Denny’s in the UK - Can You Franchise with Them?

22/12/2018 18:00 | Fast Food Franchises


Denny’s is one of the United States’ most reputable fast food chains and a popular choice of restaurant amongst those who appreciate good food and the company’s all-night service. However, Denny’s is yet to have an enormous impact on the UK market. Here, we take a look at the company’s history, examine whether it has adopted the franchise model, and look at what the future holds for the business.

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What is Denny’s?

Denny’s is a US-based restaurant chain that utilises nostalgic diner décor and markets itself as an always-open, traditional American diner. It has adopted the franchise model in many of the areas in which it operates and has grown to become one of the US’ best-loved brands.

One of Denny’s key selling points is the fact that it rarely closes unless required to do so by law. In fact, when the restaurants first started closing for Christmas in 1988, company management soon realised that many of the buildings had been built without locks or that keys had been lost many years before. This 24-hour approach has made it popular amongst those who keep unusual working hours and has earned Denny’s a reputation for reliability.

A brief history of Denny’s

Harold Butler and Richard Jezak established Denny’s in 1953. At first, it operated under the name Danny's Donuts and was based out of Lakewood, California. By 1956 the business had grown into a six-store chain and decided to shift focus. Rather than selling doughnuts, it became a 24-hour café that sold a wide range of foods. The business became Denny's in 1959, when Butler decided that a name change was necessary to avoid competition with another coffee and doughnuts store.

Over the next two decades, Denny's expanded at a remarkable rate. By '81, the business operated more than 1,000 restaurants spread across all 50 states, and in '87, Trans World Corporation (TW Corporation) acquired the brand. In turn, TW Corporation was acquired by Kohlberg Kravis Roberts, who sold off many of TW Corporations non-core business acquisitions. This resulted in Denny’s becoming the corporation’s primary concern and the organisation renaming itself Denny’s Corporation.

Over the previous decade, Denny’s have attempted aggressive international expansion and have entered into franchising agreements with a number of prestigious franchise developers.

What does Denny's menu look like?

Denny’s specialises in tradition fast food offerings, such as hamburgers, sandwiches, chicken dishes, and steaks. It also offers a number of breakfast options, including pancakes and “slams,” as well as omelettes and a healthy eating range. In some international markets, Denny’s offers unique menus. For instance, the two Denny’s restaurants in Guam offer an “only in Guam” menu, and the Curaçao restaurant features local kriyoyo dishes.

Where do Denny’s operate?

Denny’s now operate in all 50 states in the US, as well as at least 11 other countries. Out of a total of around 1,700 restaurants, there are approximately 1,600 in the US. Outside of the US, Canada, Mexico, and Puerto Rico are Denny's biggest markets, with roughly 90 restaurants shared between these three countries. Denny's has proven popular outside of its home nation and the scope for international expansion seems large. It is also worth noting that a separate company holds the licence for Denny's in Japan and has opened nearly 600 restaurants in the country. Restaurants in Japan offer a unique mix of traditional Denny's fare and local dishes and are a popular choice among residents and tourists alike.

Do Denny’s franchise?

Denny’s adopted the franchise model in 1963 and is now structured so that nearly all of its restaurants are franchised. This has allowed it to roll out the brand across an enormous geographic area and ensured that it’s become one of the most recognisable brands in the US. Franchising has also played an important role in the company’s international expansion.

Currently, Denny’s are looking for new franchisees to launch locations throughout the US. Available territories can be found in both the east and west of the country, though the east is considered far less developed and there is greater opportunity in this region. Internationally, Denny’s is looking to expand into the UK, mainland Europe, China, Southeast Asia, Australia, and South America.

Denny’s UK

In 2017, Denny’s struck a deal with UK-based Denny’s Magic Diners to bring 10 locations to the country over a period of several years. This marked the first move into British and European markets and is an experiment that will be watched closely to see whether the US diner experience can translate to the UK market.

Denny’s diner UK

The first of these 10 proposed restaurants launched in Swansea in 2017. Having proven remarkably popular with local consumers, the restaurant now intends to build on its initial success and create the foundations on which the brand can spread across the UK. The Swansea restaurant has worked closely with the US franchisor to ensure that the UK arm of the business meets the brand’s high standards.

What does the future hold for Denny’s?

Over the next few years, Denny’s will look to continue its international expansion and slowly grow its share of the US domestic market. The restaurant has worked hard to develop its reputation as a family-friendly brand and has paid particular attention to its food hygiene ratings, which are considered amongst the best in the industry. Over the past 50 years, the brand has managed to establish itself as one of the US market's most popular restaurant chains and its main aim will be to continue to build upon these solid foundations.

Alternatives to Denny’s

While there may be new Denny’s franchising opportunities in the UK soon, you may also want to look at other fast food franchises in the meantime. Some of the most appealing investments include Loaded Burgers, a gourmet burger chain, Wimpy, another US import, and Rocket’s, an Irish hamburger franchise that offers franchisees great flexibility. All three of these burger franchises are likely to reward franchisees with a profitable business and long-term financial security.

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