Dennys
Denny's offers casual dining with full-service restaurants and limited service concepts like The Den. Known for moderately-priced meals in a family-friendly atmosphere, Denny's operates in the quick-serve restaurant sector.
About Dennys
Denny's is an American table service diner-style restaurant chain. It operates over 1,400 restaurants in the United States, Canada, Mexico, Puerto Rico, and several other international locations.
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Dennys franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Denny's franchise ranges from $10,000 to $66,000 for management training and New Restaurant Opening fees [p.17], in addition to the initial franchise fee which is $30,000 [p.17]. The total investment also includes costs ranging from $1,618,374.75 to $3,056,874.75 for a Denny's Diner 2.0 facility, or from $255,000 to $826,000 for a nontraditional Denny's like The Den [p.1].
What is the initial franchise fee?
The initial franchise fee is $30,000 for a Denny's franchise [p.17]. For The Den by Denny's, it is $10,000 for a ten-year agreement [p.17]. This fee is non-refundable in any circumstance upon signing the Franchise Agreement.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a weekly fee of 4.5% of the franchisee's weekly gross sales [p.217]. The Company earns a 1.0% to 7.0% royalty fee on revenues from Denny's franchised restaurants, and a 0% to 3.25% advertising fee on these revenues [p.399].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement term is not specified in the excerpts provided. However, if you wish to continue operating after the initial term expires, the franchisor may offer a new franchise agreement (Successor Franchise Agreement) at their sole discretion [p.24]. This new agreement would require payment of an initial successor franchise fee of either $10,000 for a ten or eleven-year agreement or $30,000 for a twenty or twenty-one-year agreement [p.24; p.17].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires compliance with specific provisions. The sale must be approved by the Company, and the assignee must meet certain qualifications and undergo training. If the Company disapproves of an heir or beneficiary, there is a six-month period during which the executor or administrator can attempt to sell the franchise to another acceptable assignee. This process is governed by Sections 17.3, 17.6, and 17.7 [p.186, p.234]. Additionally, the Company retains a right of first refusal [p.188, p.236]. Good cause for denying such transfers includes, but is not limited to, specific criteria outlined in the FDD [p.111(g)].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.115]. Additionally, if all or part of the restaurant is taken by condemnation, the franchisor may terminate the franchise agreement effective on the date of condemnation [p.59]. The franchisor also has the right to terminate the franchise prior to expiration for good cause, such as failure to comply with lawful provisions of the franchise agreement and not curing such failure within a reasonable time frame [p.110].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific details on net worth or liquid capital requirements for qualifying as a franchisee.
Do I get an exclusive or protected territory?
No, you do not receive exclusive or protected territorial rights. The franchise is non-exclusive, and you are only granted the right to develop and open restaurants within a designated geographical area as specified in the development agreement [p.59, p.242, p.194]. This territory may range from a small radius to a larger DMA, but Denny's retains the right to operate or allow other franchisees to operate restaurants outside this area [p.60, p.308].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training and development of employees in all areas of restaurant operation through a training crew sent at the franchisee's expense prior to opening. This includes salaries, lodging, meals, travel expenses, transportation, and other related expenses [p.23, p.44]. Additionally, ongoing support functions are provided under the franchise agreement, which include administration of advertising programs (including local co-operatives) and other services that are considered a single performance obligation [p.399].
How many franchised outlets are there, and how many have closed or been terminated?
As of the end of the fiscal year December 25, 2024, there were 1,273 franchise restaurants in total. Out of these, 14 franchise restaurants were closed for at least one month during 2024 and are excluded from the sales figures provided [p.79].
Does the franchisor share any financial performance or earnings information?
The franchisor, DFO, LLC, does not make any financial performance representations other than the preceding ones. However, if you are purchasing an existing outlet, they may provide actual records of that outlet's performance [p.88]. Additionally, for a company restaurant sale, they will share profit and loss statements prepared by DI, though these do not include royalty payments [p.86]. This isn't specified in the excerpts for new franchise locations or general earnings projections.
What am I restricted to selling, and where must I buy supplies?
You are required to sell only those products and services specified by Denny's, including items from their standard menu as well as any specials or featured items designated by them. You must purchase all goods, services, supplies, fixtures, equipment, and inventory from approved vendors as outlined in the Brand Standards Manual [p.32-33]. Additionally, you are required to use only specified products from approved vendors for your operations [p.69].