Denny's Stock

Denny's Corporation operates franchised full-service restaurant chains. The company owns and operates the Denny's brand (Denny's) and the Keke's Breakfast Cafe brand (Keke's).

The Denny's Brand

Denny's is known as America's Diner, or in the case of the company's international locations, the local diner. Denny's has been serving guests for nearly 70 years and is best known for its all day breakfast fare. The Grand Slam, one of the company's most popular menu items. Denny's offers a wide selection of lunch and dinner items, including entrees, burgers, sandwiches and salads, along with an assortment of appetizers and desserts. The company has four dayparts, breakfast, lunch, dinner and late night, accounting for 27%, 36%, 21% and 16%, respectively, of average daily sales. Weekends have traditionally been the most popular time for guests to visit the company's restaurants. In 2023, 38% of an average week of sales occurred from Friday late night through Sunday lunch. Additionally, off-premises sales, including sales for delivery and through the company's two virtual brands, represented approximately 20% of total sales in 2023.

As of December 27, 2023, the Denny's brand consisted of franchised, licensed and company restaurants around the world, including restaurants in the United States and international restaurant locations. As of December 27, 2023, Denny's restaurants were franchised or licensed.

The Keke's Brand

Keke's is a daytime eatery dedicated to providing a consistently outstanding breakfast experience through fresh food that is made to order, excellent service from a welcoming staff, and a clean and comfortable environment. Keke's produces meals that are handmade using the best ingredients available, including fresh fruits and vegetables, and the highest quality bread and dairy products. In addition to Mornings from Scratch breakfast items, Keke's also serves burgers, paninis, salads, and sandwiches. Approximately 48% of Keke's total weekly sales occur on the weekends, and off-premises sales, including sales for delivery, represented approximately 14% of total sales in 2023.

As of December 27, 2023, the Keke's brand consisted of franchised and company restaurants in Florida, of which representing 86% of total Keke's restaurants, were franchised and eight were company restaurants.

Franchising and Development

Franchising

The company's criteria to become a Denny's franchisee include minimum liquidity and net worth requirements and appropriate operational experience. The company's traditional twenty-year Denny's franchise agreements have an initial fee of up to $30,000 and a royalty payment of up to 4.50% of gross sales. Additionally, the company's franchisees are contributing up to 3.25% of gross sales for marketing and may make additional advertising contributions as part of a local marketing co-operative. Approximately 81% of the company's Denny's franchised restaurants were operating under this traditional agreement as of December 27, 2023. License agreements for nontraditional locations, such as university campuses, may contain higher royalty and lower advertising contribution rates than the traditional franchise agreements. The company's domestic contractual royalty rate averaged approximately 4.36% during 2023.

The company works closely with its franchisees to plan and execute many aspects of the business. The Denny's Franchisee Association (DFA) was created to promote communication among its franchisees and between the company and its franchise community. Members of the DFA's board and Company management primarily work together through Brand Advisory Councils relating to Development, Marketing, Operations and Technology matters, as well as through a Supply Chain Oversight Committee for procurement and distribution matters.

Domestic Development

To accelerate the growth of the Denny's brand in specific under-penetrated markets, the company offers certain incentive programs. These programs provide incentives for franchisees to develop locations in areas where Denny's has opportunities to grow market share. The benefits to franchisees can include reduced franchise fees, upfront cash payments, lower royalties and advertising contributions for a limited time period and credits toward certain development services, such as training fees. As of December 27, 2023, the company had approximately 78 domestic development commitments.

International Development

In addition to the development agreements signed for domestic restaurants, as of December 27, 2023, the company had potential to develop international franchised Denny's restaurants with its current development partners in various locations, including Canada, Central America, Indonesia, Mexico, the Middle East, the Philippines and the United Kingdom.

Franchise Focused Business Model

The company expects the majority of its future restaurant openings and growth of the Denny's brand to come primarily from the development of franchised restaurants.

Keke's Development

The company anticipates the first few Keke's restaurant openings outside of Florida will likely be company operated restaurants to prove the appeal of the brand in new markets. Similar to Denny's, the company expects the majority of its future Keke's restaurant openings and growth of the brand to come primarily from the development of franchised restaurants.

Site Selection

The company's development teams work closely with franchisees and real estate brokers to identify sites that meet specific standards.

Product Development and Marketing

As a leading full-service family dining brand, the company has developed a craveable, indulgent menu that forges brand loyalty, attracts new guests to Denny's and establishes the framework for its primary marketing strategies.

Menu Offerings

As America's Diner, Denny's has created a menu featuring a large selection of craveable items served in a friendly and welcoming atmosphere for all guests. The company offers a variety of options for breakfast, lunch, dinner and late-night, including classic entrees, salads, appetizers, desserts and beverages. Most Denny's restaurants also offer kid's menus and senior specials. Continuous product innovation is essential to meeting the needs of the company's consumers, including new offerings within its core breakfast platform, adding value across signature bundles, such as Super Slam, and delivering crave-worthy core menu and limited-time-only recipes. The company's Denny's menu can be conveniently enjoyed by guests either in its restaurants, via takeout, curb-side or delivery through its Denny's on Demand platform and third-party delivery providers.

Denny's on Demand is the company's online ordering platform enabling its guests to order whatever they want, whenever they want. The new Denny's mobile app, available for IOS and Android, provides a personalized online ordering experience. Guests can also order from Dennys.com. Both the mobile app and website make it easy for guests to order their favorite Denny's items for takeout or delivery. Denny's Rewards members can access their digital wallets to receive rewards and promotions, both in-restaurant, online and via the Denny's mobile app.

Product Development

Denny's, a consumer-driven brand focused on craveable food and hospitality, provides a variety of menu choices for any time of day in a warm and comfortable atmosphere. The company's Product Development team innovates menu items that delight its guests.

The company continually evolves its menu with new innovations and improvements to meet the ever-changing consumer needs.

Product Sources and Availability

In the United States, the majority of Denny's products are purchased and distributed through McLane Company, Inc. under a long-term distribution contract. Outside the United States, the company and its International Denny's franchisees primarily use decentralized sourcing and distribution systems involving many different global, regional and local suppliers and distributors. The company's international franchisees generally select and manage their own third-party suppliers and distributors, subject to its internal standards.

Marketing and Advertising

The company deploys national, local and co-operative marketing strategies to promote and amplify Denny's brand strengths as America's Diner. Through integrated marketing strategies, the company promotes its various breakfast, lunch, dinner, and late-night menu offerings and premium limited-time-only offerings as well as the convenience of online ordering and payment for takeout or delivery.

Through its marketing team, Denny's anticipates consumer and market trends and fully leverages consumer insights to determine strategies for brand communication and demand generation. The company participates in comprehensive, integrated marketing activities, including print, broadcast, radio, digital and social advertising; multicultural marketing; public relations and brand reputation; customer relationship management; field marketing; and national and local promotions.

Trademarks and Service Marks

Through its wholly-owned subsidiaries, the company has certain trademarks and service marks registered with the United States Patent and Trademark Office and in international jurisdictions, including but not limited to, Denny's, and Keke's Breakfast Cafe.

Government Regulations

The operation of the company's franchise system is also subject to regulations enacted by a number of states and rules promulgated by the Federal Trade Commission. Due to its international franchising, the company is subject to governmental regulations throughout the world impacting the way it does business with its international franchisees. These include antitrust and tax requirements, anti-boycott regulations, import/export/customs and other international trade regulations, the USA Patriot Act and the Foreign Corrupt Practices Act. The company has implemented applicable aspects of The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act.

History

Denny's Corporation was founded in 1953. The company was incorporated in 1988.