight success.

But there was about a five year period where they just exploded. And that was good news, bad news for us. It allowed us to have really, really strong sales. But at the same time, we had a first ride on the market. And so other people were coming into Cincinnati wanting to develop restaurants.

And we either needed to develop a restaurant, or we needed to give up the territory. And I did not want to have partners. I had a partner, I didn’t want a bunch of partners where ultimately Charlie and I had maybe 40 locations and we’d shown 3%. That’s not what we wanted to do. We wanted to control our own destiny. And so we just kept building and we would give up the territory. And over the course of about 11 years, he and I opened 12 Papa Johns restaurants in Cincinnati, Ohio. And, you know, it’s not a passive business.

I mean, I said it’s a penny’s business, but it’s also not passive. And he and I were in Cincinnati every week and visiting our restaurants and meeting with our operating partner, and really just trying to make the restaurants the best that they could be. And Charlie ultimately, he got out of the business of public accounting and I stayed in. I mean, I stayed full time. So I really wore two hats at the time. I had two full time jobs.

Anthony Codispoti : I mean, that’s you had to have been stretched then.

Craig Dunaway: I was stretched then I was stretched and I went my golf games not very good because in my formative years of golf, I was stretched very thin. But I loved it. You know, I loved I loved the culture that we were trying to create with Papa Johns. I loved what we had formed.

And I loved us opening restaurants because you could instantly see the success over the opportunities when you did that. So but I stayed true to my core because I tell people public accounting is what gave me white hair, not the restaurant industry. I love public accounting. I just love working with clients and you know, you’re helping people make money and help them maximize the profitability in their business. And that was a lot of fun. A lot of stress, but a lot of fun.

Anthony Codispoti : And so do you still have those 12 locations Papa John’s now?

Craig Dunaway: So what happened was the segue of really from Papa John’s into Penn Station is in 1997, you know, Charlie and I had been traveling back and forth for 12 years.

Now, I’ve got a, you know, I’ve got a family at home, a couple small children. And really three things that happened in 1997. Charlie told me that he was tired of traveling back and forth to Cincinnati all the time. And I guess I wasn’t smart enough at the time to just say, Well, why don’t you move?

But that happened. And then a gentleman, the second we were the largest franchisee of Papa John’s in Cincinnati at the time. And the second largest franchisee approached us and said, I’d be interested in buying your restaurants. And we told him, we said, Mike, we’re not interested. And he said, Well, let me make you an offer. And he made us an offer.

And we became interested. And then the third thing that happened that was really fortuitous for us is we stumbled upon Penn Station. And based out of Cincinnati, Ohio, Milford’s where our corporate offices, as you said, but we, we aided a Penn Station and love the food and thought, man, this is this product is special. So between Charlie being tired of traveling, we having an offer on the table to potentially sell our Papa John’s and loving the food, we decided to meet with Jeff Osterfeld, the founder of Penn Station.

And we met with Jeff in 90s, it was 96 timeframe. Love what he had to say. I loved his focus on the quality of the product, customer service, and just his detail, Ori, and then it’s because again, with my background of public accounting, the way I see the world, you know, it’s through that black and white prism. And so we decided to sell our Papa John’s and begin opening Penn Stations in Louisville, Kentucky.

Anthony Codispoti : Interesting. And so was there something from a financial perspective? I mean, you’ve had nothing but good things to say about the Papa John’s brand. You didn’t leave from what I can tell because there were any issues or, you know, cracks in the foundation. But, you know, there were other things going on the opportunity to, to, to transition out of Papa John’s and into Penn Station, Penn Station was newer in its sort of growth trajectory, where there are things from a financial perspective that you saw in the models there that you were like, oh, this is even better than what we’ve been doing before.

Craig Dunaway: You know, that’s, that’s a really, really good question. I think what was different, the Papa John’s model on an individual restaurant level and a Penn Station restaurant at the time were very similar in nature. And I wanted something a little bit closer to home. You know, I was, I lived in Cincinnati and restaurants are definitely not a passive business. I think people think because they have a good recipe or they can fix barbecue a certain way that maybe I should open a restaurant.

But I don’t think what can be lost is how much this is a Penny’s business. And you just have to micromanage every call. I tell prospective franchisees that it’s really the land of lost opportunity. And I was good at that. And, you know, Charlie and I love the food.

There were no Penn Stations in Louisville. And we felt like bringing that product would create more opportunity because, you know, as I said, Papa John’s really took off. I mean, in the 90s, I mean, Papa John’s was starting to explode.

And it’s an unbelievable brand. And I love being a franchisee, but it was changing. I mean, they were going, they had gone public, you know, and, you know, amongst the inner circles of franchises, it was Papa John’s, unfortunately, now has to answer to Wall Street. And so we were concerned about that. We weren’t, I mean, we trusted the leadership there and we liked the product and the brand and all. But, you know, when you have to answer to somebody else, I Wall Street, the decisions are made more short term in nature and we wanted a more long term vision. And so we started opening Penn Stations.

We opened our first one in 1999 in Louisville and over the course of, over the course of 18 months, open for. And, you know, really just love that too. And it was different. I mean, Papa John’s at the time, I don’t remember how many locations Papa John’s had when we got out. But, you know, when I came into Penn Station as the franchisee, I think we were restaurant number 37.

Anthony Codispoti : Oh, so you guys got in real early there too.

Craig Dunaway: We did. But I’ll tell you, Anthony, I saw similarities between Papa John’s and Penn Station. And, you know, John Schnatter, the founder of Papa John’s, I remember John saying that we want to be at 2000 units by the year 2000. And this is 1987 and you’re looking around a room and there’s 50 people in the room.

Like, what’s he saying? But John had a vision. You know, Jeff’s vision at Penn Station was different. It was he wanted every franchisee who opened up to be profitable. And that really resonated with me one on one. It wasn’t about the brand as much as it was about taking care of franchisees. And I liked what I heard from Jeff when I came into the system.

And, you know, he asked me, he asked me around 1997, right after we had gotten in, he called me and said, I’d like for you to run for the franchisee advisory council. I think, you know, we have it’s a group made up of different people from different geographical areas. And everybody looks at this through an operational prism.

And you’re looking at it from a financial prism return on investment. And so I ran, you know, and, you know, was able to serve on our franchisee advisory council. And I think what I didn’t know at the time was, I think Jeff was really interviewing me. Charlie and I, you know, when you get in business and you’re 23 and 24 years old, you’re just starting to form your business ideas, right? And then, after, you know, 10 or 11 years, Charlie and I had both strong opinions and opinions didn’t necessarily align with each other anymore. And so ultimately what I decided, and we had some contentious meetings early on with Penn Station, because we weren’t doing some things that the brand thought we should be doing. And, you know, my partner is fighting corporate, yet corporate’s the founder of the brand. And I’m like, we should be listening to them. They created the model, they know this model.

Anthony Codispoti : So you were more on board with following what corporate was asking, but your partner kind of had other ideas.

Craig Dunaway: Yeah, Charlie had other ideas. And it wasn’t because he was a bad guy, he just had strong opinions too. And ultimately I bought Charlie out. And, you know, I bought him out and I think early 99. Jeff asked me, has that gotten to know Jeff as I’d served on the franchise, the advisory council and periodically he would call me asking my opinions about things. And I never thought it was odd, he would just ask my opinion on something, I’d give him my opinion. And there was an annual meeting that I came to and after the annual meeting he asked me if he could meet, if we could meet. And he asked me if I would move to Cincinnati to become president of Penn Station.

And Jeff’s a very entrepreneurial guy, great guy, and was building a golf course, knew he needed someone to run the business day to day, knew he was going to have to step aside. And I’ll be honest with you, Anthony, I was flattered but not interested. You know, I wasn’t sure I could do it. But I love public accounting. I mean, it is, I really liked helping people make money and working closely with them. But, you know, I was, you know, I guess when Jeff offered me that I was 34 years old.

And I remember thinking something I said to you 10 minutes ago, which is, I don’t want to be 60 years old and have gray hair and stay in public accounting because it’s really, really hard. And so I asked Jeff, I said, I want to talk to your team. I want to talk to the team about it. And so I drove to Cincinnati and met with everybody and said, I think this brand is really special. I see a lot of similarities between Papa Johns and Penn Station, but I’ve got a good job. I’ve got a good career.

I love what I do. But I think we can go places and I want Charles in. So it’s not like they interviewed me, but I wanted to know that the team was behind me and would support me and everybody was. So it worked out. It worked out great. So I’ve been here since August of 99, August of 99.

Anthony Codispoti : So I want to take a step back because you said something interesting about how the goal sort of the vision for Penn Station early on wasn’t to get to 2000 stores like it was for Papa Johns, but it was once every franchisee to be profitable. I’m kind of curious how that showed up in sort of the franchise or to franchisee support?

Craig Dunaway: Well, I mean, that’s a really good question. I mean, if if franchise, you know, a brand’s going to grow. And we’ve got, you know, for context, I mean, we’ve got 323 locations.

Actually, we have one opening today in North Carolina with a great franchisee of ours. But I mean, if we only have one company owned unit out of all of those. And so the way Penn Station, Inc. makes its money is off of a royalty and that royalty is based upon sales. And so if you just really think about this from a common sense standpoint, if franchisees are making good money, they’re going to want to continue to grow and expand. They’re going to want to open more units.

And if they’re not, they’re not going to grow. And I know that seems kind of logical and simple in nature. But what it does is for us in particular, with only one company owned unit is you have to create a model that’s you can duplicate, but it gives franchisees the tools to maximize that return on investment. And we’re not, you know, when I think about, if I could compare and contrast that to what Papa Johns did early on, I mean, what John envisioned that he saw was he wanted to be national pretty quickly. I mean, you get to 2000 units by the year 2000, and that’s only 15 years away at the time, you’re jumping all over the country. And so every time you go into someplace new in the country, no one knows who you are. Logistics is tough because you have to get the food there. And from a corporate standpoint, you need oversight. And so the biggest difference is John saw this scale of wanting to get big quickly.

And Jeff just wanted to grow concentrically outside of Cincinnati over time. There’s no right or wrong to that. It’s just, you know, it’s just a difference in philosophy. And that philosophy resonated with me. I mean, you know, coming from a background where you’re trying to help people make more money in hearing pop, hearing Jeff say, I want each restaurant to be successful and profitable. And if it is, franchisees will open more. That just resonated. It just hit me between the eyes because it’s so much what my core was.

Anthony Codispoti : Do you still have ownership of any of the franchise locations or did you give those up as you kind of migrated into the president?

Craig Dunaway: Well, I sold actually over the course of between 1999 and 2013. I had opened 15 Penn stations in Louisville. And then I’d opened four in the Raleigh, North Carolina area. And, you know, when I took a look at the brand of where we were at the time, I don’t remember how many units we had, but but I’ve always felt like Penn Station can be a national concept. I mean, our food, our food is not regional in nature.

I think it’ll sell anywhere. And, you know, when I looked at where I was in my career and the time that I was spending being committed to both running the company as the president and being a franchisee, I felt like my time personally would be served better devoting all my full time efforts to Penn Station. And again, I happened to be approached by someone who was a Penn Station franchisee.

He’s from Louisville and he asked if I’d be interested in selling my restaurants. And so I did. And so on January 1st of 2014, I sold my restaurants to this individual and, you know, it didn’t look back.

I mean, I love the experience and love what I did. And when franchisees would talk to me about you don’t understand my problems, when you’ve got 19 locations, you understand their problems. And so I think it gave me street credibility with, you know, with our franchisees.

Anthony Codispoti : I want to talk a little bit more about the franchise opportunity itself, but let’s go back to actually do something we probably should have done a little bit earlier. I want to talk more about the customer dining experience. I mean, you talked about your first experience sitting there and you’re like, wow, this food is really good. But for somebody who’s never been to a Penn Station, kind of paint a picture. What’s the food like? What’s the dining experience? What’s the whole customer experience like?

Craig Dunaway: Yeah, so our core product, you know, we’re hot grilled subs is our main product. I mean, we’re 93% hot and 7% cold subs. But when Jeff started, he only started with four sandwiches. And, you know, as we expanded, when I became a franchisee, we were the second location that worked on what we called the Expanded Menu where we went from four to 14 sandwiches. And Jeff felt like that in order to, you know, really expand this and make this more from a local concept to regional than national, we needed a broader, we needed a broader menu.

And so that’s when he expanded it. So, you know, I don’t think when Jeff started this in 1985, he really began at Jeffries Deli in 1983, and he was in a mall. And he was in the Dayton mall in Dayton, Ohio. And one of our competitors happened to open up in the food court by Jeff, and they were selling cheese steaks and just had a huge line. And Jeff’s selling bagels.

I mean, Jeffries Deli and bagel. And so, you know, that intriguing. And so he started going to Philadelphia and going to the Jersey Shore to figure out what’s this all about this cheese steak and you know, the fresh cut fries and, you know, the Atlantic City. And spent a lot of time doing it. And he thought, you know what, I think I know what tastes good.

I’m going to give this a try. And so he created a Penn Station. The first one he opened was in downtown Cincinnati. And I’m telling that preface to your question, because I really think he was ahead of his time with respect to fast casual. And really fast casual, the definition I mean from fast food is it’s better food, but it’s fast.

You know, it’s getting it quick. And so when you first walk into a Penn Station, you place your order, you know, it’s display cooking, something which was really unheard of at the time. And you know, fresh cut fries that are always dropped to order, you know, made from an Idaho potato. And it used to be you would walk down the line and your food would literally be made in front of you. And it takes about five and a half minutes to get the food from the time you order it. So I mean, long since you still place your order, you go sit down and then we run it out to you, you know, we’re going to run it out to your table, we’re not going to call a name or a number and have you come pick it up. But the biggest seller for us is the cheese steak.

I mean, system wide, it’s about 25% of our sales. But that I think that really that expanded menu has allowed people to, you know, really migrate towards us and have it’s a very craveable product. I mean, survey after survey is said, your food is unbelievably craveable. So it’s it’s been a good ride, definitely with with respect

Anthony Codispoti : to there are other sandwich shops, other, you know, sub shops, other, you know, sandwich places, trying to do similar kinds of things. What I think this But

Craig Dunaway: I mean, certainly having hot food is different. I think people view us more as a meal. I mean, if you take a look, Anthony, if you take a look at the sandwich category just across the country, most restaurants that sell primarily sandwiches about 70 to 90% of their sales come through the door at lunch, and they’re not that busy in the afternoon and at evening. And because we have a hot and cold mix, we’re about 60-40 lunch versus dinner.

Wow. And I think what that does is it allows people to view us as a meal and not a sandwich. And I think it creates an attraction for more families to come in as well. You go in at night, or you go in on the weekend, you see a lot of families in our restaurants.

Anthony Codispoti : You guys do catering? Is this a part of your business?

Craig Dunaway: Yeah, catering. I think that’s a great opportunity. In fact, we just hired a senior VP of marketing who’s, she’s been in the rest of the sandwich space for about 16 years, only been with Penn Station for about 120 days now, but she’s been awesome. And she talks about catering and the opportunities that we have with catering. So we’re excited about that going into 25 and 26.

Anthony Codispoti : So already something that there’s the foundation in place. You guys are already offering the service. Maybe just not a whole lot of people are aware of it. And so you’re extra excited about this new role being filled because there’s going to be an increased emphasis put on it.

Craig Dunaway: Yeah, I mean, I think when you’ve grown up as a brand, then we’re celebrating our 40th anniversary this year. And so when you’re primary sales driver for the last, call it 35, 36, 37 years has been hot food, it definitely takes time for customers to understand that you also offer code, cold. So we’ve started shifting some of our marketing efforts for that.

I mean, we’ve got phenomenal bread. It’s a proprietary product. And you know, when we put our hot product up or our cold product up against our competition, everybody’s like, this is phenomenal. And so I think ultimately what wins is the taste of the product. We use quality ingredients.

I mean, the steak is a USDA choice steak. It’s not the cheapest product for us to buy, but we know it creates a great taste profile. So that’s really, you know, you asked what the customers experience on the customer service and experience side. It’s that, but on the taste profile is we seek out national name brand suppliers for us. And we want the husband and wife or whomever to walk in when they look in the deli case or they look on the shelf. We want them to know that it’s a name brand product and, you know, something that they can get in their grocery store that they see in the grocery.

Anthony Codispoti : You touched on something earlier. I want to go back to sort of the, you know, the challenges and people outside the restaurant space probably aren’t aware of this. But as you’re expanding into new markets, like the supply chain of the food and the ingredients becomes something real critical to figure out, you know, it’s not like you’re going to the grocery store to, you know, the local grocery store to buy your stuff. It’s like you guys have a certain way that you’ve, you know, that you want a certain beef, you know, it’s been seasoned a certain way, like it meets your criteria. So as you guys have been expanding and over 300 locations now, how do you kind of think about that logistical challenge of making sure that your distribution of the raw ingredients can sort of keep up with the geographies that you’re moving into?

Craig Dunaway: You sound like someone who knows a little bit about the space because that’s a really good question. You know, the way we do that, the way you really have to do that is I mentioned logistics earlier. And ultimately, keep in mind the logistics component with what I’ve said to you a couple of times is maximizing return on investment. In the further away you get from Cincinnati, I mean, our distributor is US food service. And if we open one location in Denver, Colorado tomorrow, I can assure you they don’t want to have a truck delivering to one restaurant. And so the way we manage that is we’re very, we negotiate all of the contracts. That’s actually one of my jobs at Penn Station is I negotiate all of the contracts with with the vendors. And what we try to do in that is we’re very set in those products.

You mentioned the proprietary products we have, you know, our steak has to be seasoned a certain way, our breads proprietary. And the way we control this is growing outside of Cincinnati concentrically. And, you know, I don’t want to go.

I mean, eventually do I want to be in Washington State or Denver, Colorado or Arizona? Sure. But you need to do it profitably and successfully.

And you need to do what got you there. Well, what got us there is the proprietary items that are on our menu. And I know that these distributors do not want to deliver to one or two restaurants that are located 1500 miles from Cincinnati when that’s the only restaurant.

So we want to continue to grow concentrically because when we do logistics means the food gets there. And if we open a restaurant 20 miles from Cincinnati, Ohio, I know I’ve got enough brand recognition that it’s going to open up really, really well. So the further we get, I think I’m not going to say the sales won’t be as strong, but certainly the risk of sales not being as strong is greater than if you open 20 miles away.

Anthony Codispoti : So talk more about the franchise opportunities that looks today. Geographies, what’s what’s the advantage of being a franchisee for Penn Station?

Craig Dunaway: Well, I mean, franchising, I think it’s it’s really a proven model, right? Regardless of the industry, I mean, if it’s restaurants or painting or HVAC or whatever, you’re looking at a proven model.

And and I think that’s to me, first and foremost, is you want to get involved in something that’s been proven. And and I was on I was on a panel a few years ago when a gentleman walked up to me. I don’t remember what the panel was about, but he walked up to me afterwards. He said, you know, I really appreciate, you know, what you said. He said, I’ve got a question for you.

How do I get to 10 units? And I said, well, how many do you have today? And he said two. And I said, are they profitable? And he looked down into shoes and he said, no. And I said, well, you got to make a profit.

I mean, you got to you’ve got to be able to demonstrate you can scale. I would do whatever I can to make sure those two restaurants are profitable. And once you get them there, I’d open a third one and eventually you’ll get to 10.

But you can’t get to 10 if the first two aren’t making you any money. And so for us, the way we do this in this concentric circle is we’re really targeting 350 miles less or within 350 miles of Cincinnati, Ohio. You know, we tell people who call from outside, we really appreciate it. But we’re just not interested in going, you know, outside of that circle today. Because again, of the logistics, the oversight and the brand recognition. And so we’re really in 14 states today. And we’re working very closely when I take a look at where does Penn Station want to grow? I mean, certainly we want to be national.

I mean, who wouldn’t want to be national? But there’s really seven markets that we have a presence that have a lot of opportunities for growth. I mean, Detroit, Pittsburgh, Charlotte, Raleigh. You know, those are just some of the markets where we have a present that if we just fill out those seven markets, we can more than double in size.

And so why go to Seattle, Washington, 3000 miles away when I’ve got 11 locations in Charlotte and Charlotte can handle 38 locations? It’s it’s it’s very much in Jeff. This was Jeff’s vision from the start. And I bought into that vision, which is just it’s a long term play. Do you want to make money in the short term as a franchise or would you rather make money in the long run as a benefit because your franchisees are making money?

And that just totally has always resonated with me. So we don’t want to do these one offs all over the country. We want to stick to our core and that core is closer to Cincinnati than further away from Cincinnati. But, you know, the second part of your question really dealt with systems and procedures. And, you know, when I was looking at getting involved in in Papa John’s or looking at getting involved in Penn Station, I wanted to know, you know, what did my royalty check I cut every month pay for?

Right? Because after you get open, you’re going to what the brand do for me lately? And excuse me, I always try to make sure that I and our team are always cognizant of that, that we know that franchisees understand why they’re paying us monthly. What benefits am I getting? And when I looked at Papa John’s and Penn Station early on, I wanted to know the systems, you know, what systems are in place. And the good of the good is Papa John’s had a system for everything and Penn Station has a system for everything. So so as a franchisee, you didn’t need to reinvent the wheel. What you did was as the franchisee, because it’s your model.

And I think for people who don’t understand franchising, I think this is an important point is you’re really leasing a system for 20 years. And you have to you have to enhance that system. The brand is giving you the playbook, but it’s up for you. It’s up to you to execute the plays and the franchisees who perform the best are the ones who enhance our systems.

Anthony Codispoti : This would be a good tie in because I was thinking to the example you just mentioned about gentlemen that you met who had two stores, he’s like, how do I get to 10? Are your stores profitable?

No, not yet. Like what what is it that that guy was missing? What what levers did he need to pull to get from where he was to where he wanted to be and having those those two stores be profitable?

Craig Dunaway: You know, I think he was I think he was too focused on getting big and he wasn’t focused enough on ensuring that the systems and the tools that you put in place create a system to be profitable. And, you know, for example, I mean, every one of our, you know, every one of our sandwiches, we, you know, has six inch sandwich has a certain weight of protein that needs to be put on it.

Well, at the time, I don’t think this and I think he was going more from gut. But you have to tell people I want three ounces of meat on this sandwich. If you put four ounces of meat on the sandwich, I mean, I think to the uninformed person, they say, what’s only one ounce of meat? What’s the big difference?

But I can assure you the CPA is saying, hold on, that’s 33% more protein that you just put on that sandwich. And I think it’s giving them the tools and then teach them why those tools are important. I just I don’t think that he was focused enough on creating a system that anybody could duplicate. And and, you know, I learned that becoming a multi unit franchisee and being passive, having another job, you know, I had to work with my partner for us to have a system for everything because I was only in Cincinnati on the weekends visiting my restaurants. That meant five and six days a week.

I was never around. So if you’re not giving people systems and tools to follow and you don’t have an ability to follow up on that, you’ve got an opportunity to lose money. And so I just think, you know, an answer to your question, I just I don’t think at the time he was so focused on creating a duplicate, a model that can be duplicated. You just want to get restaurants open.

Anthony Codispoti : He was focused too far down the road. He wasn’t paying attention to the short term details that he really needed to fine tune.

Craig Dunaway: Yeah, I mean, nobody wants to hear how do you run a marathon? Well, you start running a marathon by going out running a mile.

Anthony Codispoti : So Craig, when I shift gears on you, and I’d like to hear about a serious challenge that you’ve overcome in your life. What was it? How’d you get through it? And what did you learn coming through the other side?

Craig Dunaway: You know, I when I was I’ve been very fortunate in my life and I’ve not had anything. I had one incident that happened to me about three years ago that was pretty rough.

I fractured my pelvis cycling. But when I was in college, I happened to play. I mentioned IU Southeast and I happened to play basketball there. And I was a three year starter and about halfway through my senior year, I tore ligaments in my ankle. And I was never a quitter. But, you know, when you’re sitting on the bench and you’ve got a boot on your foot and you’re going to class on crutches and it’s snowing on the ground and you’re trying to maneuver.

And you’re seeing your friends play and you’re not. It was tough. It was tough. And it it it causes you to challenge what you’re doing. You know, should I be doing something else? There’s only a couple of months left.

It’s my senior year. And and I decided, you know, I’m not a quitter and I decided I was going to gut it out. And I think for many people, it’s not much to say for some.

It’s easy to just quit and move on to the next stage or next page, you know, in their life. And I wasn’t prepared to do that. And it it was very humbling. And it told me it taught me a lot about leadership. I was a captain. It taught me about teamwork.

And even though you’re not there to play, you can still contribute another way. And so it really, I think, set the stage for me going forward and what I wanted to do in my business career. I wanted to be a leader. I didn’t want to be a follower and I didn’t want to be known as a quitter. And even though I look back on that and I think, well, I don’t know, just gee, you got a chance to play basketball and you had a slight injury.

What’s the big deal? But at the time, it was it really meant a lot to me. And I think it was something little like that that told me, don’t quit. Never give up. You know, don’t don’t give up in anything. Keep pushing through, keep persevering.

And you only have to get up one more time than you get knocked down. And that’s what I decided to do. And that really is one of the things early on before I even started my career that really set the stage for how I’ve approached my entire business career.

Anthony Codispoti : You know, and I’ve had the opportunity to talk with other folks in similar situations where, you know, they were a pretty good high school or college athlete. That’s a big part of their identity.

And then something happens that takes that away. Maybe it’s an injury. Maybe they just discovered that they weren’t as good as they thought they were.

And, you know, they didn’t have sort of the career possibilities with it. And now all of a sudden that’s taken away from you. And this is a core piece of your identity.

And it’s like, it’s very destabilizing. Like, you know, for you, hey, I’m a basketball player, I’m a captain. That’s part of who I am. That’s how I sort of contribute to this, you know, my corner of the world. And now that’s gone. And it’s like, oh, who am I now?

Craig Dunaway: That’s very, very true. I think we’ve all got identities, but you can’t be so married to that identity that you can’t become something else, right? And I still, I joke around with my buddies. I also play baseball and I’m a golf, but golf fights me.

And I tell my buddies when I’m golfing with them, I say, I swear I used to be athletic. I really was. But you’re right. You can’t just, you can’t focus on that. You can’t be so my optic in your view that, you know, you lose sight of the bigger picture.

Anthony Codispoti : Where do you think your resiliency comes from? Like, is it genetic? Like, were your parents like that? Was it sort of like, you know, kind of like ingrained in you growing up? Something you just sort of discovered in yourself when you hit that, that wall for the first time. Wow.

Craig Dunaway: I think it was my upbringing. I grew up in a, I thought I was middle class, but then I look back and maybe I will was in middle class and I grew up in a little bit of a tougher neighborhood.

I mean, not horribly tough, just, you know, just, just a little tough. And I had the luxury of playing sports always against older kids, you know, two, three, four years older than I was. And you, you were either going to play and compete and stand up for yourself or you were going to go home crying to your mama.

And I wasn’t going to go home crying to my mom. And so I think that just taught me perseverance and just that stick to it approach. And my dad, I mean, my dad was, you know, he was an accountant. He worked for Ellen in railroad for, I don’t know how many years, but he put me through college because early on he had two jobs. And, you know, you don’t forget things like that. And so I think it’s just, I think it’s my upbringing that taught me never quit. You can do this. You know, as I said earlier, you just need to get up one more time.

I think too many people get knocked down and beaten down and they quit. And I just, I didn’t want to be that way. I didn’t want to see myself that way. You know, it makes it tough because I said such a high standard for myself that, you know, you as a leader, you have to be careful that you don’t hold people to unrealistic expectations just because you hold yourself to those same things.

I had to learn that early on. I mean, you early on in my career, you cannot inconvenience me. If you wanted to meet at seven a.m. on a Saturday morning, let’s do it. And, you know, I’ve changed somewhat over the years because I don’t want to inconvenience you.

And so it’s, hey, Anthony, when’s a good time for you to me? But all of that’s come from just this stick to it, never quit, never get a bad attitude that I’m sure my parents instilled in me. I was, I was fortunate enough to receive an award from my college about five years ago. And it was from the athletic department. And one of the things my parents were there. And one of the things I said in my speeches, I said, for everything good you see in Craig Dunnaway, you can thank my parents for everything bad you see. You can blame my friends.

Anthony Codispoti : How, let me ask you this, Craig, do you feel like you’ve done a good job as a parent instilling those values in your kids? And what, what lessons could you pass along in terms of how to accomplish that?

Craig Dunaway: Oh, no, no, you’re gonna make me cry. I think, you know, as my children have become adults, yes, I was too hard on them growing up. You know, it’s, I was, but they’re great kids, great adults. I don’t want them to be like I was totally. But you know what, they work hard.

My son has a daughter and I see how loving he is to her. And so, you know, what I would say, let people have fun and enjoy themselves a little bit. You don’t have to win at everything all the time. Take time to celebrate, you know, the moment. And so, you know, that’s what I look back on and say.

Anthony Codispoti : It’s interesting you say I’ve got two young boys, they’re eight and 10. And so, like I’m constantly asking myself and questioning the parenting that I’m giving them, is it, am I being too hard on them? Am I sort of, you know, letting them sort of get away with too much?

And it’s tough, right? Because it’s all coming from a place of love, as I’m sure, you know, your parenting has always come from a place of love. But it’s, you know, like you see like an eight year old kid and you’re like, wow, I don’t want him to be like that when he’s 28.

And of course, he’s not going to be. There’s going to be all kinds of maturation and development that takes place. But, you know, and at the same time, you know, I think guys like you and I, we can look back and realize that, you know, a big part of our resiliency comes from the fact that we had hard stuff that we overcame early on. And as a parent, there’s sort of this, like this weird mix of like, you want to protect your kids from, you know, hardship and suffering. But you also understand that it’s sort of the, you know, the way to develop calluses and, you know, to get tougher and, you know, be able to withstand things going forward.

Craig Dunaway: Yeah, I think it’s okay to strive for perfection. But I’m not sure that it’s okay to not celebrate it once you get there and it wasn’t perfection. And I think there’s a difference between the, you know, there’s a difference between the two. It’s this push-pull that you were talking about with your kids. You want them to do their best. You want them to strive.

You don’t want them to quit. And so you’re trying to, you’re trying to push in both directions. And what I wish I would have done is I wish I would have pulled back more and said, all right, you did a nice job. You didn’t win, but you did your best.

Anthony Codispoti : Yeah, that’s a good lesson. I, my son came to me the other day and I said, oh, you know, how’d you do on your test? He’s like, oh, I got a 90%. I’m like, oh, how do you feel about that?

He’s like, great. And I’m like, you know, which ones did you get wrong? And like I, I immediately went away from celebrating the 90%. And I, you know, wanted him to learn from the 10% that, that he got wrong. And I kind of had to catch myself. And it’s like, just like you were saying, Craig, like, take a moment to celebrate, you know what they got, right? And, and then, you know, hey, at some point, let’s revisit what you got wrong because it’s a learning opportunity, right? Right, right. Yeah. I’d be curious to hear about the community oriented initiatives that you guys are involved with. I know down syndrome support, student athlete programs, these are things that are important to you guys. Can you say more about this?

Craig Dunaway: Yeah. So I’ll talk about the athlete of the year first. That was actually started by a franchisee of ours many years ago in Dayton, Ohio. And, you know, what he did over the course of the high school season was each month, the student athlete was nominated by the community, you know, which really embodies some of the things we were just talking about. You know, it’s being a student athlete. It’s giving back to the community as a 17 year old and, you know, contributing to your team and contributing to the high school. And so, so what he did was he started this and there, I believe, eight nominees over the course of the school year. And then at the end of the year, there’s a, you know, there’s an athlete of the year they’re given a scholarship.

And so it’s, it’s really been good. I mean, it’s localized for us and then it’s in Dayton, Ohio, but it’s interesting now. This has been around about 30 years and now you’re seeing people who are almost 50 years old coming in, talking about how they were student of, you know, athlete of the month one time. And so it was really a way to give back to the community because, and he was smart, the franchisee who did this was smart. I mean, he knew, you know, the best way to grow your sales is to get involved in the community and to get involved with the kids.

And that’s what he wanted to do. And the other thing that he did, I think was so special as part of that is all these sponsorships of little league teams, boys and girls and, you know, football and basketball and softball and all of these things just to create this culture of community involvement. And then, you know, the other one you mentioned down syndrome, which we’re very passionate about at Penn Station, Jeff, Jeff has, and they’re my friends now, they have several children with, with downs and Jeff and I were talking about 10 years ago that the brand is of the size we, we, we need to give back. It’s our, you know, it’s our obligation to give back. And we talked about what do we want to do? You know, we talked about veterans and we talked about children. And, and Jeff had been sponsoring the downs on his own for years. And he said, what about downs? I’m like, oh my God, that’s a great idea.

And so, you know, there’s what, what people who aren’t involved in downs may not know is that, you know, there’s a, there’s an adoption agency, you know, for people to adopt a, a child with Down syndrome. And that just resonated with us. And you meet with these people and they’re the nice, sweetest salt of the earth people, just so selfless giving back every day. I mean, it’s just amazing. It’s like these people have a much higher place in heaven than I will ever have.

I mean, it’s so impressive. And we wanted to do something. And, and, you know, Anthony, what we, what we did was, you know, we do, we’ve, we’re changing it a little bit this year. I mean, we were doing a roundup campaign, but we’re also matching those roundup funds.

What we didn’t want to do is just use Penn Station and our restaurants to collect money, pass it on to someone else and take credit. We wanted to match it. And so we look around. So, so we’ve done that for about the last five or six years. You know, we’ve given Jeff gave money forever. I mean, we’ve raised a couple of million dollars for the adoption network and it’s awesome. I mean, we did a presentation. We’re, you know, based in Cincinnati, we work with the Cincinnati Reds.

And we did a check presentation where, you know, some of the kids were on the field and the executive director and it was, I mean, it’s a tearjerker. It’s really cool. Everybody’s so happy to see what you’re doing. And so, you know, you feel like you’ve had some success as a brand and we want to get back. I mean, you know, we’re selling return on investment, but it’s about community involvement and giving back. And that’s really super important, you know, important to us. So we love it. It’s, it’s great. And, you know, I see people all the time who thank us for it. You know, you’re doing the right thing when people walk up to you and, you know, kind of tell you unsolicited that, Hey, that’s awesome.

Anthony Codispoti : That’s great. Yeah. Not only return on financial investment, but I don’t know what, what do you think? Like return on sort of the human experience, human capital. Right. Yeah. For sure. I like that.

I don’t know. Kind of thinking about the human experience. Like what is your approach?

What have you kind of learned when it comes to recruiting and retention of team members, whether it’s sort of at a corporate, you know, level environment like you have now or like at the store level, recruit for culture.

Craig Dunaway: I think that I learned that early on. I mentioned to you, I bought out my partner, Charlie. And, you know, Charlie was the one who was full time in the business and I was doing my thing and I had to go in and talk to everybody about culture. And, you know, and I felt like that I was very much, it was about my team members first. And we talked about, you know, how we wanted customers to be treated and how we wanted fellow team members to be treated. And we do that here. We hire for culture now.

I think if you’re interviewing somebody in a marketing position, you know, you have to check out the resume and check all the boxes of their experience to make sure they’re qualified. But beyond that is how well do they fit into this team? Because I’ve got a team.

We’ve got a team at Penn Station that some people have been here now 30 plus years. And what you don’t want to do is bring in somebody who could be a potential cancer to that culture. I think culture is everything. I mean, I’ve learned that I’ve been on sports teams where we did phenomenally well. And I’ve been on sports teams that we didn’t do as well and played poorly. And most of the time it was a bad culture. And, and, you know, I’ve

Anthony Codispoti : trained not the athletic talent of the players, but just sort of the way that you guys mesh together.

Craig Dunaway: Right, right. I mean, you know, look at that. Pick and eat professional sport. Why is it that some teams are at the top every year and some teams are at the bottom when it’s basically the same players, you know, and so culture is everything. So when I owned restaurants, we always interviewed to see how well will they fit into this organization.

And we do that at Penn Station corporately as well. And so that’s the one thing that I think, and we’ve not talked about COVID today. I don’t want to talk about COVID, but that’s the one thing that I think allowed people to get away from was the importance of culture. Because we went from face to face to day to day interactions to either Zoom meetings or no meetings.

And, you know, you have to be able to look your team members in the eye and they understand what’s important to you and you understand what’s important to them if you’re going to maximize what you’re trying to get out of your team or your business or your family.

Anthony Codispoti : As we record this in late April of 2025, do you feel like things have gone back to the way they were? Do you feel like there’s more of that ability to build that culture? Because we can be in person now?

Craig Dunaway: Great question. I think that the brands or the organizations that are doing that are performing well still. And I think that if you’re not willing to do that and make the time to do it, are you going to fail?

No, I just don’t think you’re ever going to have as much success as if you are trying to enhance and build that great culture on a day-to-day basis. I think it’s changed a little bit. I mean, the environment’s changed where people are starting to come back to work.

But, I mean, you’ve got some people in the workforce now who’ve never worked in an office. And so, you know, you need to understand what that dynamic looks like for everybody to be rowing in the same direction.

Anthony Codispoti : Craig, let’s say you and I reconnect a year from now and you’re celebrating something. What would you hope that is?

Craig Dunaway: You know what, a great question. You know, from a business perspective, I want to see, you know, the brand. We’ve also, I mentioned, we hired a senior VP of marketing, also hired a senior VP of development. And I want to see success come to the brand because I know, I don’t mean this self-serving. I mean, this for, we’ve got a great team. We got a great group of franchisees. And I want to see the brand get the success that I think the people deserve for working so hard.

So, you know, if you said what would that look like, it would be more restaurant openings. The franchisees are doing well. They love what they’re doing.

They like being a part of the brand and part of the culture. And me say, you know what, there haven’t been any issues this year. Everything’s been going really, really well.

Anthony Codispoti : Just one more question for you, Craig. But before I ask it, I want to do two things. First, I’m going to invite all the listeners to go ahead and hit the follow button on your favorite podcast app. That way you can continue to get more great conversations like we’ve had here today with Craig Dunn away from Penn Station.

Craig, I also want to let people know the best way either to get in touch with you directly or to follow your story or that of the brand. What would that be?

Craig Dunaway: Well, they got appreciate that. I mean, they can look at pennedashstation.com, you know, on our website. And we have information there just about the brand if they’re in this, you know, concentric circle of where we have restaurants and learn more about our menu, or they can go there and visit for franchising information. And I honestly, I mean, I’ve done other podcasts and I have no problem giving my email if anybody wants to reach out to me.

It’s cnd is in Craig Nancy David at pennedashstation.com. And I don’t have all the answers, but I’ve certainly have the ability and the willingness to, you know, chat with somebody about anything.

Anthony Codispoti : That’s great. We’ll make sure we include those links in the show notes for everybody. Last question for you, Craig, as you look to the future, what exciting changes do you see coming to Penn Station caught in the next three years?

Craig Dunaway: Oh, I think that what well I mentioned COVID. Before COVID, Anthony, what happened with restaurants is restaurants told customers how they were going to get served their food. And today, consumers tell you how they want their food to be served. I want it delivered. I want to order it online. I want to order it through the app. I want to dine in.

I want to call in or whatever. And so what I we are rolling out loyalty with a point system literally next week. And I hope in three years that I’m telling you the success that we have from that, because we really want to be where the guest is.

You know, speed of service more than the quality of the product. I think that’s cyclical. And I think that will change.

But I hope I tell you that we’re firing on all these technological cylinders that we’ve been putting in place over the last 24 months to take care of our guests for the next five to 10 years.

Anthony Codispoti : We’ll have to check back in and get an update from you then.

Craig Dunaway: Happy to any time.

Anthony Codispoti : Well, Craig, I want to be the first one to thank you for sharing both your time and your story with us today. I really appreciate it.

Craig Dunaway: I appreciate that very much. Humble and honored to be on your show.

Anthony Codispoti : Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.