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Denny's details new fast-casual model

Smaller cafe designed as growth vehicle for urban markets

Denny's new fast-casual model, Denny's Café, will allow the family-dining chain to expand in urban markets, an executive from the chain told Nation's Restaurant News.

David Demers, director of development projects and services for Spartanburg, S.C.-based Denny’s Corp., said the smaller footprint of Denny's Café opens up possibilities for the 1,600-unit chain in areas where real-estate constraints prevented it from developing traditional full-service restaurants.

“Denny’s Café was designed as a real-estate solution to fit locations where we otherwise can’t get to with our traditional brand,” he said. “After doing some real-estate analysis, we found there were up to 700 locations — in densely suburban and urban locations that we could get into with this fast-casual concept.”

EARLIER: Denny’s plans test of fast-casual concept

Demers said the first Denny's Café, a 3,000-square-foot store set to debut Nov. 1 in Orange, Calif., has been in the planning stages for about a year and that the company has just begun construction on a second unit in Livermore, Calif.

“This is a growth vehicle for us,” he said. “We’re going to start by getting the concept field tested with three company units. We have not green-lighted any franchising on the concept until we make sure we get it right, but we anticipate it will be ready for franchising in the first quarter of 2011."

Demers noted that the company expects the Denny's Café concept, with its smaller size, to be more cost-effective than traditional stores.

“Clearly, we’ve thought about how we could continue to grow the Denny’s brand, get into areas where there are tight markets and at a lower cost,” he said. “Those were part of our objectives.”

Demers said the Denny’s Café menu will feature about half of the items available in a full-service Denny’s unit and that no new menu additions have been created for it. He said the check average would be “in line with or more favorable than what you’d find at a traditional Denny’s" and that the recently introduced $2 $4 $6 $8 value menu would be available.

He added that the Denny's Café concept would not operate on a 24-hour basis, but, rather, between 7 a.m. and 10 p.m.

Demers said that even though Denny’s is exploring different strategies, like its Fresh Express kiosks on college campuses and now the new fast-casual concept, the company is not necessary targeting a different demographic.

"There is no replacement for the traditional Denny’s experience," he said. "In fact, we were told by our focus groups, ‘Don’t replace my Denny’s.' They told us that the ability to have large family meals and time to sit and relax was very desirable.

"However, further discussion and explanation of the fast-casual version was welcomed," he added, "and the groups shared with us that they really liked the idea of a quicker breakfast option where they could pay upfront, the freedom to choose their own seating and get refills at their convenience.”

Contact Elissa Elan at [email protected].

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