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Denny’s to expand fast-casual concept

Denny’s to expand fast-casual concept

The Den is one of several growth opportunities, executives say

Denny’s Corp. plans to grow its fast-casual concept called The Den, company officials said Wednesday.

Originally designed for college campuses, The Den has generated interest from traditional franchise operators, as well as contract foodservice providers, said John Miller, Denny’s president and CEO, in a call Wednesday discussing fourth-quarter earnings.

Early this year, the first off-campus location of The Den opened near San Diego State University in San Diego, operated by a traditional franchisee, Miller said.

The Den has units on seven campuses, according to its website, Four more campuses are listed as “coming soon.”

The concept is described as offering a menu with flavors “liberated from daypart oppression” — breakfast is served all day — and a “cave man chic meets counter service” design.

Miller mentioned The Den as one of a number of growth opportunities for Denny’s, which reported a domestic systemwide same-store sales increase of 4.7 percent for the fourth quarter ended Dec. 31, its highest quarterly sales in eight years.

The family-dining operator has reported growing momentum since its launch in 2011 of a brand revitalization strategy that has included menu upgrades, a focus on everyday value and an ongoing remodeling program that has reached 20 percent of the system so far.

The new “Heritage” design has been completed at 171 locations, including 44 company restaurants. In fiscal 2015, Denny’s expects to complete another 45 to 50 remodels.

The company has also been pushing international growth, reaching 106 locations outside the U.S., including six new restaurants in 2014, mostly in Canada. This year, the chain expects to open its first unit in the Middle East, in the United Arab Emirates.

Miller said the chain, which has 1,596 units in the U.S., mostly franchised, also has room to grow in the Midwest, Southeast and Northeast. Last year, franchisees opened three units in New York, including the first in Manhattan.

The chain’s 4.6-percent increase in same-store sales at franchised domestic locations and 5.8-percent increase at company units both reflected an increase in traffic and higher menu prices. Favorable menu mix also contributed at company units, Denny’s said.

Positive trends have continued into the first quarter, Miller said. The company projected same-store sales will range between 2.5 percent and 4 percent at company restaurants in 2015, and between 1.5 percent and 3 percent at franchised locations.

Denny’s expects commodity inflation of less than 2 percent in 2015. Menu prices increased by 1 percent in January. Some restaurants may increase prices again over the summer, the company said.

Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout

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