In the first of an occasional series, Global Franchise finds out what makes successful global brands tick. Denny’s has been a feature of the US landscape since 1952. Here’s why.
What inspired the move into franchising?
In 1953, founders Harold Butler and Richard Jezak opened the first Denny’s restaurant in Lakewood, CA under the name Danny’s Donuts. As the brand popularity grew, Denny’s incorporated the franchise model to help expand beyond its core market and in 1963, awarded its first franchise agreement. Today, over 90% of Denny’s in the U.S. and 100% of the International restaurants are owned and operated by a franchisee. With an established International track record and increased popularity of Western food brands, Denny’s® continues to grow their International footprint.
How many Denny’s locations are there now and what regions do they occupy?
There are over 1,700 Denny’s restaurants open in Canada, Costa Rica, Curacao, Dominican Republic, El Salvador, Guatemala, Honduras, Japan, Mexico, New Zealand the Philippines, the United Arab Emirates, the United Kingdom and the USA. Although there are also over 400 Denny’s units in Japan, Denny’s Inc. sold all the rights for the country of Japan in 1984.
What sets it apart from other restaurant brands?
Offering an extensive breakfast, lunch, dinner and late night menu with all dishes available all the time is a clear differentiator from competitors. Denny’s offers its franchisees and licensees a range of restaurant models. An innovative menu development department allows Denny’s to tailor its dishes to local tastes. And Denny’s has a number of trademarked dishes that are known worldwide, such as the Grand Slam™. A restaurants brand can only last 65+ years through constant innovation in its dishes, décor and marketing approach to a wide demographic, the company says.
How does Denny’s explore the international market?
To explore International opportunities, Denny’s relies upon the U.S. Commercial Service, the IFA and the International consultant company, EGS. The company looks for a country licensee that has the financial capabilities, a track record with scale with Western brands, an infrastructure to help support growth and access to quality real estate and suppliers.
What factors do they look at when deciding on a country to expand into?
Denny’s preferred countries will have a strong U.S. food brand presence, especially with dine-in restaurants, a healthy GDP growth and a thriving middle class.
What does the company look for in an international licensee?
Denny’s looks for a strong, marketing-oriented company or group, involved in food related business that has access to appropriate real estate, understands the value of branded concepts with a proven business system and is committed to a 24/7 operating platform. The ideal licensee candidate company must be able to demonstrate development and store-level performance track record with another F&B brand. Denny’s prefers they have experience as a major brand restaurant developer and operator of at least 10 Western brand units and experience with Western level food safety and quality assurance systems. The licensee candidate company must also have access to food supply chain resources
Who are some examples of your international licensees?
Denny’s Central America regional licensee, Comidas Especializadas S. de R.L. is a Honduras-based company that is also the licensee for Honduras for KFC and Pizza Hut and is the Pepsi bottler for the country. To date, there are five Denny’s restaurants in Honduras, one in El Salvador and one in Guatemala through this licensee. Their Middle East regional licensee, Advance Investment LLC (an affiliated entity of Food Quest Restaurant Management LLC), plans to open 30 new Denny’s restaurants in nine countries in the Middle East over the next ten years. Currently there are three Denny’s restaurants in Abu Dhabi and Dubai. The country licensee in the Philippines, the Bistro Group, has opened five Denny’s restaurants in Manila and Cebu City in two years. Bistro is also the country licensee of TGI Friday’s, Texas Roadhouse and Buffalo Wild Wings. Denny’s country licensee for the United Kingdom and Ireland is Magic Diners U.K., which has experience franchising Pizza Hut and Starbucks.
What was your USP?
Denny’s is a well-known family brand in the USA, offering breakfast, lunch, dinner and later night dishes; all dishes are available 24/7. Denny’s menu development team fits the taste profile of all cultures the brand expands to.
Denny’s advice for brands considering expanding overseas
Conduct a thorough due diligence, examine and understand the key traits of brands that have been successful and budget all costs including recruitment, start-up and on-going support. The single most important step is to invest adequate time to find the right franchisee or country developer.
SUCCESS STORIES
Name of company: Denny’s® DFO
CEO: John Miller
Date launched: 1953
Franchising since: 1963
Number of outlets: 1,750
