Denny’s Franchise Cost & Fees

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Description

Denny’s is everywhere. The full-service coffee shop and family restaurant chain operates more than 1,600 locations in the United States, Canada, Curacao, Costa Rica, Honduras, Japan, Mexico, New Zealand, Qatar and the United Arab Emirates. Denny’s is open all the time, serving breakfast, lunch, dinner and desserts no matter what time of day customers want it. Denny’s doesn’t even close on holidays, unless required. Denny’s is simply one of the best casual dining experiences available, with a large menu, great prices and a family-friendly atmosphere. Satisfaction every time.

Year Business Began: 1953

Franchising Since: 1963

Headquarters: Spartanburg, South Carolina

Estimated Number of Units: 1,720

Franchise Description: DFO, LLC is the franchisor. Denny’s restaurants are full service, family-style restaurants that offer and serve a wide variety of food. Denny’s restaurants offer a casual dining atmosphere and mod­erately-priced food designed to appeal to a broad spectrum of customers. The franchisor offers franchisees the opportunity to operate a standard restaurant with its comprehensive system for developing and operating Denny’s restaurants, which in­cludes trademarks, building designs and layouts, equipment, ingredients, recipes and specifications for authorized food products, training, methods of inventory control and certain operational and business standards and policies.

The Den is the franchisor’s limited service, nontraditional variation of the Denny’s concept, which may be distinguished from the standard Denny’s restaurant by a unique and modified menu. This concept may have limited or no table service.

Training Overview: Franchisees, their Managing Owner, and their Designated Operator must attend training for all training subjects. Restaurant managers must attend: Franchisee Manager-in-Training and Food Safety Training and Certification. All Persons-in-Charge must attend Food Safety Training and Certification. This Restaurant Manager Training Program is divided into 5 modules: Orientation, Passion for Culinary Management, Obsessed with Hospitality Management, Restaurant Management, and Transition Process. The New Restaurant Opening (NRO) and Training Assistance team will consist of one NRC Manager and up to seven specialists, depending up on the number of Denny’s restaurants which the franchisee owns and operates. The full NRC team consists of one NRC manager who will be at the restaurant for 21 days (13 days before, and 8 days after the restaurant opens), and seven trainers that will be at the restaurant 18 days (11 days before and 7 days after the restaurant opens). Franchisees must pay a set fee for the NRC team. The franchisor may require additional training for Managing Owners, Designated Operators, restaurant managers or other employees of Denny’s restaurants. In addition, the franchisor periodically offers optional training programs.

Territory Granted: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchi­sees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands that controlled by the franchisor. The franchisor may establish or franchise nontraditional restaurants, including The Den by Denny’s, in any proximity to conventional

Denny’s.Obligations and Restrictions: The franchisor requires at least one individual who signs the Franchise Agreement to participate personally in the direct operation of the Denny’s Restaurant. This includes “on-premises” supervision to promote Restaurant performance by guiding and directing employees to enforce brand stan­dards in the daily operations of the Restaurant. If franchisees is a legal entity, then they can satisfy this requirement if at least one of the owners/guarantors (referred to as the Managing Owner) meets the franchisor’s criteria. The Managing Owner must permanently reside near the Restaurant so long as s/he exercises this role. If there is no individual franchisee or owner/guarantor with sufficient restaurant opera­tions experience, or if qualified individuals do not meet the other requirements for this role, the franchisee must affiliate with a Designated Operator. The franchisor requires franchisees employ at least three managers for the restaurant. Only approved products and services may be sold in the restaurant.

Term of Agreement and Renewal: The length of the franchise term is the lesser of 20 years or the lease term. There is no renewal option.Financial Assistance: The franchisor is not obligated to do so, but it occasionally offers to finance the purchase of POS systems and other items introduced into the Denny’s System. The franchisor does not otherwise customarily accept notes or other instruments from franchisees and, accord­ingly, have not in the past sold, assigned, or discounted to a third party, in whole or in part, any note, contract, or other instrument executed by a franchisee. The franchisor has no present intent to sell, assign, or discount notes or instruments in the future to a third party. Neither the franchisor nor its affiliates receive revenue or other benefits from any person or entity for the placement of financing. The franchisor typically will not finance the purchase price or the initial franchise fee. In limited circumstances, the franchisor may finance a portion of the purchase price of a former company restaurant.

Investment Tables: 

Estimated Initial Investment for a Denny’s Heritage Prototype
Name of Fee Low High
Initial Franchise Fee $0 $30,000
Site Improvements $0 $300,000
Building and Improvements $700,000 $1,100,000
Architectural Design $40,000 $90,000
Equipment, Fixtures and Furnishings $350,000 $450,000
Signs $35,000 $90,000
DINE POS Systems $20,000 $40,000
Opening Inventory and Supplies $17,000 $28,000
Opening Advertising $3,000 $5,000
Opening Menus $425 $600
Opening Gift Cards $115.50 $115.50
New Restaurant Opening Training Team $0 $35,000
Security Deposits $10,000 $15,000
Insurance $15,000 $20,000
Permits $5,000 $100,000
Additional Funds – 3 months $100,000 $150,000
Total Estimated Initial Investment (exclusive of land) $1,305,540.50 $2,453,715.50
 

Disclaimer : The above information has been taken from the FDD of Denny’s. Year of FDD: 2018

 

Estimated Initial Investment for a The Den by Denny’s
Name of Fee Low High
Initial Franchise Fee $0 $10,000
Building and Improvements $35,000 $150,000
Architectural Design $13,000 $40,000
Equipment, Fixtures and Furnishings $65,000 $195,000
Signs $5,000 $20,000
D.I.N.E. POS Systems $20,000 $40,000
Opening Inventory and Supplies $7,000 $20,000
Opening Advertising $3,000 $5,000
New Restaurant Opening Training Team $0 $35,000
Security Deposits $10,000 $15,000
Insurance $15,000 $20,000
Permits $5,000 $25,000
Additional Funds – 3 months $50,000 $150,000
Total Estimated Initial Investment (exclusive of land) $228,000 $725,000