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Denny-s-Reef-deliveryt.jpg Denny's Corp.
Denny's announces partnership with Reef for delivery.

Denny’s plans Reef partnership for urban delivery

Family-dining brand expects deal to boost its presence in dense metropolitan markets, CFO Robert Verostek tells ICR Conference

Denny’s Corp. has announced a partnership with Reef Technology, the ghost-kitchen operator, to test the brand’s delivery in dense urban markets, the full-service restaurant company said.

Robert Verostek, Denny’s chief financial officer, said Tuesday during an ICR Conference presentation that the development program “should enable Denny’s to penetrate underrepresented markets especially dense metropolitan trade areas.”

Neither Verostek nor a press release from the Spartanburg, S.C.-based family dining brand offered specific locations or timetables for the Reef partnership.

“We anticipate opening the first of several planned delivery-only locations during the first half of 2022,” Verostek said, “and are excited to see this partnership unfold.”

Miami-based Reef has become a major ghost kitchen player, signing deals with restaurant brands ranging from the Wendy’s Co. to 800 Degrees. Its portfolio includes Capriotti’s, Firenza, Milk Bar, Juice Press, Man vs. Fries, Muscle Maker Grill, Papa Murphy’s, Saladworks, Wow Bao and Umami Burgers.

Denny’s said it will off many of its signature menu items through the Reef partnership, including the Grand Slam breakfast, Grand Slamwich, Moons Over My Happy, Double Beery Banana Pancakes and apple crisp.

“As the first family-dining brand to partner with Reef, we are excited to see how Denny’s can serve more guests through Reef’s convenient and scalable delivery solutions,” said John Miller, Denny’s CEO, in a statement. “We have successfully extended the reach of the Denny’s brand through online and delivery channels using our existing network of restaurants, and we look forward to reaching even more guests with Reef. …”

Verostek also said Denny’s will offer a new development program that provides upfront cash incentive to help domestic franchisees capitalize on market opportunities

“The incentive ranges from $50,000 to $400,000, with more weight going toward under-penetrated markets,” Verostek said. “This is a great way for franchisees to take advantage of pandemic-driven market share opportunities and receive upfront cash compared to our historical approach to development incentives involving reduced fees over an extended timeframe.”

The planned cash-incentive program has been warmly received, he said.

“Franchisees expressed great enthusiasm when we announced this new program at our annual Denny's franchise association meeting in September,” Verostek said, and formal applications are expected later this year.

Before the ICR presentation Tuesday, Denny’s released same-store sales for the fourth quarter ended Dec. 29 as compared to the same period in 2019, before the pandemic, saying domestic systemwide same-store sales were up 0.7% with increases of 5.1% at company-owned units and up 0.4% at franchised restaurants.

In 2021, Denny’s opened 20 restaurants, including eight international locations. It closed 30 restaurants, bringing the year-end total restaurant count to 1,640.

In December 2021, the company sold two parcels of real estate for about $49 million, with $13 million of the proceeds to be used to buy real estate under four existing company restaurants through a series of like-kind exchange transactions.

Denny’s expects to release complete financial and operating results for its fourth quarter and fiscal year on Feb. 15.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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