Denny’s Franchise Cost | Is Denny’s a franchise

Denny’s franchise (also known as Denny’s Diner on some of the locations’ signage) is an American table service diner-style restaurant chain. It operates over 1,700 restaurants in many countries. Originally opened as a coffee shop under the name Danny’s Donuts, Denny’s was known for always being open and serving breakfast, lunch, and dinner 24 hours a day. Denny’s did not close on holidays and nights, except where required by law. Many restaurants are located in proximity to freeway exits, bars, and in-service areas. Denny’s is open 24/7 and offers dinner, lunch, breakfast, and dessert whenever customers need them. With a huge menu, affordable rates, and a welcoming environment for families, Denny’s is indubitably one of the finest casual dining franchise options out there. 

As per IBISWorld, over the last five years, full-service restaurant revenue has increased at a CAGR of 0.4%, reaching $208.9 billion. This includes an increase of 1.1% in just 2023, with a profit margin of 4%.

How much does Denny’s franchise cost?

If you wish to become a potential franchisee of Denny’s, you must keep in mind the following associated costs: 

• Franchise fee: $30,000
• Initial investment: $1,428,422-$2,326,537
• Net worth: $1 million 
• Liquid Capital: $500,000
• Training fees: $5,000-$36,000
• Royalty fee: 4.5-7%
• Advertising fee: 3-3.35%

Denny’s Franchise Price and Costs
Denny’s Franchise Fee	$30,000
Denny’s Franchise Cost	$1,428,422-$2,326,537
Royalty Fee	4.5-7%
Advertising Fee	3-3.25%
Term of Agreement	20 years
Is franchise term renewable?	Yes

 

What is Denny’s franchise profit?

I will analyze Denny’s franchise profit and years to recoup the investment (ROI).

AUV	Estimated Annual Profit (12.5%)	Estimated Annual Profit (15%)	Estimated Annual Profit (18%)
$1,145,598	$ 143,199	$ 171,839	$ 206,207
Recoup mid-point $1,877,479	13 years (approx)	10 years (approx)	9 years (approx)

The estimated Denny’s franchise profit is in the range of $143,199 to $206,207 and it will take 9 to 13 years to recoup the investment. According to industry standards, getting a return on the franchise investment might take a very long time.

 

Denny’s Franchise Requirements

Take a look at the detailed procedural requirements for becoming Denny’s franchise owner if you satisfy the financial requirements of the restaurant chain and are prepared to proceed.

• Franchise Inquiry Form

You will complete a preliminary application containing your name, contact details, and answers to a few questions about you, your educational background, and your professional experience. If you are selected to continue, a representative will get in touch with you. 

• Franchise Disclosure Document

To help you ensure that you are interested in continuing, Denny’s will give you a copy of their FDD. This will include their present or previous litigations, financial requirements for investing, copyrights, patents, proprietary information, business history and description, history of bankruptcy, etc. 

• Franchise Application Packet

This is the place where you should provide all the information Denny’s will require to determine whether you are eligible to continue. You must submit your financial information together with a business plan in this packet. This shall include an executive summary, business and logistics operations, analysis of the market, demographics, and target audience, financial details, etc. 

• Interviews

You will proceed to the interview stage if Denny’s accepts your franchise application packet. There will be several interviews so that Denny’s can get a complete picture of you, what objectives you have, and how you might fit into their organization. 

• Orientation and Management Training

Ten weeks will be allotted for orientation and management training. If you bring a team or an operator to your franchise, they will be obligated to attend with you. The training course gives abilities for managing your restaurant, enhancing performance, and expanding your company.  

The financial requirements to become a franchisee will be dealt with further in the blog, continue reading. 

Denny’s Franchise Rankings

 

The rankings of Denny’s franchise are as follows: 

• #1 in Miscellaneous full-service restaurants in 2022: Best of the best
• #124 in 2023: Franchise 500 ranking
• #42 in 2023: Top global franchises 
• #1 in Miscellaneous full-service restaurants in 2022

What is Denny’s?

A Denny’s franchise is considered to be a full-service, family-style restaurant with a large selection of meals to choose from. The casual dining environment and moderately priced meals at Denny’s restaurants are intended to appeal to a wide range of visitors. With its extensive system for creating and running Denny’s restaurants, the franchisor gives franchisees the chance to run a typical restaurant and earn profits.

The Denny’s Corporation is quite successful. The business expanded significantly between 2018 and 2019, but in 2020 it experienced a decline. Considering that the Covid-19 pandemic was likely to blame for the shrinkage, it’s critical to keep in mind that this franchise may be impacted by other crises in the future. 

Is Dennys a Franchise Opportunity?

Yes, Dennys is always looking for motivated people who want to succeed in a market that offers many franchising opportunities. You need to have at least 1 million dollars in net worth and at least 500,000 dollars in liquid capital to be eligible for Denny’s franchise. 

They additionally require prior hospitality, restaurant, or retail expertise from prospective franchisees. Like most other franchises, opening a franchise follows a similar procedure. If your application is accepted, you will be contacted for an interview.

Facts That Nobody Told You About Denny’s

• They have had many names previously. 
• In a single day, they provided 2 million Grand Slams for free.
• They failed to have any locks until 1988. 
• Hank Aaron is associated with the Grand Slam.
• You might be served by celebrities! 
• Children eat free every Tuesday. 
• Their priciest order costs around $300. 

Denny’s Franchise Review and Information
Industry Type	Food
Sub Category	Miscellaneous full-service restaurants
Year Established	1953
Company Name	Denny’s
Founder/Management Head	Kelli Valade (CEO & President)
Franchising Started	1963
Employees at Company H.O	300
Franchise Expansion Plan	US and worldwide
Number of Units	1631 (as of 2022)
Number of Franchise Units	No information available
Social Media Handles	Facebook
	Twitter
	Youtube
	Instagram
Company Office location	203 E. Main St. Spartanburg, SC 29319

 

Denny’s Training to Franchises

All training sessions must be attended by the managing owner, the franchisee as well as the designated operator. Food safety training and certification along with franchisee manager-in-training must be attended by all restaurant managers. The restaurant manager training program is categorized under the following five modules:

• Orientation
• Obsessed with hospitality management
• Restaurant management
• Passion for culinary management
• Transition process

Additionally, the franchisor mandates that three franchise restaurant managers must be assigned to the NRO training team for a shift of at least six hours every day, to be scheduled by the NRO Manager. Unless the franchisee’s state allows for a shorter period of time, food safety training must be finished within 90 days of employment. 

For restaurant managers, designated operators, managing owners, and other staff members of Denny’s restaurants, the franchisor may demand additional training. Workshops for training are however optional.

Denny’s Operations to Franchises

By investing in Dennys franchise, you will have access to a variety of resources and support services from the company to help you run a successful restaurant. Here are some of the key operational aspects of being a Denny’s franchisee:

• Site Selection

Dennys assists its franchisees in choosing a location for their restaurant. The business has a dedicated staff that assesses potential locations on the basis of an array of aspects, including local competition, traffic patterns, and demographics. The business will assist with lease or purchase negotiations once a location has been chosen.

• Restaurant Design

The process for designing and building restaurants at Denny’s is effectively established. The business offers franchisees a collection of standard plans and requirements along with instructions on how to modify the design to suit the local market. Additionally, Denny’s has a group of engineers and architects who may help with the process of construction.

• Training and Marketing

Both aspects have been previously dealt with in-depth above, we hope you are cognizant of the perks it associates itself with.

• Operational Support 

Dennys offers franchisees ongoing assistance in areas including menu planning, supply chain administration, and implementation of technology. Additionally, the business employs a group of field representatives that travel to franchise locations to offer guidance and support in the case of issues with operations.

• Financial Performance

In order to help franchisees identify areas for development and increase profitability, Denny’s publishes financial performance statistics against other Denny’s restaurants.

In general, Denny’s franchise system is created to offer franchisees complete assistance in all facets of operating a successful restaurant, from the selection of a location and building through training, marketing, and continuing operations support.

How is Denny’s Territory Granted to Franchises

Franchisees do not acquire any exclusive area or territorial rights under the Franchise Agreement, with the exception of the ability to run Denny’s restaurant on the restaurant’s property or from there. Restaurants can only be operated by franchisees in areas that the franchisor has given permission to operate. Franchisees are not permitted to run the restaurant or provide or sell any goods or services from anywhere other than the permitted location, while they can operate an off-site business in the designated region if the franchisor permits or compels them to do so.

 

What is the Franchise Term of Agreement and Renewal?

 

The franchise period is shorter of 20 years, 10 years, or the life of the lease. There is no chance of renewal. The franchisor may execute a 10- or 20-year Successor Franchise Agreement with qualifying franchisees even though the Franchise Agreement contains no provisions for renewal.

 

Does Denny’s provide Financial Assistance to Franchises?

 

The franchisor periodically offers to finance the acquisition of point-of-sale systems as well as additional products added to Denny’s system, though it is not required to. I advise getting in touch with the franchise development team at Denny’s if you are interested in starting Denny’s franchise and have questions regarding your financing options.

Pros & Cons of owning a Denny’s Franchise

Pros of owning Dennys Franchise 

• An outline for business success

• Purchase benefits

• Acknowledgment of brand value

• Higher success rate

• Opportunity for high-profit margins

Cons of Owning Dennys Franchise

• Location, marketing, development, design, and branding restrictions imposed by the franchisor

• Franchises may reduce prospects for innovation and creativity.

• Start-up expenses

• Costs of ongoing investments

• Franchise owners can access your money

 

Franchise Deck Analysis and Overview

Although it also serves lunch and dinner, the iconic American restaurant company Dennys is recognized for its breakfast menu. Restaurants owned by the company and those that are franchised are both operated by it. Franchises Deck analysis and overview shall primarily focus on the operations and franchising opportunities carried out and provided by Denny’s that make it a popular venture in society. 

• Operations

Since its establishment in 1953, Dennys has expanded to evolve into one of the biggest options for dining chains in the US, with more than 1,700 locations across the globe. The corporate office of the company is situated in Spartanburg, South Carolina.

Typically opening 24*7, Denny’s restaurants specialize in serving breakfast, lunch, and dinner. Bacon, pancakes, sausage, and eggs are just a few of the selections on their morning breakfast menu. It additionally includes burgers, salads, sandwiches, and other entrees.

• Franchising opportunities 

Since giving franchise options in 1963, Dennys has grown its franchise network to cover more than 95% of its locations. In order to serve franchisees, the company has developed a strong franchising infrastructure that offers support in areas including site selection, marketing, restaurant design,  ongoing operational assistance, training, etc. 

Dennys provides a number of different franchise formats, such as unconventional locations near airports, colleges, and other places, in addition to a program for turning current independent restaurants into Denny’s franchises.

Is the Denny’s Franchise Profit Worth the Franchise Cost?

Franchising Dennys can prove to be worth the franchise cost. Before opening a franchise, our advice is to consider the location of your Denny’s restaurant, your plans for resisting crises such as the global pandemic, and to speak to a minimum of one franchise owner.

Denny’s Franchise Success and Failure Rate

 

The below table will highlight Dennys franchise success and failure rate for the last 3 years. This will supplement your decision-making process.

 

Year	Format	Start	End	Change
2018	Franchise Owned	1429	1405	-24
	Company Owned	178	173	-5
2019	Franchise Owned	1405	1491	+86
	Company Owned	173	68	-105
2020	Franchise Owned	1491	1439	-52
	Company Owned	68	65	-3

Competition Analysis of Denny’s Franchise

 

Dennys	Cost to Franchise	Franchisee Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
Denny’s Franchise	$1,428,422-$2,326,537	$30,000	4.5-7%+3-3.25%	$143,199 to $206,207	9-13 years	3.2/5.0
Old Chicago Pizza and Taproom Franchise	$1,399,000 – $2,177,000	$40,000	4%+2%	$40.3 million	–	3.9/5.0
HWY 55 Franchise	$196,055 – $433,055	$25,000	5%+2%	$5.2 million	–	3.6/5.0
Pepe’s Mexican Franchise	$207,000 – $652,000	$15,000	4%+1%	$5.9 million	–	3.7/5.0
Golden Corral Franchise	$2,168,419 – $6,602,5130	$50,000	4%+2%	$195.1 million	–	4.0/5.0
Hooters Franchise	$956,500 – $4,275,000	$75,000	5%+1%	$605 million	–	4.5/5.0

The Franchise Deck rating for Denny’s franchise is 3.2/5.0.

Conclusion: Is Denny’s Franchise a good choice?

The possibility to launch your own Denny’s franchise is thrilling. You can create your ideal restaurant if you have the resources and the determination to succeed. Denny’s is known to be one of the largest restaurant chains in the American fast food market. Even after all these years, people still consume it simply because of its fashion and cost. 

With a targeted, aggressive, long-term franchise growth program supported by cutting-edge, industry-leading franchise support systems, Denny’s is committed to assisting the expansion of its franchise community. Overall, Denny’s has proved to be a successful franchise system, as seen by a large number of franchisees who own several restaurants and the company’s ongoing domestic and worldwide expansion.

However, businesses like Dennys will be affected by the recent increase in healthier meal options, so bear that in mind. Dennys struggled during the pandemic as well. During Covid times, the family eating atmosphere that encourages customers to eat there failed to be very tempting. When thinking about creating a franchise, this is something you should definitely consider.

 

Entrepreneurs who want to open a franchise in the category full-service  franchise opportunities categories can look at 

1. Old Chicago Pizza and Taproom Franchise 
2. Hwy 55 Franchise
3. Pepe’s Mexican Franchise
4. Golden Corral Franchise 
5. Hooters franchise 
6. Portillos franchise

 

Frequently Asked Questions (FAQs)

• Is Denny’s franchise profitable?

Yes, franchising Denny’s can be very profitable provided that you take care of all the costs and other essential elements associated with the process. 

• Can you make money owning a Denny’s?

Yes, you can definitely make money owning a Dennys. 

• Is Denny’s a franchise?

Yes, Dennys is a franchise. They started franchising in 1963. 

• How much is Denny’s franchise?

It requires somewhere between $1,428,422 and $2,326,537 as an initial investment coupled with a franchise fee of $30,000. 

• How do Denny’s franchises make money?

They provide breakfast, lunch, and dinner options to customers to make money as a lucrative full-service restaurant.