Denny's

Start a Denny's Franchise | Costs and Requirements

Do you have aspirations of owning your own business? Considering the franchise route? Then you may want to consider Denny’s franchise ownership. Denny’s is known for its 24-hour breakfast, lunch and dinner service, and is a popular option for people looking to own a quick serve restaurant (QSR) franchise. 

If you’re a fan of quirky menu items, opening a Denny’s location might be the right venture for you. Keep reading to find out everything you need to know about becoming a Denny’s Inc. franchise owner. 

A Little Denny’s History

In 1953, the first Denny's went by “Danny’s Donuts.” Opened in Lakewood, California, Danny’s Donuts’ mission was to serve the best coffee, donuts, and experiences 24 hours a day. Over the next decade, the restaurant underwent a few name changes until the founder, Harold Butler, decided on “Denny’s.”

Denny’s delicious meals and quality dining experience attracted hungry customers. By 1963, Denny's Inc. started franchising, expanding the brand into one of America’s largest and most popular full-service restaurants. The brand was international by 1967, opening a location in Acapulco, Mexico. The following year, Denny’s went public on the NYSE. 

As a franchisee, you’ll be part of a global brand that has brought its presence to Canada, New Zealand, Mexico, and the UAE, among others. Denny’s Inc. serves millions of customers each day. 

With its family-style food service, Denny's Inc. seeks to provide clients with a casual dining atmosphere where they can enjoy affordable meals. Denny's Inc. focuses on a broad customer segment, and its strategy to rely on the interstate highway system has made it one of the most recognizable restaurant chains in the United States.

Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.

How To Know If You’re Ready To Become a Franchisee

Becoming a business owner takes drive, but it also requires self-reflection. Before you decide whether or not you’re ready to become an owner of America’s diner, answer these essential questions for yourself.

As a franchise business owner, do you:

1. Have the drive to work as many hours as it takes to achieve business success?
2. Have the stamina to keep going even when the going gets tough?  
3. Actively listen, communicate, give, and receive feedback well?
4. Practice patience and positivity when interacting with others?  
5. Have what it takes to be a leader and a trainer for your staff? 
6. Have the bandwidth to be a leader and remain the front person for your business?  
7. Feel comfortable following the franchisor’s rules, coaching, and advice even if you think your way is better?  
8. Trust the process and the idea that the franchisor is working to benefit their entire franchise system?
9. Possess a real passion for the industry you’re entering?

If most of your answers were “yes,” it looks like you’ve got the temperament to become a franchise owner. Next, it’s time to weigh the pros and cons of owning a franchise to see if it’s the right decision for you.

Related: The 10 Commandments of Franchise Ownership

Pros and Cons of Being a Franchisee

Five benefits of owning a franchise include:

1. Roadmap to business success
2. Brand name recognition
3. Elevated success rate
4. Purchase benefits
5. Large profit margin potential

Five cons of owning a franchise include:

1. Franchisor restrictions: location, construction, design, marketing, and branding
2. Franchising may limit opportunities for creativity and new ideas
3. Initial startup costs
4. Ongoing investment costs
5. Franchisors have access to your finances

Ready to move forward? Keep reading to learn why Denny’s could be a good choice for you.

Why You May Want To Start a Denny's Inc. Franchise

Even in a world where fast-food restaurants seem to dominate, customers will still always seek a spot to take their loved ones to sit down and enjoy a good meal. Denny's Inc. offers full table service, providing tasty dishes with few frozen or processed ingredients. 

Denny's Inc. offers customers one of the best opportunities to socialize while dining by serving customers directly at the table.

Starting a Denny's Inc. franchise may be a mindful move for a potential franchisee who appreciates the value that ambiance, good food, and quality service add to the dining experience. 

With its moderately priced menu, customers visit Denny's to enjoy the classic cuisine, signature sauces, toppings, and dips they may not find elsewhere.

With a Denny's Inc. franchise, you can provide excellent dining experiences to families in your community. 

What Might Make a Denny's Inc. Franchise a Good Choice?

When choosing which franchise opportunity is right for you, you should consider the company’s values, focus, and goals. Look over Denny’s guiding principles to see if opening a Denny’s location could be a good fit. 

Guests First

Denny’s began as a place for families to come, feel comfortable, and get a good meal. That is still the goal of Denny’s restaurant today. Denny’s views its visitors as guests rather than customers and wants to welcome everyone with open arms. 

Related: Why Denny's CEO John Miller Prioritizes People and Purpose to Deliver Profitability

The Power of We

Denny’s strives to maintain a welcoming, collaborative, and safe environment for its guests and employees. The corporation believes that everything is better when people work together. 

Proud of Heritage

Denny’s is committed to staying true to its roots. It cares about being a classic American diner that serves delicious food at a fair price. Its doors are always open to signify that everyone is always welcome.

Hungry To Win

As a brand, Denny’s is always looking toward the future. It cares about continued growth and focuses on the following:

• Innovative thinking
• Teamwork
• Accountability
• Pushing boundaries

Embrace Openness

Denny’s cares about being open to all, not just to serve but to welcome everyone in. It is committed to diversity, equity, and inclusion. 

Everyone matters at Denny’s, no matter their background. Denny’s is committed to social responsibility, and they make an effort to give back to the communities they serve.  

The Finances of Franchising

Potential franchisees often wonder how much money it takes to start a franchise location. While you may expect staggering start-up costs, Denny’s proves that the investment can be pretty reasonable — especially if you factor in third-party financing options, which can help cover the franchise fee, startup cost, equipment and inventory.

To be part of the Denny's Inc. team, you should ensure you’re financially ready for the investment of the initial franchise fee and other startup costs. In addition, you should prepare for ongoing fees, including advertising, royalty, and potential renewal fees. 

Related: Want to Make Smart Investments? Use These Expert Tips.

Franchisees must also meet the company's net worth and liquid capital requirements. 

While having some experience can help with running a restaurant franchise, Denny’s Inc. prides itself on offering programs that teach you how to thrive. The Franchise Numbers

The brand is built on dedicated Denny's franchisees who continue its mission of serving. 

Its current franchise numbers include the following:

• Years in Franchising: 60+
• Number of Franchisees: 220+
• Number of Franchised Restaurants vs. Corporate Owned: 97%

The Franchise Financials

To be considered a potential franchisee with Denny’s, you must meet the financial requirements below. 

• Liquid Capital: $500,000
• Net Worth: $1,000,000
• Initial Investment: $1,428,422 - $2,326,537
• Franchise Fee: $30,000
• Franchise Terms: 20 years
• Royalty Fee: 4.5%
• Advertising Fee: 3%
• Training Fees: $5,000 - $36,000

As you can see, Denny’s franchise costs can be a substantial financial commitment. Of course, after the restaurant opening, your gross sales can bring you appealing returns on total investment (depending on site selection and demand). 

How To Open a Denny's Inc. Franchise

If you meet Denny’s financial qualifications and are ready to move forward, look at the step-by-step process of becoming a Denny’s franchise owner.

Related: What You Really Need to Look for When Considering a Franchise

1. Franchising Inquiry Form

You will fill out a preliminary application with your name and contact information and answer a few questions about yourself, your financial qualifications, and your experience. A representative will reach out to you if you are chosen to move forward. 

2. Franchise Disclosure Document

Denny’s will provide you with their FDD so you can make sure that you want to move forward. 

A comprehensive franchise agreement should include the following: 

• Business description and history
• Past or current litigations
• Bankruptcy history
• Financial requirements for investing
• Products and services information
• Proprietary information, copyrights, patents
• Financial statements

3. Franchise Application Packet

This is where you will submit all the details Denny’s will need to see if you qualify to move forward. This packet will include a submission of your financials and a business plan. 

When you are gathering information for your business plan, keep in mind that it should include the following: 

• Executive summary
• Analysis of target audience, demographics, and market
• Logistics and business operations
• Financial details

4. Interviews

If your franchise application packet is approved, Denny’s will move you into the interview process. There will be multiple interviews, so Denny’s can gather a true sense of who you are, what goals you’d like to reach, and how you would fit into their company.

Denny’s is looking for franchisees who:

• Have a passion for maintaining and growing the Denny’s brand
• Practice a growth mindset
• Value meaningful connection and believe in inclusivity
• Have business experience in restaurants, hospitality, or retail

Keep this in mind as you embark on your interview journey. During the process, you should also speak to existing franchisees and ask questions directed to the Denny's Inc. team as part of your due diligence. Gather as much information as you can to be as prepared as possible. 

5. Orientation and Management Training

Training will last 10 weeks. If you have an operator or a team you bring to your franchise, they will attend with you. The training program teaches skills for running your restaurant, maximizing performance, and growing your business.  

The Takeaway

Starting your very own Denny’s franchise is an exciting business opportunity. If you have the financial means to do it and the entrepreneurial motivation, you can build your dream one diner at a time. 

Looking for more franchising info? Explore Entrepreneur’s Franchise Center here.