The dynamic duo of franchising

Black Enterprise, Sept, 1995 by Valencia Roner

Denny's image is still suffering from the effects of the settlements, but that isn't all that ails the national chain. Ron Paul, a Chicago-based restaurant consultant, says, "Denny's is part of the family dining segment, which is being squeezed out by the fast-food segment [McDonald's and Burger King], which offer lower prices, and the casual dining segment [Friday's and Bennigan's], which meet customers' demands for a more entertaining environment."

With all the challenges Denny's faces, one might wonder whether owning a Denny's franchise is a smart investment. But Taylor has a can-do attitude. "The key to making this thing work is to take it one day at a time," she says. "With Denny's support, my experience and desire to excel, and our combined philosophy on customer satisfaction, it must work."

And it is working. Karen Randall, director of public relations for Flagstar, says Denny's is spending an average of $250,000 "re-imaging" each of its stores as part of a $1.7 billion restructuring plan that began in 1994. New decor, furniture and lighting are all part of the massive makeover. Stores that have completed the re-imaging process have produced 15% to 20% better revenues than standard Denny's franchises, Randall claims. As a result, Denny's has reported a 32.6% increase in first-quarter operating income, from $22.9 million to $30.4 million, over last year's first quarter. "We expect that 30% to 40% of Denny's 978 company-owned restaurants will be re-imaged by year-end," says Randall.

Other initiatives are also providing a lift. Analysts say that introducing the $1.99 Grand Slam breakfast value pricing strategy allowed Denny's to compete with industry pricing trends while increasing sales and store traffic in 1994.

When Taylor receives her franchise, she will have to face the market realities on her own. However, being a Fast Track "graduate" will provide several advantages. She'll receive a fully operational, up-and-running store with established customer traffic, employees and a management staff. Plus, she'll get full financing to make her purchase. The Denny's franchise fee is $35,000, plus $1.2 million to $1.5 million to acquire a new franchise property. "Under the program, I can realize my dream of owning a business with far less financial burden," says Taylor.

A few more months of waking up at dawn and Taylor's dream will be a reality. She embraces the challenge that is set before her. "I know this is what I was meant to do."