Denny’s(DENN)2025-02-24 16:24Restaurant Operations - Denny's operates 1,499 restaurants globally, with 1,334 in the U.S. and 165 internationally, of which 96% are franchised or licensed[17] - Keke's, acquired on July 20, 2022, has 69 restaurants, with 80% being franchised, and off-premises sales represented about 16% of total sales in 2024[19][18] - Denny's anticipates the majority of future growth will come from franchised restaurant development, with 1,438 franchised restaurants as of December 25, 2024[29] - The company opened three international franchised locations in 2024, including one each in Canada, Honduras, and the Philippines[26] - Approximately 90% of Denny's domestic franchised restaurants operated under traditional franchise agreements as of December 25, 2024[22] Sales Performance - Off-premises sales, including delivery and virtual brands, accounted for approximately 20% of total sales in 2024[16] - Denny's average daily sales breakdown: breakfast 28%, lunch 36%, dinner 20%, and late night 16%[16] - Approximately 38% of weekly sales occur from Friday late night through Sunday lunch, indicating strong weekend performance[16] - Keke's off-premises sales represented approximately 16% of total sales in 2024[18] - The restaurant sales are generally higher in the second and third quarters, with potential impacts from severe weather conditions[61] Development and Growth - The company has 64 domestic development commitments as of December 25, 2024, to enhance market share in under-penetrated areas[25] - Keke's plans to open more company-operated cafes to accelerate brand expansion, with 23 development agreements for 141 franchised cafes[30] Employee Engagement and Diversity - The company offers Modern Health Mental Wellness benefits to all full-time employees and their families, along with a comprehensive Employee Assistance Program available 24/7[48] - Approximately 75% of the total workforce and 77% of restaurant management are diverse, with 64% of domestic restaurants owned by diverse franchisees[58] - The company offers a comprehensive benefits package, including a 401(k) savings plan, tuition reimbursement, and a competitive vacation policy to support employee well-being[48] - The company focuses on employee engagement through periodic surveys, leading to numerous policy changes based on feedback[47] Technology and Operations - The company invests in technology to enhance operations, including online ordering and payment systems, and has a robust cloud-based Enterprise Resource Planning (ERP) platform[55] - The company has invested in technology to enhance operations, including a cloud-based ERP platform that supports finance, accounting, and human resources functions[55] - The company is committed to developing new technologies and R&D efforts to improve guest experience, including online ordering and payment solutions[54] Corporate Governance and Ethics - The Board of Directors consists of nine directors, with 56% from diverse backgrounds and 56% being women[58] - The company maintains a code of ethics applicable to key executives and all salaried employees, ensuring accountability and ethical conduct[82] - Amendments or waivers to the Denny's Code of Conduct will be posted on the company's website, emphasizing transparency in governance[82] Community Engagement - The company is committed to community engagement, including initiatives like the Denny's Hungry for Education® Scholarship program and partnerships with No Kid Hungry[57] - The company has implemented initiatives to fight childhood hunger and increase spending with diverse businesses[57] Compliance and Security - The company maintains compliance with Payment Card Industry Data Security Standards (PCI DSS) to protect customer data and has implemented point-to-point encryption[56] - The company is committed to cybersecurity, maintaining compliance with PCI Data Security Standards and continuously enhancing its cybersecurity capabilities[56] - The company is subject to various federal, state, and international regulations affecting its operations, including health and safety standards[67] Competitive Position - The company has a strong competitive position with brand recognition, well-located restaurants, and economies of scale in advertising and purchasing[65] - The restaurant industry is highly competitive, with the company competing against national chains, independent operators, and quick-service restaurants[63] Financial Information - Denny's domestic contractual royalty rate averaged approximately 4.36% during 2024, with franchisees contributing up to 3.25% for marketing[22] - The average royalty rate for Denny's domestic franchise agreements was approximately 4.36% in 2024[22]