Q3 2024 Denny's Corp Earnings Call and Investor Day Part 1

We're a rowdy bunch good morning.

This is a great. This is a great start some energy in the room.

Speaker Change: Morning, everyone. Thank you for being here I know, we've got some people that have come from the west coast. Some people that didn't have to travel far I'm. So for all of you that are spending time with us here. Today. We appreciate you were very grateful welcome to the Denny's Investor Day, or Investor Conference Opera and this is for 2024, obviously the theme igniting growth the rise of a new.

That then is that something that will unfold.

As we talked throughout the day, something we're really excited about them I think you'll see from the stories, you'll hear the plans, you'll see you know including outlook for the longer term that we've got a really great day planned for you and again, we appreciate you being here before I do start let me quickly.

Speaker Change: Quickly.

Speaker Change: Make sure to remind you that we will be discussing forward looking statements and non-GAAP financial measures. During this event.

Speaker Change: Please refer to our SEC filings for a discussion of risk factors and quarterly financial releases for an explanation of our non-GAAP reconciliation to the comparable GAAP measures.

Speaker Change: So with that I'm excited to get started and talk to you about what you're going to see from myself and from our team of obviously I'm Kelly Blade I'm, the Chief Executive Officer for the Denny's Corporation, but you will see us talking about both of our brands. The Denny's brand. The flagship brands and then also Kiki's breakfast Cafe, and we're really excited because until now and having purchased Kiki's breakfast Cafe brand.

Speaker Change: Just a couple of years ago, we've been spending a lot of our time integrating that brand into our shared service model and into the Denny's Corporation and we'll get to tell you a little bit more you've been anxious to hear about it and hear what we've been doing with this brand since we purchased it and you will get to hear that complete story today. So I'm going to review we released this morning as most of you know and so I'll review.

The highlights from quarter three this is still an incredibly volatile environment.

Speaker Change: We are in I believe we controlled what we can control and what we will discuss and I'll give you the highlights in a moment I'm going to talk about the state of the industry and what it looks like in the near term and what we can see in terms of the outlook for the consumer and just in general what we know about the industry. We will talk about the Denny's brand specifically, our playbook will talk about our crave strategies that apply.

Speaker Change: For both brands and you'll hear from Dave Schmidt, our president of <unk> and you'll hear from several on the Denny's team as they present those plants, we have a really unique and special opportunity for you. We've got some of our franchisees here from both brands that will be coming up and they'll be doing a fireside chat and some Q&A with Raphael gross from ICR. We're excited about that and then finally, you'll hear Robert.

Speaker Change: About our long term outlook something that has.

Speaker Change: Never never been done never been done for US. This was a chance for you to hear from our some some new members arent executive team, but this is a renewed and highly focused executive team and leadership team for both brands will talk about the structure of both of those brands now having moved from just the Danny's flagship brand for so many years to now having two brands and our.

Speaker Change: Oh, yes, so we'll talk about that you'll get a chance, we'll get a chance to showcase that new leadership at today until those stories as I've mentioned, we are going to show you and articulate our path to revenue growth and the cash flow growth, we're going to talk about the stabilization of the Denny's brand and the transformation that's underway for the Denny's brand when I talk to you about the path to getting to net growth and improved.

Speaker Change: For all up for all and increases in shareholder value in general and again I mentioned, we're going to provide a long term outlook.

Speaker Change: Now this is the executive team so when part after purchasing the Kiki's brand, we really had to set up an executive team that could focus on in some cases there are people maniacally focused only on a single brand like Chris Bowden, who is here, who is our president and CEO of the Denny's brand and Dave Schmidt, who is the president and runs the Casey's brand. So they are split into two separate teams everything else's leg.

<unk> most of the people here you see our leverage and support both brands and you'll hear from some of those folks today in.

Speaker Change: In particular, what I say about this leadership team we have both a blend of folks that have been here like Robert rustic, who you know many of you know our CFO. That's 25 years with the Denny's brand, Steve Dunn, Our Chief Development Officer, who you'll hear from today is 20 years as of last Friday, and then we have new members like Patty Trevino, who has extensive experience in almost every segment in the industry and us.

Now joined US just about three months or so ago and she's ready to take the stage and talk to you about the marketing transformation Thats underway. She is our new Chief brand officer.

Speaker Change: And so with that let me highlight some of the things you saw this morning in terms of.

Speaker Change: That does not move in for me.

Speaker Change: This is being webcast as well so we're all trying to kind of keep up and make sure, but I do want to make sure that.

Speaker Change: There we go now we're advancing awesome alright.

Speaker Change: For the highlights for.

The Denny's system in particular, what you saw a sequential improvement from July August impact from weather a little bit.

Speaker Change: And then a stronger September and again a strong so far strong result in early October So for July in particular were flat sales for the Denny's brand August was negative impacted by weather negative one seven sequential improvement when we turned on.

Our value offer our unique value equity with 2468, we saw that increase in September to positive $1. One started stealing share again from not only casual dining where we've been stealing share a great deal, but we also started stealing share from family dining in the last three quarters and we definitely saw that same sequential improvement bigger gains in bigger beats the blue.

Speaker Change: Box intelligence and other benchmarks that we track.

Speaker Change: October one 7% so far so we are really thrilled as we turned out value offer back on we're thrilled with the benefits that we are seeing the other things that impacted our quarter aside from coming out on August 21st without everyday value proposition that we know the guests. So desperately needs. We also were able to launch and had been working on a launch of our third virtual brands.

Speaker Change: With band a burrito that contributed to our sales increase about 70 basis points and we have almost 1000 units on the band of Brito concept. You're you will hear later today virtual brands, we hear some talking about it we hear some that arent talking about it and Danny still seems to be leaning in as a strategy and you'll hear us confirm or reconfirm why for this brand.

Speaker Change: It completely makes sense and it is an incremental guest and why we are continuing to be bullish on our virtual brands and our off premise strategy as a whole given our hours at the Denny's brand given given the fact that we can leverage our fixed cost I would also say for many brands and you follow them that have said never to off premise never never to those third party aggregators.

Speaker Change: Many now say, yes, even post pandemic there are few that I'll leave I'll leave I won't mention them right now, but you will see that and you do hear that so for US we will we'll double down and talk to you about why that strategy are important to us would you ever remodel program that we called down or 2.0, you're going to hear a lot about that and not only what that did for us in this quarter, but what we think can be.

Speaker Change: Unlocked when we start to get a tremendous scale on our remodel program, you'll hear us talk about the incentives were willing to give and how we'll make sure that we can get that flywheel, turning and get back into some some really strong cadence around remodeling, our our buildings our asset upgrading our assets. So we have great results on those on those four things where they can.

Speaker Change: Tributes factors to the results that we saw an improvement that we saw in the quarter.

On the kids brand Cafe. They were we were negative 1%, but also saw sequential improvements or the kiki's brands heavily impacted right now as you can imagine by two storms that came through both clean and Milton So that brand is heavily impacted by that because it is almost all in Florida. That's a Florida based brands that we are expanding and we have taken outside of.

Speaker Change: Florida already actually have locations in Tennessee, two of them, we've been growing that at a fairly decent clip and we'll continue to do that we'll talk about those growth plans in a minute, we actually opened in Colorado two weeks ago as well. So we've got a strong start we spent our time doing the right things I believe finding the right leadership talents, Dave Schmitz, absolutely the right person.

Coming from a portfolio company with Bloom and brands actually he started his career at any way back when and then spent a lot of his time with different brands. Both in the CFO role and our president will with different brands at Bonefish, So absolute right person to come in and leverage what he knows and leverage our portfolio and our shared service assets and then unlock the potential of these.

Speaker Change: Great franchisees and the model I keep these brand Capex Kickers breakfast cafe, rather so there was improvement there heavily hit by or heavily impacted more impacted by the storms because of their location. It did launch 80% of the system. Now has alcohol has angry as my most is doing really well and we'll let the franchisees tell you about that and Dave speak more to that but one of the things we found in our <unk>.

Speaker Change: Search in trying to understand and best protect what was special about the brand the secret sauce. If you will when we acquired the brand. We we did a ton of research what we call brand ethos research to find out what guests expected one of the things. We learned was you expect to be able to have maybe I'm Margaret maybe I'm. The most of them, maybe sangria something with brunch brunch as funds and this is.

Speaker Change: The brand leaning very hard into what they can excel at and what they could have different where they can differentiate crushed starts serve daily there's new work. That's been done just to lean into what makes them unique and different and separate from others. In the category. This is becoming a pretty crowded segment and I'll talk about what the acquisition is meant for us, but they've had they've turned online.

But the incentives, we're going to give and how we'll make sure that we can get that flywheel, turning and get back into some some really strong cadence around remodeling, our our buildings our asset upgrading our assets. So we have great results on those on those four things were the contributing factors to the results that we saw an improvement that we saw in the quarter.

Speaker Change: That they've been able to turn their systems on do you do different things with their website and really start to activate online sales taking them from where they were to have a really great a.

On the kids brand Cafe. They were we were negative 1%, but also saw sequential improvements or the kiki's brands heavily impacted right now as you can imagine by two storms that came through both Helene and Milton So that brand is heavily impacted by that because it is.

Speaker Change: Robust plan for off premise sales as well as online just online having their website now equipped to speak to that and then we do have so we know there's been a lot of interest in how many developments are how many units in the development pipeline or how many signed agreements, though right now over 140 are signed and we're excited about the potential to continue to grow that brand.

Most all in Florida, that's a Florida based brands that we are expanding and we have taken outside of Florida already actually have locations in Tennessee, two of them and we've been growing that at a fairly decent clip and we'll continue to do that we'll talk about those growth plans in a minute, we actually opened in Colorado two weeks ago as well. So we've got a strong start we spend our time.

Speaker Change: We've got a remodel that's happened as well so you've got a whole fleet in Florida that were not ever remodeled never ever touched and I can tell you. These franchisees that are with the <unk> brand are really excited about the potential in our first one in Dr. Philip really did extremely well.

The right things I believe finding the right leadership talents, Dave Schmitz, absolutely the right person coming from a portfolio company with Bloom and brands actually she started his career at Denny's way back when and then spent a lot of his time with different brands. Both in the CFO role and our president will with different brands at Bonefish, So absolute right person to come in and lead.

Speaker Change: The highlights from the quarter again still navigating a tough environment and against stealing share. So share. The name of the game. This is an industry that's been negative in transactions for a very long time. So while we are not we still wants more we did see that sequential improvement last fourth of 50 base basis point improvement from prior quarter on the Denny's business and a bigger even bigger.

Average, what he knows and leverage our portfolio and our shared service assets and then unlock the potential of these great franchisees and the model I Kiki's brand Cafe Kiki's breakfast cafe, rather so there was improvement there heavily hit by or heavily impacted more impacted by the storms because of their location. It did launch 80% of the system now has alcohol has sangria as my most of those doing.

<unk> improvement on the Casey's brand over 350 basis point sequential improvement from the prior quarter, so really measured but consistent and wanting to get obviously more and more are more and more sales and the trajectory is strong as we mentioned.

Really well, we'll let the franchisees tell you about that and Dave speak more to that but one of the things. We found in our research in trying to understand and best protect what was special about the brand the secret sauce. If you will when we acquired the brand we did a ton of research what we call brand ethos research to find out what guests expected one of the things. We learned was you expect to be able to have maybe I'm.

Speaker Change: $11 8 million and total operating revenue our adjusted franchise operation margin did not change significantly at 51% slightly below the last quarter. Our adjusted company restaurant operating margin was $6 two or 11, 8% as you can see here total operating income at 11 seven.

Speaker Change: Our adjusted EBITDA 20, right on $20 million, some 0.8 for Capex and then 14th.

Margaret maybe I'm the most of them, maybe sangria something with brunch brunch as funds and this is a brand leaning very hard into what they can excel at and what they can have different where they can differentiate fresh starts serve daily there's new work. That's been done just to lean into what makes them unique and different and separate from others in the category. This is becoming a pretty crowded.

Speaker Change: And EPS.

So this one I know we'll go through here for a minute just to make sure that this is all very clear because you're seeing some new numbers here and I'll call out just what is different so we're tightening the range on sales guidance tightening that range. There as you can see we did not change the openings, we have changed the closures and you're going to hear why you're going to hear.

And I'll talk about what the acquisition is meant for us, but they've had they've turned online.

They've been able to turn their systems on do you do different things with their website and really start to activate online sales taking them from where they were to have a really great. A robust plan for off premise sales as well as online just online and having their website now equipped to speak to that and then we do have so we know there's been a lot of interest in how many developments.

Speaker Change: Our strategic approach to why we are looking at closures in fact for many conversations that we have with with with you over the years and knowing what our model looks like today post pandemic. We believe this is absolutely the right thing to do to kind of work towards getting our system healthier now the first brand to do this and have a bigger closure number that was originally.

How many units in the development pipeline or how many signed agreements, though right now over 140 are signed and we're excited about the potential to continue to grow that brand. We've got a remodel that's happened as well so you've got a whole fleet in Florida that were not ever remodeled never ever touched and I can tell you. These franchisees that are with the <unk> brand or <unk>.

40 to 60, we're now talking about 75 to 95, but again on our terms working with those franchisees looking at our quintile analysis and you'll hear us talk about all the inputs that went into.

Speaker Change: This new number and these new expectation and then finally on EBITDA. There was an adjustment there that's been made down $281 million to $84 million.

Excited about the potential in our first one in Dr. Phillips really did extremely well so the highlights from the quarter again still navigating a tough environment and against stealing share. So share is the name of the game. This is an industry that's been negative in transactions for a very long time. So while we are not we still once more we did see that sequential improvement last quarter 50 base.

Speaker Change: That's where the state of the industry again I'd like to believe we are controlling everything we can control and have a good playbook with many initiatives in the works or initiatives when they hit and as they scale. We know what they can contribute to our business into our model the industry and the headwinds are real and I'll step you through just what that.

Basis point improvement from prior quarter on the Denny's business and a bigger even bigger improvement on the Casey's brand over 350 basis point sequential improvement from the prior quarter, so really measured but consistent and wanting to get obviously more and more are more and more sales and the trajectory is strong.

Speaker Change: Like in yet why we are still optimistic about the plans going forward.

Speaker Change: This but the choppy economy and the issues that the American people are the things that are on everyone's mind right now that is not expected change in the near term. There is nothing that we see that suggest that slight improvement maybe post election, but there's not a lot of reason to think in the near term it won't continue to be choppy.

Speaker Change: We mentioned $111 8 million and total operating revenue our adjusted franchise operation margin did not change significantly at 51% slightly below the last quarter. Our adjusted company restaurant operating margin was $6 two or 11, 8% as you can see here total operating income of $11 seven or.

Speaker Change: These are some of the reasons why personal savings rates. They are below where they were in 2019 or they're below pre pandemic levels now that is impacting everyone, but especially the lower income household that I'll speak to in a in a moment food away from home continues to outpace food in grocery stores and when that happen.

Speaker Change: Our adjusted EBITDA 20, right on 20 million some 0.8 for Capex, and then 14 cents and EPS.

Speaker Change: There is an absolute real trade down that occurs and people say I can get that at the gross store make it myself versus going out and it's a delta I'm almost 3.4% just a little over 1% for grocery store inflation and when that if you went back 20 years of history. When you see that kind of dynamic happening you do see people that do the math, but with their feet and stay home or.

Speaker Change: So this one I know we'll go through here for a minute just to make sure that this is all very clear because you're seeing some new numbers here and I'll call out just what is different so we're tightening the range on sales guidance tightening that range. There as you can see we did not change the openings, we have changed the closures and youre going to hear why you're going to hear our.

Speaker Change: Little bit more often we also saw research. This was start Cana, formerly a N P D.

Speaker Change: Strategic approach to why we are looking at closures in fact for many conversations that we have with with with you over the years and knowing what our model looks like today post pandemic. We believe this is absolutely the right thing to do to kind of work towards getting our system healthier now the first brand to do this and have a bigger closure number that was originally.

Speaker Change: This research basically said this is how people are figuring out what to do and how to manage their check and you've heard it over and over again for many brands in the last few quarters, but they will go out less often they will eat smaller portions or order less expensive items. There was a comment made in this presentation.

40 to 60, we're not talking about 75 to 95, but again on our terms working with those franchisees looking at our quintile analysis and you'll hear US talk about all the inputs that went into this new number and these new expectation and then finally on EBITDA. There was an adjustment there that's been made down $281 million to $84 million.

Speaker Change: Basically said you know, we're seeing a lot more adult order kids meals.

Speaker Change: Right and as far as we can tell that's not the Olympic impact or anything like that it is really how I manage my check so maybe less add ons, maybe less maybe smaller portions, but we do see kids meals being offered more or ordered more with adults.

Speaker Change: That's where the state of the industry again I'd like to believe we are controlling everything we can control and have a good playbook with many initiatives in the works or initiatives when they hit and as they scale. We know what they can contribute to our business into our model the industry and the headwinds are real and and I'll step you through just what that looks like.

If you are a in a household with an income less than $50000 or even more impacted so many may assume we'll talk about all our household income which is higher than this obviously, but we do have a decent amount in our consumer and our target consumer base that do have a household income around 50000 or less than that so.

Speaker Change: And yet while we are still optimistic about the plans going forward you know this but the choppy economy and the issues that the American people.

Speaker Change: We know that frankly. This is this is where we are and again, we'll talk about what it is for Denny's household income and what is the target is or the consumer basis for key games. They are different but right now it's just worth knowing obviously that they the household income 50000 or less are the most impacted by the tough times personal savings all of the things we just mentioned.

Speaker Change: Are the things that are on everyone's mind right now that is not expected change in the near term. There is nothing that we see that suggest that slight improvement maybe post election, but there's not a lot of reason to think in the near term it won't continue to be choppy.

And this is just a reality family dining.

Speaker Change: These are some of the reasons why personal savings rates they are below where they were.

Speaker Change: <unk> segment, we're in even a kicking breakfast cafe, which isn't that new daytime cafe eatery, whatever you want to call. It is still tuck under family dining has separate segments, even though it's very different and theres been explosive growth in that kind of sub segment is still in family dining and what this would say is obviously family dining.

Speaker Change: In 2019, or they're below pre pandemic levels now that is impacting everyone, but especially the lower income households.

Speaker Change: With that I'll speak to in a in a moment food away from home continues to outpace food in grocery stores and when that happens there is an absolute real trade down that occurs and people say I can get that at the gross store make it myself versus going out and it's a delta I'm almost 3.4% just a little over 1% for grocery store inflation and.

Speaker Change: Has how did the worst post pandemic and has lost the most traffic, but everyone has lost traffic everyone. So there are things we look to to trying to understand not only is the playbook that we have are we doing the right things, but given this environment. What are the next steps that we take the shore up better strength in our business and so for us.

That if you went back 20 years of history. When you see that kind of dynamic happening you do see people that do the math, but with their feet and stay home a little bit more often we also saw research. This was start Cana, formerly a N P D.

Speaker Change: Knowing what's happening in the world. We look to this iconic brand speaking to keep speaking to Denny's first this iconic brand is still incredibly relevant and cultural conversations all the time, whether we pay for it or not whether we are you know encourage the conversation or not we are out there all the time and you'll see that from Patty when she covers a transformation happening in marketing.

Speaker Change: This research basically said this is how people are figuring out what to do and how to manage their check and you've heard it over and over again for many brands in the last few quarters, but they will go out less often they will eat smaller portions or order less expensive items. There was a comment made in this presentation.

Speaker Change: And what we've got to work with in terms of this iconic brand our new restaurants outperform significantly outperformed the average of the rest of our fleet and Youll see Steve talk about that that tells me. This is an iconic brand that's resilience because we opened a new restaurant its brand spanking, new it looks like Danny feels like Denny's, you've got that great amazing food those bright great breakfast.

Speaker Change: Basically said you know, we're seeing a lot more adults order kids meals.

Speaker Change: Right and as far as we can tell that's not the Olympic impact or anything like that it is really how I manage my check so maybe less add ons, maybe less maybe smaller portions, but we do see kids meals being offered more or ordered more with adults.

Speaker Change: You see that that's a resilient brand that still relevant today and there's still an icon we outperformed black box intelligence when is that kind of share game. When you see those kind of declines across every industry every segment of the industry rather.

Speaker Change: If you are a in a household with an income less than $50000 or even more impacted than so many may assume we'll talk about all our household income which is higher than this obviously, but we do have a decent amount in our consumer and our target consumer base that do have a household income around 50000 or less than that so.

We're still feeling share and it is a share game six out of the seven last.

Speaker Change: Quarters, we'd be casual dining in the casual dining index and that's what's very strong players and you know who they are and casual dining, but the weakness there and potentially the trade down that we got from casual dining and because we're running our own race and doing our own things, we consider that to be a win despite.

Speaker Change: We know that frankly. This is this is where we are and again, we'll talk about what it is for Denny's household income and what is the target is or the consumer bases for kiki's. They are different but right now it's just worth knowing obviously that they the household income 50000 or less are the most impacted by the tough times personal savings all of the things we just mentioned.

Speaker Change: Again, our traffic and our sales you have met him at scores and guest sentiment rather than scores continue to improve and I'll show you that quickly as we delve into the the Denny's brand. We've also had consistently solid same restaurant sales and so lots of smoothed out a bit for COVID-19 here kind of a wild looking graph coming off two very strong years and coming off of lapsed basically.

Speaker Change: And this is just a reality family dining. This is the segment we're in even a kicking breakfast cafe, which isn't that new daytime cafe eatery, whatever you want to call. It is still tucked under family dining sort of separate segments, even though it's very different and theres been explosive growth in that kind of sub segment is still in family dining and what this would say.

Speaker Change: Covid, there's still positive we plan and we showed you the tightening of the range and what we plan to do this year.

Speaker Change: And this is what we've been able to deliver over many many years in over a decade.

We now have two complementary complementary breakfast brands that are truly set up to create a long term really robust story and we're excited about that we are an asset light company. We're an asset light model, we generate significant cash flow, we'll talk about that throughout the day for Denny's. We have we have kept them separate for Denny we say, we'd love to feed people body mine.

Speaker Change: <unk> is obviously family dining.

Speaker Change: <unk> has had the worst post pandemic and has lost the most traffic, but everyone has lost traffic everyone. So there are things we look to to trying to understand not only is the playbook that we have are we doing the right things, but given this environment. What are the next steps that we take to shore up better strength in our business and so for us no way.

Speaker Change: And so that came from Harold Butler, who started denny's as Danny's Donuts and 1953, and there's a unique positioning and a unique there are unique stories for the Kiki's breakfast Cafe brand that we wanted to keep uniquely separate and so what you'll see is we take everything we can from a shared service perspective, or an enterprise perspective, keeping the craves.

Speaker Change: What's happening in the World, we look to this iconic brand speaking to keep speaking to Denny's first this iconic brand is still incredibly relevant and cultural conversations all the time, whether we pay for it or not whether we are you know encourage the conversation or not we are out there all the time and you'll see that from Patty when she covers a transformation happening in marketing and <unk>.

Speaker Change: Outages that are at the top of this graph the same but then when it gets to the brand if it touches the guests if it touches the employee they are uniquely different leverage where we can but also allow them to do their do their thing have their own playbooks speak to their own guests and I'll talk to you about the difference in those guests the vision for Denny's at this point road, if we're calling it the road to for her.

Speaker Change: What we've got to work with in terms of this iconic brand our new restaurants outperformed significantly outperformed the average of the rest of our fleet and you'll see Steve talk about that that tells me. This is an iconic brand that's resilience because we opened a new restaurant its brand spanking, new it looks like that he feels like then as you've got that great amazing food those bright great breakfast items.

Speaker Change: But it is about getting to a vs that are $2 $2 million over the next several years and we've got a roadmap that match exactly to how we will do that right, including closures and what that can do to lift the average and they improve the health of the portfolio.

Speaker Change: You see that that is a resilient brand that still relevant today and there's still an icon we outperformed black box intelligence when is that kind of share game. When you see those kind of declines across every industry every segment of the industry rather.

Speaker Change: So we'll talk about that Youll see I can't use them talk about Dave will talk about 40 million fresh starts for annually by 2030, so very clear distinct goals for the two brands and again leveraging shared services and the enterprise core focused for the Denny's brand Takeback breakfast reignite value leadership, we're doing that with 2468, and we see tons of room going forward.

Speaker Change: We're still stealing share and it is a share game six out of the seven last.

Speaker Change: Quarters, we'd be casual dining in the casual dining index and that's with some very strong players and you know who they are and casual dining, but the weakness there and potentially the trade down that we got from casual dining and because we're running our own race and doing our own things, we consider that to be a win despite.

Speaker Change: For our continued improvements there and then accelerating off premise growth as you've heard us talk about many times or the kidneys brand is strengthening the core and then its grow as Robert likes to say grow the fireeye to cookies. So we'll talk about that growth that explosive growth.

Speaker Change: Again, our traffic and our sales gets met them at scores guest sentiment rather scores continue to improve and I'll show you that quickly as we delve into the the Denny's brand. We've also had consistently solid same restaurant sales and so lots of smoothed out a bit for COVID-19 here kind of a wild looking graph coming off two very strong years and coming off of lapsed basically.

Speaker Change: For family dining Denny's is the number two player in the segments. We've contracted the most since Covid. That's that's a fact, we've contracted the most but we have one of the highest <unk> and some of that is due to the closures that have happened whether trade areas moves or theyre just simple the simple dynamics of the model haven't worked so for some of them.

Speaker Change: Covid, there's still positive we plan and we showed you the tightening of the range and what we plan to do this year.

Speaker Change: And this is what we've been able to deliver over many many years in over a decade.

Speaker Change: We now have to complement complementary breakfast brands that are truly set up to create a long term really robust story and we're excited about that we are an asset light company. We're an asset light model, we generate significant cash flow, we'll talk about that throughout the day for Denny's. We have we have kept them separate for Denny's, we say, we'd love to feed people body mine.

Speaker Change: Those things we are that we are that we know of we.

Speaker Change: We are controlling and doing those doing what we can to control that are our environments and control. What we are doing so there's still some really good things there in terms of the Denny's brand.

Family dining makes up 30% of full service restaurants. So you see all the players that are there and the size were ninth in full service restaurants.

Speaker Change: And so that came from Harold Butler, who started denny's as Danny's Donuts and 1953, and there's a unique positioning and a unique there are unique stories for the Kiki's breakfast Cafe brand that we wanted to keep uniquely separate and so what you'll see is we take everything we can from a shared service perspective, or an enterprise perspective, keeping the craves.

Speaker Change: And again, she can pick up a lot of space in that full in that family dining segment and 30% and then again I've mentioned this but three of the last the last three quarters have outpaced family dining, which has brands again like first watch and some of those a M eatery, a daytime cafes and it outpaced as of late and we've been outpacing casual dining for quite some time.

Speaker Change: Outages that are at the top of this graph the same but then when it gets to the brand if it touches the guests if it touches the employee they're uniquely different so leverage where we can but also allow them to do their do their thing have their own playbooks speak to their own guests and I'll talk to you about the difference in those guests the vision for Denny's at this point road, if we're calling it the road to for her.

Speaker Change: We're kiki's can see primarily located in Florida as we mentioned this is a franchise model also it's one of the reasons. We purchased this brand to leverage our world class franchise, our approach our approach in bringing them in was to leverage that leverage the different networks that we have with franchisees at Denny's, but then also to take this already franchise.

Speaker Change: But it is about getting to a vs that are $2 $2 million over the next several years and we've got a roadmap that match exactly to how we will do that right, including closures and what that can do to lift the average and they improve the health of the portfolio.

Speaker Change: Model and really grow it exponentially the daytime eatery category, you see Kiki sitting right there in the middle at 61, we've grown that already since we acquired it but this is limited service hours. This is really one day parts, there's huge growth in breakfast, that's continuing whether its some of these mom and pops.

Speaker Change: So we'll talk about that Youll see I can't use them talk about Dave will talk about 40 million fresh starts for annually by 2030, so very clear distinct goals for the two brands and again leveraging shared services and the enterprise core focused for the Denny's brand Takeback breakfast reignite value leadership, we're doing that with 2468, and we see tons of room going forward.

Speaker Change: And some of these independents that you see in this category, there's a huge opportunity to grow this and grow it exponentially while others. Those one off those independents are just not going to be able to do that.

Speaker Change: So the acquisition of cookies and insured has really created a lot of growth opportunities for us and we continue to be incredibly excited the unit economics are strong with this brand the growth potential is there again outside of one or two somewhat large players larger in the segment. The rest it's very very bifurcated very fragmented segment with the opportunity for this.

Speaker Change: For our continued improvements there and then accelerating off premise growth as you've heard us talk about many times or the Kiki's brand is strengthening the core and then its grow as Robert likes to say grow the fireeye to cookies. So we'll talk about that growth that explosive growth.

Speaker Change: For family dining Denny's is the number two player in the segments. We've contracted the most since Covid. That's that's a fact, we've contracted the most but we have one of the highest <unk> and some of that is due to the closures that have happened whether trade area has moved or they're just simple the simple dynamics of the model haven't worked so for some of them.

Speaker Change: To really lead to the top to leapfrog to the top so the growth potential is huge it's a new customer reach I'll show you that in the next couple of slides, meaning there's not a lot of overlap with the denny's and Kiki. So we didnt buy something that was exactly the same when we knew exactly what we were purchasing.

Speaker Change: Those things we are that we are that we know of we are controlling and doing those doing what we can to control that or our environment and control. What we are doing so theres still some really good things there in terms of the Denny's brand.

Speaker Change: And how we could leverage those locations and have a different real estate strategy a different growth strategy than denny's, all the while leveraging our enterprise.

Speaker Change: So to this this one is important we get asked a lot.

Speaker Change: Can it keep going to the same Denny side and vice versa. They are different brands and again, we were crystal clear on not doing this acquisition in terms of what we can do to leverage the portfolio leverage our franchise network both at Kiki's.

Speaker Change: Family dining makes up 30% of full service restaurants. So you see all the players that are there and the size of our ninth and full service restaurants.

Speaker Change: And again, she can pick up a lot of space in that fall in that family dining segment and 30% and then again I've mentioned this but three of the last the last three quarters have outpaced family dining, which has brands again like first watch and some of those a M eatery, a daytime cafes and it outpaced as of late and we've been outpacing casual dining for quite some time.

Speaker Change: And at Denny's going in and talking to the franchisees about growth.

Speaker Change: Average unit volumes are similar the day parts and the amount of hours opened are very dissimilar and one that's still primarily at 24 seven brand obviously and then one that's seven.

Speaker Change: The 232 very very different the household incomes are different 63000 is the average household income for Denny's and it goes up to 78004, a kiki's brands.

Speaker Change: We're kiki's can see primarily located in Florida as we mentioned this is a franchise model also it's one of the reasons. We purchased this brand to leverage our world class franchise or approach our approach in bringing them in was to leverage that leverage the different networks that we have with franchisees at Denny's, but then also to take this already franchise.

Speaker Change: And the checks are a little bit different you can see here off premise, Dave will call. This out when he speaks to you later today, but I'll promise was basically nonexistent or in the single mid single digits and has now grown to 16% just by turning on the website getting some online orders through and then starting to use third party aggregators to get in that business and there's other levers that you will see in addition to alcohol and the things here.

Speaker Change: Model and really grow it exponentially the daytime eatery category, you see Kiki sitting right there in the middle at 61, we've grown that already since we acquired it but this is limited service hours. This is really one day part theres huge growth in breakfast, that's continuing whether its some of these mom and pops.

Speaker Change: That can be pulled there not sediment youll see David talked about this so I won't steal his thunder, but its rarefied air in terms of what that brand has in the way of almost a cult like following.

Speaker Change: So it's a it's a complementary player. There's the guests income just shown a different way household income shown a different way and the overlap for Denny. This was this was done and this was researched thoroughly to make sure there wasn't too much overlap and 11% is very low in terms of guests that knew about or had been to a cheeky as in fact, we have one of our franchisees that is here Clyde broker has one of the.

Speaker Change: And somebody's independents that you see in this category, there's a huge opportunity to grow this and to grow it exponentially while others. Those one off those independents are just not going to be able to do that.

Speaker Change: So the acquisition of cookies and insured has really created a lot of growth opportunities for us and we continue to be incredibly excited the unit economics are strong with this brand the growth potential is there again outside of one or two somewhat large players larger in the segment. The rest it's very very bifurcated very fragmented segment with the opportunity for this.

Speaker Change: Has the Denny's and the same strip center that there is a key piece and there is no no concern there they've lived happily there for quite some time. So we know that that's a possibility again different real estate strategy youre doing in lines and in and strip malls and different locations, where kiki's Denny's is a different animal.

Speaker Change: To really lead to the top to leapfrog to the top so the growth potential is huge it's a new customer reach I'll show you that in the next couple of slides, meaning there's not a lot of overlap with the denny's and Kiki. So we didnt buy something that was exactly the same when we knew exactly what we were purchasing.

Speaker Change: So all of what we are doing will continue to be guided by the crave strategies that really work for both brands. So that work will continue and you'll see us all reference to crave framework capability, winning brands have craveable food they have great everyday value and they are a consistently good expect AR experience that they deliver to their guests. Both of these brands have the potential to do really incredible.

Speaker Change: And how we could leverage those locations and have a different real estate strategy a different growth strategy than denny's, all the while leveraging our enterprise.

Speaker Change: So to this this one is important we get asked a lot is does it kind of keeps going through the same Danny side and vice versa. They are different brands and again, we were crystal clear on not doing this acquisition in terms of what we can do to leverage the portfolio leverage our franchise network, both at <unk> and at Denny's going in and talking to the franchisees about growth.

Speaker Change: With this framework with this crave framework as the as.

Speaker Change: As the as the way forward.

Speaker Change: The key themes that you'll hear throughout the day is how we are going to grow our aav's I've talked a little bit about that there's a there's a closure that has the potential employers have a potential impact of that rather we'll talk about that but I'll also talk about the ways that will drive traffic and drive that growth.

Speaker Change: The average unit volumes are similar the day parts and the amount of hours opened are very dissimilar than one that's the most primarily at 24 seven brand obviously and then one that's seven to 232 very very different the household incomes are different 63000 is the average household income for denny's and it goes up to 78000.

Speaker Change: The margin growth in the restaurant growth you will see us get to net positive growth again for Denny's, which you havent seen from us in some time right you have not seen that in some time, and then cash flow and capital allocation, you'll hear that throughout what we're doing how we're leveraging our strong balance sheet and strong cash position to continue to allocate it to the things that will create the greatest shareholder return.

Speaker Change: For Ah Kiki's brands.

Speaker Change: And the checks are a little bit different you can see here off premise, Dave will call. This out when he speaks to you later today, but I'll promise was basically nonexistent or in the single mid single digits and has now grown to 16% just by turning on the website getting some online orders through and then starting to use third party aggregators to get in that business and there's other levers that you will see in addition to alcohol and the things here.

Speaker Change: Silver Danny's I'm going to kick this off and then I'll turn it over to the team is pretty quickly.

So this is the Denny's leadership team, Chris Bodie, our new he is our new president and COO, but he's back from my quick stents with CK, where he served as president of both the Hardee's Carl's Junior brands. He had been with Denny's for 11 years prior to that and then you've got just a tight small team. They wake up every day thinking about the Denny's brand.

Speaker Change: That could be pulled there not sediment youll see David talked about this so I won't steal his thunder, but its rarefied air in terms of what that brand has in the way of almost a cult like following.

I'll hit on just a couple of things that I've mentioned, but the improvements and so the guests may be thinking about their experiences differently or maybe trading down or maybe thinking about not going out and when they do go out it better be better it better be good and it better be improving the guest experience is critical and we are continuing to just make great strides in the guest experience at Denny.

Speaker Change: So it's a it's a complementary player. There's the guests income just shown a different way household income shown a different way and the overlap for Denny's. This was this was done and this was researched thoroughly to make sure there wasn't too much overlap and 11% is very low in terms of guests that knew about our eventual kiki's. In fact, we have one of our franchisees that is here quite rutger has one of the.

Speaker Change: Way outperforming family dining and casual dining many times so the industry as a whole has a 27 and denny's where they are today, it's a testament to our franchisees and leveraging the tools that we have that can help them to improve these Google ratings at a denny's. A 4.3 is also pretty incredible. This as this thing that happens when you say I'd like to go to a denny's.

Speaker Change: Denny's and the same strip centers that there is a key piece and there is no concern there they've lived happily there for quite some time. So we know that that's a possibility again different real estate strategy youre doing in lines and in and strip malls and different locations for Kiki's Denny's is a different animal.

Speaker Change: On the street in theory will tell you what the Google rating is right. So these things matter. These improvements matter and it makes a big difference for us. So we're going to continue to double down on that guest experience, our achilles' heel where to focus on with all of our franchisees' focus on the variability that exists between restaurants, we know that that's the opportunity when we have 600 restaurants, we have to.

Speaker Change: So all of what we are doing will continue to be guided by the crave strategies that really worked for both brands. So that work will continue and you'll see us all reference to crave framework capability, winning brands of craveable food they have great everyday value and they are a consistently good expect AR experience that they deliver to their guests. Both of these brands have the potential to do really incredible.

Speaker Change: Over 200 franchisees. Our goal is to continue to focus on that variability where it is top to bottom. We do have a I would say are not a silver bullet, but a really strong we have a way of indicating and showing our franchisees. If you do this this will happen and what you see there is primary primary learning system planned completion is.

Speaker Change: With this framework with this crave framework as the as.

Speaker Change: As the as the way forward.

Speaker Change: The key themes that you'll hear throughout the day is how we are going to grow our aav's I've talked a little bit about that there's a there's a closure that has the potential closures have a potential impact of that rather we'll talk about that but I'll also talk about the ways that will drive traffic and drive that growth.

Speaker Change: Our system called ignite that's our learning management system when that is use the higher the completion rate of the system that we provide to our franchisees on the dental side the higher that is and those this is three different case studies on three different franchisees when they use the tools when they use the training materials, we see improvements in that sentiment and we also see improvements in sales and traffic.

Speaker Change: The margin growth in the restaurant growth you will see us get to net positive growth again for Denny's, which you havent seen from us in some time right you have not seen that in some time, and then cash flow and capital allocation, you'll hear that throughout what we're doing how we're leveraging our strong balance sheet and strong cash position to continue to allocate it to the things that will create the greatest shareholder return.

And these are again pre and post and over many years that we've been watching this when we talk to our franchisees like we just did our big annual convention, we're showing them the power of using the tools that they have and leveraging those tools.

Silver: Silver Denny's I'm going to kick this off and then I'll turn it over to the team is pretty quickly.

Silver: So this is the Denny's leadership team, Chris Bodie, our new president He's our new President and C O L. But he's back from my quick stent with CK, where he served as president of both the Hardee's Carl's Junior brands. He had been with Denny's for 11 years prior to that and then you've got just a tight small team they wake up everyday thinking about the Denny's brand.

Speaker Change: We've made improvements you've heard us talk about this didn't want to miss the opportunity to talk about our kitchen optimization or modernization program that happened a couple of years ago. When I joined it was just at the tail end of implementation. It has made a difference we are using this for over 50% of our menu goes through either our ovens are used with our or we are leveraging our formalized or the equipment that came.

Silver: I'll hit on just a couple of things that I've mentioned, but the improvements and so the guests may be thinking about their experiences differently or maybe trading down or maybe thinking about not going out and when they do go out it better be better it better be good and it better be improving the guest experience is critical and we are continuing to just make great strides in the guest experience at Denny's.

Speaker Change: With this package, we have seen improved scores on bacon on sausage things that go through that oven and even new innovation like the leash waffles came through that of it. So we think about innovation going forward the investment that our franchisees made and that equipment is absolutely paying off we see lower waste, we actually see efficiencies in the back of the house as well.

Way outperforming family dining and casual dining many times so the industry as a whole is 27 and denny's where they are today, it's a testament to our franchisees and leveraging the tools that we have that can help them to improve these Google ratings at a denny's over four three is also pretty incredible. This as this thing that happens when you say I'd like to go to a denny's.

Speaker Change: And then you'll hear us not too much today, but you've heard us on earnings call. We'll talk about the investments we're making in technology is the only thing you'll see us talk about here today. So we can get to the remodel program and some other things that are related to driving that driving and getting the flywheel, turning but we do have.

Silver: On the street in theory will tell you what the Google rating is right. So these things matter. These improvements matter and it makes a big difference for us. So we're going to continue to double down on that guest experience, our achilles' heel with a focus on with all of our franchisees' focus on the variability that exists between restaurants, we know that that's the opportunity when we have 1600 restaurants, we have two <unk>.

The launch of venial coming whereabouts and ready to go with that been in the works for some time and that has a great return also we know we can see savings and improved waste increased table turns with KBS screens kitchen video display screens than in some cases, our franchisees don't have so this enables a whole new way of implementing.

Over 200 franchisees. Our goal is to continue to focus on that variability where it is top to bottom. We do have a I would say are not a silver bullet, but a really strong we have a way of indicating and showing our franchisees. If you do this this will happen and what you see there is primary primary learning system planned completion and it's a.

Speaker Change: Oh or getting food out it it allows us to do a whole lot of different things that will improve.

Speaker Change: And it enables a.

Speaker Change: Is that my timer, but and it enables our it enables a better service model going forward potentially food runners and beverage Ron or things that will simplify operations going forward. We have more investments to go you'll hear Patty you talk about product quality value leadership with 2468, I've already mentioned, but youre going to see us lean heavily into that because we know the power of that platform for us and it's a huge.

Silver: System called Ignite is our learning management system when that is use the higher the completion rate of the system that we provide to our franchisees on the denim side. The higher that is in those this is three different case studies on three different franchisees when they use the tools when they use the training materials, we see improvements in that sentiment and we also see improvements in sales and traffic.

Speaker Change: Equity, we're not chasing someone else's equity on three for whatever we have our own unique equity there, we'll talk about off premise and the strategy will also talk about Remodels and diner 2.0, and then we'll talk about portfolio optimization, so you're really clear on that closure number and why we're looking at it the way we are and why that's a strategic approach to the situation we have today and then.

Silver: And these are again pre and post and over many years that we've been watching this when we talk to our franchisees like we just did our big annual convention, we're showing them the power of using the tools that they have and leveraging those tools.

Speaker Change: Propel long term growth for us.

Silver: We've made improvements you've heard us talk about this it didn't want to miss the opportunity to talk about our kitchen optimization or modernization program that happened a couple of years ago. When I joined it was just at the tail end of implementation. It has made a difference we are using this for over 50% of our menu goes through either our ovens are used with our or we are leveraging our re thermalize or the equipment that came.

Speaker Change: So with that I'm going to turn it over to Patty Trevino I mentioned, she's our chief brand officer with amazing background She's hit the ground running unless you listen to Patty next thank you.

Speaker Change: Yeah.

Patty Trevino: Good morning, everyone.

Patty Trevino: I know, it's more I think that timer is stressful Mike looking if you guys see that's my countdown. So so thanks, so much for being here this morning.

Silver: With this package, we have seen improved scores on bacon on sausage things that go through that oven and even new innovation like the leash waffles came through that of it. So we think about innovation going forward the investment that our franchisees made and that equipment is absolutely paying off we see lower waste, we actually see efficiencies in the back of the house as well.

Patty Trevino: Ali said my name is how do you think I mean young excited to join the Denny's team. After I think 25 years in the restaurant industry.

Patty Trevino: I've worked at brands like Burger, King and boom in brands and I've, even gotten to work with some of the current leadership team in those brands, but excited to be here with Denny's and just focus a little bit on what we're gonna be talking today, and Kelly shared the crave strategy and I'm going to be focused on the E does anybody remember what they eat.

Silver: And then you'll hear us not too much today, but you've heard us on earnings call. We'll talk about the investments we're making in technology is the only thing you will see us talk about here today. So we can get to the remodel program and some other things that.

Silver: That are related to driving that driving and getting the flywheel, turning but we do have the the launch of venial coming whereabouts and ready to go with that been in the works for some time and that has a great return also we know we can see savings and improved waste increase table turns with KBS screens kitchen video display screens than in <unk>.

Elevating traffic so I'll be talking about how we're going to actually focus on our brand strength to elevate traffic and that's through frequency right. Our current base like how do we drive frequency of those guests that are coming to our new location today and then how do we expand that best base gas of course, that's we're all fighting for that trial.

Silver: Some cases, our franchisees don't have so this enables a whole new way of implementing our or of getting food out. It. It allows us to do a whole lot of different things that will improve.

Patty Trevino: So leaning into our strategy our strength right as Denny's is we've got to make sure that we look at how are we going to increase our average visit from two two to two five that will give us that road to 400 pool right. How do we get that 400000.

Silver: And it enables a.

Speaker Change: It was like is that my time or is it <unk>.

Speaker Change: And it enables our it enables a better service model going forward potentially food runners in beverage on are things that will simplify operations going forward. We have more investments to go you'll hear Patty you talk about product quality value leadership with 2468, I've already mentioned, but you're going to see us lean heavily into that because we know the power of that platform for us and it's a unique equity we're not chasing someone elses.

Patty Trevino: Focusing on our strengths.

Patty Trevino: Winning key use occasions and engaging the next generation of D body, that's basically the formula.

Patty Trevino: So.

Speaker Change: Kelly you talked about this as well as like we are a relevant brand. We've talked we you know we are part of relevant conversations and not only do we have these wonderful celebrities people, but we also are relevant and major headlines right. We are or any major headlines whether it's no videos founder story to our surprise Blink 182 concert.

Speaker Change: Equity on three for whatever we have our own unique equity there, we'll talk about off premise and the strategy will also talk about Remodels and diner 2.0, and then we'll talk about portfolio optimization, so you're really clear on that closure number and why we're looking at it the way we are and why that's a strategic approach to the situation. We have today and it will propel long term growth for us.

Speaker Change: At both of course at Denny's. The brand is part of culture today, which again is a strength that we have that others do not have.

Speaker Change: So with that I'm going to turn it over to Patty Trevino I mentioned, she's our Chief brand officer with Amazing background. She has hit the ground running I'll, let Susan to Patty next thank you.

Speaker Change: So leveraging our.

Speaker Change: Headlines.

Speaker Change: It really is about us embracing that we our America's diner or today's America. We're the only people that is open for all I'll talk a little bit about our consumer and who we speak to are always there for you hospitality were opened 24 oven whenever you're craving, our delicious pancakes through there for you.

Patty Trevino: Good morning, everyone.

Patty Trevino: I know, it's more I think that timer is stressful Mike looking if you guys see that's my count down. So so thanks, so much for being here this morning.

Patty Trevino: As Kelly said my name is Patty Praveen young excited to join the Denny's team. After I think 25 years in the restaurant industry I've worked at brands like Burger King and boom in brands and I've, even gotten to work with some of the current leadership team in those brands, but excited to be here with Denny's and just.

Speaker Change: And generational Spanish spanning memory maker I'll also talk a little bit about different generations that go to denny's.

Speaker Change: And we have strength across those types of generations.

Speaker Change: So I'm going to share a little video on you know and talk a little bit about how we are part of culture and a little bit about our guest today.

Patty Trevino: Focus a little bit on what we're gonna be talking today, and Kelly shared the crave strategy and I'm going to be focused on the E does anybody remember with the east.

Patty Trevino: Elevating traffic so I'll be talking about how we're going to actually focus on our brand strength to elevate traffic and that's through frequency right. Our current base like how do we drive frequency of those guests that are coming to our locations today and then how do we expand that best base gas of course, that's we're all fighting for that traffic.

Speaker Change: Yeah.

Yeah.

Patty Trevino: So leaning into our strategy our strength right as Denny's is we've got to make sure that we look at how are we going to increase our average visits from two two to two five that will give us that road to 400 cool right how do we get that 400000.

Patty Trevino: Focusing on our strengths.

Patty Trevino: Winning key use occasions and engaging the next generation of D body, that's basically the formula.

Patty Trevino: So <unk>.

Speaker Change: Kelly you talked about this as well as like we are a relevant brand we've taught.

Speaker Change: Part of relevant conversations and not only do we have these wonderful celebrities people, but we also are relevant and major headlines right. We are or any major headlines whether it's no videos founder story to our surprise Blink 182 concert at both of course at Denny's The brand is part.

And for those you of you on the webcast I apologize, we werent able to show that video publicly but you'll get to see the other video shows you saw blank screen.

Speaker Change: Ian or didn't hear anything again this was a video that we only showed here internally.

Speaker Change: So showed a video where part of culture. So for US It really is about making sure that our strategies are built on guest insights right understanding who do we Sir Mike who our guest is where do we play.

Speaker Change: Our culture today, which again is a strength that we have that others do not have.

Speaker Change: So leveraging our.

Speaker Change: Headlines it really is about us embracing that we our America's diner or today's America. We're the only people that is open for all I'll talk a little bit about our consumer and who we speak to are always there for you hospitality work opened 24, seven so whenever you're crazy.

Speaker Change: And how we win.

Speaker Change: So who.

Speaker Change: Who we serve and this is what I was talking a little bit about a BARDA occurring gas. Our current guests are multi generational I've been with brands before and I'm sure you've heard of other brands, where the highly highly over indexed in the baby Boomer and generation X and as you can see our actual guest profile breach has not only baby boomers.

Speaker Change: Our delicious pancakes, they're there for you.

Speaker Change: And generational spanning spanning memory maker I'll also talk a little bit about different generations that go to denny's and we have strength across those types of generations.

Generation X a stronghold with millennials and even generation Z. So this is actually a huge strength for this brand.

Speaker Change: Ethnicity.

Speaker Change: So I'm not sure a little video on you know and talk a little bit about how we are part of culture and a little bit about our guests today.

Speaker Change: Another one to the east typically see you know you'll see kind of one but we have a great not only with.

The Black and African American consumer, but very strong only over a third of our guests are Hispanic or Latino, which is again really great as we know that the generation and the.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Ethnicity is growing in.

Speaker Change: In America, and the United States.

So again this is who we serve where we play so knowing that we are speaking to a very highly diversified group, we have an opportunity again to be part of our culture.

Speaker Change: So the next one is where are we going to play three things one breakfast. We went at breakfast, we have to gain our food breakfast food leadership.

Speaker Change: Value, which recently introduced the 2468 value menu.

Speaker Change: And then three off premise I'm going to go a little bit deeper into kind of these areas and what we've been doing so I'll start off with breakfast first.

Speaker Change: When we think about breakfast and we think about the food. There are three things that we're going to focus on and that we've been focused on the first is core menu optimization.

Speaker Change: And for those of you on the webcast I apologize, we weren't able to show that video publicly but you'll get to see the other video shows you saw blank screen.

Speaker Change: Everybody loves to talk about the right side of this slide are the is it.

Speaker Change: Left side of the slide where it says new innovation everybody talks about like Oh, we're going to do that and we're introducing us.

Speaker Change: Or didn't hear anything again this was a video that we only showed here internally.

Speaker Change: I'm, a big believer that you have to invest in your core menu and making sure that you have your core menu is working extremely hard for you because that's where your sales and profit right.

Speaker Change: So show the video where part of culture. So for US It really is about making sure that our strategies are built on guest insights right understanding who do we serve like who our guest is where do we play.

Speaker Change: Right. So core menu optimization is making sure that we are focused on the right things, making sure that the mix of strong making sure that the margins work extremely well.

Speaker Change: And how we win.

So.

Speaker Change: Who we serve and this is what I was talking a little bit about a BARDA occurring gas. Our current guests are multi generational I've been with brands before and I'm sure you've heard of other brands, where they highly highly over indexed in the baby Boomer and generation X and as you can see our actual guest profile reach has not only baby boomer.

Speaker Change: That is a whole. So we currently have a study that's being done we're going to get the report out in the next probably week or two.

But that will lead us into making sure that we have a very very strong for many.

Speaker Change: Next one is quality investment is not just about saving saving pennies and removing costs. It's about how do we take some of those pennies that we're saving and reinvesting in the quality of our food.

Speaker Change: Generation X a strong hold with millennials and even generation Z. So this is actually a huge strength for this brand.

Speaker Change: And a third of innovation of course, we got a half from the news regarding has to me is to get people excited to come in try. So we are working across these three things, but we can focus on one without focusing on the two other it all works together.

Speaker Change: Ethnicity.

Speaker Change: Another one to the east typically see you know you'll see kind of one but we have a great not only with the black and African American consumer, but very strong only over a third of our guests are Hispanic or Latino, which is again really great as we know that the generation and the ethnicity is growing.

Speaker Change: So some of the things that we've actually done like I said the menu optimization study. We're currently under under study and we're going to get the results in the next couple of weeks.

Speaker Change: Improved bacon, we invested about $8 million in the improvement in quality of our Bacon and that recently went into effect earlier this year.

Speaker Change: In America, and the United States. So again this is who we serve where we play so knowing that we are speaking to a very highly diversified group, we have an opportunity again to be part of culture.

We also introduced from our new innovation perspective, Strawberry stuffed French toast, which has been doing extremely well for us.

Speaker Change: And then I also wanted to give a little bit of props to our virtual brands like bandit burrito.

Speaker Change: So the next one is where are we going to play three things one breakfast. We went at breakfast, we have to gain our food our breakfast food leadership.

Speaker Change: We introduced and been doing some ideation for that brand, but with kind of a lot of excitement about this grand Slam burrito that we're gonna be testing.

Second value, we recently introduced the 2468 value menu.

Speaker Change: Hopefully see it on the menu soon so again, a balanced of menu optimization improving our products.

Speaker Change: And then three off premise I'm going to go a little bit deeper into kind of these areas and what we've been doing so I'll start off with breakfast first.

Speaker Change: And some new innovation there.

Speaker Change: When we think about breakfast and we think about the food. There are three things that we're going to focus on and that we've been focused on the first is core menu optimization.

Speaker Change: The next that I wanted to speak about his value right. We talked about the I'm sure everyone has seen a barbell strategy before and.

Speaker Change: I'm not going to free present this to you because I'm just again, you've probably heard many many people speak about barbell, but I did want to highlight one thing.

Speaker Change: Everybody loves to talk about the right side of this slide are the is it no.

Speaker Change: Left side of the slide where it says new innovation and everybody talks about like Oh, we're going to do this and we're introducing that.

Speaker Change: It's in the barbell strategy the relationship the pricing relationship between the value side and the alcohol side has to be extremely strong because it breaks it doesn't work. So we have to make sure that people that come in for a value that there's an upsell that's not so expensive that they will just stay in the <unk>.

Speaker Change: I'm, a big believer that you have to invest in your core menu and making sure that you have your core menu is working extremely hard for you because that's where your sales and profit right.

Speaker Change: Right. So core menu optimization is making sure that we are focused on the right things, making sure that the mix is strong making sure that the margins work extremely well.

Speaker Change: So for us working with the finance team and making sure that our barbell strategy has some great products, but at the same time the pricing relationship.

So that is a wholesale we currently have a study that's being done we're going to get the report out in the next probably week or two but.

Speaker Change: But that will lead us into making sure that we have a very very strong for money.

Speaker Change: He said well if it works as well.

Speaker Change: So not too much on this.

Speaker Change: Next one is quality investment is not just about saving saving pennies and removing costs. It's about how do we take some of those pennies that we're saving and reinvesting in the quality of our food.

Speaker Change: I'll talk a little bit of part 2468 value.

Speaker Change: Launch this in late August and we kicked it off with a really great partner. His name was BEETLEJUICE. So with OSM partnership that we had and that we currently have and we will see through the end of this month, but with that I'll do a little commercial and then after a couple of commercials that will show I'll talk a little bit about what we've seen from our results.

Speaker Change: And a third of innovation of course, we've got to have me news. We got to you have to me is to get people excited to come in try. So we are working across these three things, but we can focus on one without focusing on the few other it all works together.

Speaker Change: Active on what guests are saying so.

Speaker Change: So some of the things that we've actually done like I said the menu optimization study. We're currently under under study and we're going to get the results in the next couple of weeks.

Speaker Change: So let's go ahead.

Speaker Change: The 2468 value menu was back when the afterlife fuel you saw with deals to drive.

Speaker Change: Improve bacon, we invested about $8 million in the improvement in quality of our Bacon and that recently went into effect earlier this year.

Speaker Change: Everyday value slam and so much more the 2468 value menu.

Speaker Change: We also introduced from our new innovation perspective, Strawberry stuffed French toast, which has been doing extremely well for us.

Speaker Change: <unk> now.

Speaker Change: And then I also wanted to give a little bit of props to our virtual brands like bandit Burrito, we introduced and been doing some ideation for that brand, but we've kind of a lot of excitement about this grand Slam burrito that we're gonna be testing.

Speaker Change: So the next one.

Speaker Change: Okay.

[music] procedure volume this year.

Speaker Change: Hopefully see it on the menu soon so again, a balanced of menu optimization improving our products.

Speaker Change: The new two forces.

Speaker Change: When we did.

And some new innovation there.

Speaker Change: The next that I wanted to speak about his value right. We talked about I'm sure everyone has seen a barbell strategy before and I'm not going to have free present. This to you because I'm just again, you've probably heard many many people speak about barbell, but I did want to highlight one thing.

Speaker Change: Right.

Speaker Change: Making sure people virtually are catching up to us.

Speaker Change: So great ads again, the beetle juice.

Promotion went extremely well and that we really leaned not only into the 2468 menu, but also in restaurant at the other side of the barbell strategy, which is more premium and those products actually performed and are continue to perform really strongly for us.

Speaker Change: Is in the barbell strategy the relationship the pricing relationship between the value side and the upsell side has to be extremely strong because it breaks it doesn't work. So we have to make sure that people that come in for a value that there's an upsell that's not so expensive that they will just stay in there.

Speaker Change: And then you know the next one.

Speaker Change: Well that was second wanted to talk a little bit about what our fans are same so from a 2468 and from fan, they're very they're saying really great thing by <unk>.

Speaker Change: Value so for us working with the finance team and making sure that our barbell strategy has some great products, but at the same time the pricing relationship.

Speaker Change: Glad its back the deals look delicious 2468 is calling me so not only we have got a great partnership to kick this promotion up but were getting some really great very feedback from fans in the restaurant and on social media.

Well, if it works as well.

Speaker Change: So not too much on this.

Speaker Change: I'll talk a little bit of part 2468 value.

Speaker Change: Launch this in late August and we kicked it off with a really great partner. His name was BEETLEJUICE. So with OSM partnership that we had and that we currently have and we will see through the end of this month, but with that I'll do a little commercial and then after a couple of commercials that will show I'll talk a little bit about what we've seen from our results.

Speaker Change: And the results, we're seeing about a two to two 5% sales lift.

Speaker Change: From the 2468 and this is a combination of not only what the actual value menu, but the in restaurant betelgeuse promotional menu. So really good results for us and one area that I did want to specify is California. So, California is a huge huge contributor to our business in California has actually seen stronger result.

Speaker Change: Effective on what guests are saying so let's go ahead.

Speaker Change: 2468 value menu as fast as the afterlife fuel you saw would you.

Speaker Change: Mike the everyday value slam and so much more the 2468 value menu.

Speaker Change: And we've seen system wide, so very excited about the market performance and Los Angeles, and some of our California markets, but.

Speaker Change: <unk> now.

Speaker Change: I'm very extremely proud that we've actually kept them you see in these results. Despite the industry headwinds like you go out there you're seeing what's happening in the market. So good performance despite our headwinds.

Speaker Change: [music] procedural volume this year.

Speaker Change: So the next area that I wanted to talk about is off premise.

Speaker Change: Thanks, Albumin and <unk>.

Speaker Change: This is not a new business.

Speaker Change: But this is an opportunity for this brand.

Speaker Change: This is a common theme that I wanted to talk a little bit about the denny's brand.

Speaker Change: Alright, just.

Speaker Change: Making sure people virtually are catching up to us [noise] alright, so great adds again the beetle juice.

Speaker Change: And I'll pause before I jump into the detailed is who.

Speaker Change: I joined the Denny's brand because it is a brand that's just ready to be unleashed. There are so many strengths that we just have the power to unleash this brand and this is one area.

Speaker Change: Promotion went extremely well.

That we really leaned in not only into the 2468 menu, but also in restaurant as the other side of the barbell strategy, which was more premium and those products actually performed and are continue to perform really strongly for us.

Speaker Change: Two of these areas that we're going to lean into for off premise growth as our first party channels is our website actually working extremely well and as our App doing due diligence now and we've got to invest and make sure that they are the.

Speaker Change: Then you know the next one.

Speaker Change: Hold on one second I wanted to talk a little bit about what our fans are same so from a 2468 from fan, they're very they're saying really great things like <unk>.

Speaker Change: The other area of opportunity is third party marketplaces.

Speaker Change: And all of you who knows by door Dash all of that wonderful stuff is making sure that we continue to support and promote and partner with them because we know that when we lean into our partnership it really does drive visits so our first party channel third party channels is the way that we're going to actually accelerate our off premise.

Speaker Change: Glad its back the deals don't look delicious 2468 is calling me so not only we have got a great partnership to kick this promotion up but were getting some really great very feedback from fans in the restaurant and on social media.

So why why is it important for denny's.

Speaker Change: Her Kelly talk a little bit about this but the digital guests have a higher lifetime value. They actually visit three and a half times versus a one and a half times.

Speaker Change: And the results. So we're seeing about a two to two 5% sales lift from.

Speaker Change: From the 2468 and this is a combination of not only what the actual value menu, but the in restaurant betelgeuse promotional menu. So really good results for us and one area that I did want to specify as California. So, California is a huge huge contributor to our business in California has actually seen stronger result.

Speaker Change: So.

Speaker Change: Great Great strong Hyatt lifetime value for us, it's an investment the.

Speaker Change: The next one is the first party right people that order through Denny's dotcom, our App and a third party occasions people that are ordering from door dash in Uber eats.

Speaker Change: Only overlap 1% not that top line that you see so there's little overlap between gas that are coming directly to our channel versus the third party channel.

Speaker Change: And then we've seen system wide. So very excited about the market performance and Los Angeles, and some of our California markets, but.

Speaker Change: And then digital channels enabled us to get to meet our guests and more occasions rates, especially the late night business.

Speaker Change: I'm very extremely proud that we've actually kept them you see in these results. Despite the industry headwinds like you go out there you're seeing what's happening in the market. So grip performance despite our headwinds.

Speaker Change: When you're in you know at home you're hungry. These third party off premise channels give us an opportunity to meet them at their occasion needs.

Speaker Change: And the other areas pay digital channels. This makes it more effective so when you think about banner ads and they are clicking directly to order. It makes our paid media more efficient. So it makes our paid digital channels more effective for us. So it's really pretty great. So focusing on a growth digital and off premise sales from our high time value.

Speaker Change: So the next area that I wanted to talk about is off premise.

Speaker Change: This is not a new business.

Speaker Change: But this is an opportunity for this brand and this is a common theme that I wanted to talk a little bit about the denny's brand.

Speaker Change: And I'll pause before I jump into the detail is well.

Speaker Change: I joined the Denny's brand because it is a brand that's just ready to be unleashed. There. So many strings that we just have the power to unleash this brand and this is one area.

Speaker Change: Little overlap late night business, and making our our digital channels are pages houseware efficient.

Speaker Change: It's a huge huge strength and opportunity for us.

Two of these areas that we're going to lean into for off premise growth as our first party channels is our website actually working extremely well and as our app doing its due diligence now and we've got to invest and make sure that they are the.

Speaker Change: So let's talk more about the virtual brands right. We introduced banded burrito earlier this year, we've had the meltdown in burger than lives.

Speaker Change: Since contribution today. This is Q3 were about $77 million of sales contribution growth since 2022 is up 15%.

Speaker Change: The other area of opportunity is third party marketplaces.

Speaker Change: And all of you who know us by door Dash all of that wonderful stuff is making sure that we continue to support and promote and partner with them because we know that when we lean into our partnership it really does drive visits so our first party channel third party channels is a way that we're going to actually accelerate our off premise.

Speaker Change: And traffic during dinner and late night is over 65%. So like I said. This is meeting also a need that is specific to a different consumer occasion.

Speaker Change: And last is Theres little guest overlap with Denny's. So we are serving a different consumer in a different need state.

Speaker Change: So why why is it important for Denny's a.

Speaker Change: Her Kelly talk a little bit about this but the digital guests have a higher lifetime value. They actually visit three and a half times versus a one and a half time.

Speaker Change: The Burger then meltdown banner Brito Theres still absolutely more that we expect to see from these brands.

Speaker Change: So.

Speaker Change: Great Great strong height, a lifetime value for us it's an investment.

Speaker Change: And this is again a marketing focus for us.

Speaker Change: So last right I talked about breakfast, we talked about value, we talked about the off premise opportunity, but there's also areas that I wanted to talk a little bit about unlocking the power of this brand like how are we going to win one of them is owning our brand positioning.

Speaker Change: The next one is the first party right people that order through Denny's dotcom, our App and a third party occasions people that are ordering from door dash and Uber eats only overlap 1% not that top one that you see so theres little overlap between gas that are coming directly to our channel versus a third party channels.

Speaker Change: It's optimizing our media support and third is personalization through CRM and loyalty.

And then digital channels enabled us to get to meet our guests and more occasions, right, so, especially the late night business.

Speaker Change: So first our brand positioning embracing America's diner.

Speaker Change: When you're in you know at home you're hungry. These third party off premise channels give us an opportunity to meet them at their occasion needs.

We own this and we're the only brand out there they can own that.

Speaker Change: We I I work at brands before just struggled with relevance right. It's kind of like one of those things that they are relevant either smaller audience.

Speaker Change: And the other area is paid digital channels. This makes it more effective so when you think about banner ads and they're clicking directly to order. It makes our paid media more efficient. So it makes our paid digital channels more effective for us. So it's really Brady great. So focusing on a growth digital and off premise sales from our high time value.

Speaker Change: We don't have that problem, where relevant to multi generational where relevant to different ethnicities.

Speaker Change: And for US this is an opportunity to redefine and embrace America's diner for today's America.

Speaker Change: Little overlap late night business, and making our our digital channels, our pagers to house more efficient is a huge huge strength and opportunity for us.

Speaker Change: So.

Speaker Change: The way that we're going to lean into it as reintroducing and looking at a new brand campaign that will come to life and different touch points.

Speaker Change: So let's talk more about the virtual brands right. We introduced banded burrito earlier. This year, we've had the meltdown in Burger Dan lives. So since contribution today. This is Q3 were about $77 million of sales contribution growth since 2022 was up 15%.

Speaker Change: So our T V. Our ads our loyalty program, so again more to come in this area.

Speaker Change: Next is how we're going to win.

Speaker Change: Leveraging our marketing co op opportunity.

Speaker Change: This past year, 85% of the system opted.

Speaker Change: Opted in to a co op we.

Speaker Change: And traffic during dinner and late night is over 65%. So like I said. This is meeting also a need that is specific to a different consumer occasion.

Speaker Change: We had 54 co ops 1100 restaurants participated.

16, co ops reactivated through 2023.

Speaker Change: And some of those costs were our largest clubs coming it's one specific one with Los Angeles.

Speaker Change: And last is there's little guest overlap with Denny's. So we are serving a different consumer in a different need states. So the Burger then meltdown vendor Brito Theres still absolutely war that we expect to see from these brands.

Speaker Change: So great great win from that side.

Speaker Change: The biggest biggest takeaway from this is the contribution from the co op increase our actual media spend to eight point.

Speaker Change: $8 $6 million.

Speaker Change: And this is again a marketing focus for us.

Speaker Change: So co ops grew.

Speaker Change: Great investment from the franchisees. So thank you franchisees and you're listening and those that are here. Thank you for supporting the cough and investing in those.

Speaker Change: So last right I talked about breakfast, we talked about value, we talked about the off premise opportunities, but there's also areas that I wanted to talk a little bit about unlocking the power of this brand and like how are we going to win one of them is owning our brand positioning.

Speaker Change: But there's more to do and we will continue working with our franchisees to make sure that the co ops work effectively.

Speaker Change: And we continue to build awareness of this brand.

Speaker Change: And as optimizing our media support and third is personalization through CRM and loyalty.

Speaker Change: Last one is personalization through CRM.

Speaker Change: So first our brand positioning embracing America's diner.

Speaker Change: I probably is this actual data from us, sometimes theyre, a little but theyre still relevant to.

Speaker Change: We own this and we're the only brand out there they can own it.

So 72% of consumers only engage with personalized messages.

Speaker Change: We I I work at brands before just struggled with relevant right.

Speaker Change: 81% of consumers want brands to understand them, better and know when and how to approach them.

Kind of like one of those things that they're relevant either smaller audience.

Speaker Change: Back in the day, we were lucky enough to just send an email and everybody just opened it up and was excited to get like a 10% or a free soap or something not anymore.

Speaker Change: We don't have that problem, where relevant to multi generational where relevant to different ethnicities.

Speaker Change: What I'm going to send to you and to you and to you is going to be different based on your needs.

Speaker Change: And for US this is an opportunity to redefine and embrace America's diner for today's America.

Speaker Change: Some of you may be parents, who may want something from kit for their kids. Some of you may not want a tree his name because youre not apparent.

Speaker Change: So.

Speaker Change: The way that we're going to lean into it reintroducing and looking at a new brand campaign that will come to life and different touch points.

Speaker Change: So that's the opportunity for us today.

Speaker Change: So identifying the guest understanding what they want from us and then engaging and giving them what they want.

Speaker Change: So our T V. Our ads our loyalty program, so again more to come in this area.

Speaker Change: Is the way that we're going to lean into driving and strengthening our loyalty and CRM program. So.

Speaker Change: Next is how we're going to win.

Speaker Change: Leveraging our marketing co op opportunity.

Speaker Change: This is our current program.

Speaker Change: This past year, 85% of the system opted.

Speaker Change: Right.

Speaker Change: A cookie cutter program everybody gets the same offer.

Speaker Change: Opted in to a co op we.

Speaker Change: We had 54 co ops 1100 restaurants participated.

Speaker Change: And right now we've got about 5 million active members, which is great.

Speaker Change: 16, co ops reactivated through 2023.

Speaker Change: So no personalization and where we want to get to is <unk>.

Speaker Change: And some of those costs were our largest clubs coming one specific one with Los Angeles.

Speaker Change: Introducing them a new program second half of next year that is that we leverage data for offer personalization.

Speaker Change: So great great win from that side.

Speaker Change: The biggest biggest takeaway from this is the contribution from the co op increase our actual media spend to eight point fix by $8 $6 million.

Speaker Change: Drive more frequency.

Speaker Change: And drive member acquisition.

Speaker Change: So ultimately its getting this brand back to the basic foundation of what our loyalty programs and that's one of our key strategies for this coming year. So we're well underway, we have been engaging with the digital team internally and we are partnering as well with some digital agencies externally to help us build and relaunch our digi.

Speaker Change: So co ops grew.

Speaker Change: Great investment from the franchisees. So thank you franchisees are your listening and those that are here. Thank you for supporting the costs and investing in those.

Speaker Change: But there's more to do and we will continue working with our franchisees to make sure that the co ops work effectively.

Speaker Change: <unk> program, our loyalty program.

Speaker Change: And we continue to build awareness of this brand.

Speaker Change: So.

Speaker Change: All of these are tactics and I just wanted to put it in a little one slide because at the end of the day.

Speaker Change: Last one is personalization through CRM.

Speaker Change: I probably is that the actual data from somebody if theyre, a little old, but theyre still relevant.

Speaker Change: My goal is to look at everything from our guests first approach.

Speaker Change: Turning these tactics into something meaningful so at the end of the day when someone I hold myself accountable.

Speaker Change: So 72% of consumers only engage with personalized messages.

Speaker Change: 81% of consumers want brands to understand them, better and know when and how to approach them.

Speaker Change: These are the things that we're going to do with our guests.

Speaker Change: We're igniting crave reigniting connection and we ignite culture.

Back in the day, we were lucky enough to just send an email and everybody just opened it up and was excited to get like a 10% or a free soap or something not anymore.

Speaker Change: Igniting crazed through our food breakfast core menu innovation.

Speaker Change: 19 connection through our media our loyalty program our digital channels.

Speaker Change: What I'm going to send to you and to you and to you is going to be different based on your needs. Some of you may be parents. They may want something from a kit for their kids. Some of you may not want a tree his name because youre not apparent.

Speaker Change: And lastly, igniting culture.

Speaker Change: Sure that our brand voice, we embrace it we screen shot it through our social media channels are traditional media channels and.

Speaker Change: And re engaging into multi cultural marketing as well.

Speaker Change: So that's the opportunity for us today.

Speaker Change: Is how do we make sure that we're winning with our core target.

Speaker Change: So identifying the guest understanding what they want from us and then engaging and giving them what they want.

Speaker Change: So again it is a brand that's waiting to be unleashed.

Got a focus and stay focused on the right areas not get distracted.

Speaker Change: Is the way that we're going to lean into driving and strengthening our loyalty and CRM program.

Speaker Change: And again I'm very excited to be part of this amazing team and my franchisee partners and we are together, we're going to make it happen so with that I will hand, it over to Mr. Steve John who will talk a little bit about our development plan.

Speaker Change: So this is our current program right.

Speaker Change: Right.

Speaker Change: A cookie cutter program everybody gets the same offer.

Speaker Change: And right now we've got about 5 million active members, which is great.

Speaker Change: So no personalization and where we want to get to is <unk>.

Speaker Change: Introducing them a new program second half of next year that is that we leverage data for offer personalization.

Steve John: Thank you Patti and every time you talk you're always making me hungry every time I look at those slides.

Steve John: Alright, let's talk a little bit about development in the global brands.

Speaker Change: Drive more frequency.

Speaker Change: I have to be here today.

Speaker Change: And drive member acquisition.

Speaker Change: So ultimately its getting this brand back to the basic foundation of what a loyalty program and that's one of our key strategies for this coming year. So we're well underway, we have been engaging with the digital team internally and we are partnering as well with some digital agencies externally to help us build and relaunch our dish.

Speaker Change: Talk a little bit about what progress we've made.

Steve John: One key thing that I want to focus on today is our strong partnership with franchisees.

Steve John: Every fortunate to have a significant number of engaged franchisees in the system today.

Steve John: The system today, our franchisees represented average tenure of approximately 16 years, which is pretty significant in the restaurant business considering the age of our brand.

Speaker Change: <unk> program, our loyalty program.

Speaker Change: So.

Steve John: Our franchisees are from some of the largest multi unit franchisee companies in the U S. In fact, two of the top 10 largest franchisees in the United States represent our company Brian.

Speaker Change: All of these are tactics and I just wanted to put it in a little one slide because at the end of the day.

Speaker Change: My goal is to look at everything from our guests first approach.

Speaker Change: Turning these tactics into something meaningful so at the end of the day when someone I hold myself accountable.

Steve John: Today in the audience are.

Steve John: Our franchisees one is roaming farmer, who is denny's largest franchisee, but he is also the largest franchisee of both El Pollo Loco and Krispy Kreme and she is the largest wendy's franchisee in California Rollins here today, you will hear your mom's stage later also cloud records with US who is one of duties drop through margins franchisees is also.

Speaker Change: Is these are the things that we're going to do with our guests where.

Speaker Change: We're igniting crave reigniting connection and we ignite culture.

Speaker Change: Igniting crazed through our food breakfast core menu innovation igniting connection through our media our loyalty program our digital channels.

Steve John: In the top 10 largest franchisees for Jack in the box. So you can see denny's has significant amount of experience tenured franchisees.

Speaker Change: And lastly, igniting culture, making sure that our brand voice.

Speaker Change: Embrace it we screen shot it through our social media channels are traditional media channels and.

Steve John: Our overall portfolio.

Steve John: That being said our legacy brand we've represented a national footprint, we're in all 50 states.

Speaker Change: And re engaging into multi cultural marketing as well as.

Speaker Change: How do we make sure that we're winning with our core target.

Steve John: Do you expect that from a branded 70 years old, but that's not easy to do.

Speaker Change: So Danny is a brand that's waiting to be unleashed.

Speaker Change: Got a focus and stay focused on the right areas not get distracted.

Steve John: And we have significant share and some of the largest DMA in the country.

Speaker Change: And again I'm very excited to be part of this amazing team and my franchisee partners and we are together, we're going to make it happen so with that I will hand, it over to Mr. Steve Dunn, who will talk a little bit about our development plan.

Steve John: In fact on the slide if you look at this.

Steve John: Our highest penetration dnas, where damages we also happen to be a top market share brand in seven of those 10, DMA, including one of the largest DMA in the country, which is Los Angeles. So those are represented on this slide we're very proud of that fact, and that's a significant opportunity for us to grow not necessarily in the areas where we are.

Steve Dunn: Thank you Patti and every time you talk you're always making me hungry every time I look at those lines.

Steve John: Dominating jussi here, but we say what we have we have white space to grow which is a good thing, particularly in the southeast. So that's where some of our focus will be as we look towards.

Steve Dunn: Alright, let's talk a little bit about development in the global brands.

Steve Dunn: I have to be here today.

Steve Dunn: Talk a little bit about what progress we've made.

Steve John: We'll always do backfill opportunities and the dnas, where we remain strong to protect that market share which is valuable.

Steve Dunn: One key thing that I want to focus on today is our strong partnership with franchisees. We're very fortunate to have a significant number of engage franchisees in the system today.

Speaker Change: Turning the page a little bit to talk about the global strategies that we have international development has been a bright spot for us since we relaunched the program <unk> thousand eight.

Steve Dunn: System today, our franchisees represented average tenure of approximately 16 years, which is pretty significant in the restaurant business considering the age of our brand.

Speaker Change: As we have doubled the number so it's that time of new franchise partners. We've doubled the number of new restaurants, and we've doubled the entry into new countries.

Steve Dunn: Our franchisees are from some of the largest multi unit franchisee companies in the U S. In fact, two of the top 10 largest franchisees in the United States represent or come from James Brian.

Speaker Change: Much of our program in 2008.

Speaker Change: Even though I will say the pandemic has caused significant slowdown internationally.

Speaker Change: Relaunched our franchising efforts to take into account significant learnings from the disruption.

Steve Dunn: Today in the audience are two of our franchisees one is romesburg, whose denny's largest franchisee, but he is also the largest franchisee of both El Pollo Loco and Krispy Kreme and she is the largest wendy's franchisee in California.

Speaker Change: And which has led us to be a more flexible approach to how we think about development internationally, even as far as going to become sub licensing partners. We are tuned out in our brands with our Canadian partners in our middle Eastern partners of Sublicense sub licensing rights to grow which will help expand our growth even further.

Steve Dunn: Rollins here today, you will hear your mom's stage later.

Steve Dunn: So cloud records with US who is one of Denny's top 10 largest franchisees is also in the top 10 largest franchisees for Jack in the box. So you can see denny's has significant amount of experience tenured franchisees and our overall portfolio.

That being said I told you about the disruption that we've seen in the last number of years. We have remained remarkably stable. If you think about where our global commitments have come as we work with each of our respective franchisees to adjust our approach based on their unique circumstances, both globally or domestically.

Steve Dunn: That being said our legacy Brian we've represented a national footprint, we're in all 50 states.

Steve Dunn: You expect that from a branded 70 years old, but that's not easy to do.

Steve Dunn: And we have significant share and some of the largest DMA in the country in fact on the slide if you look at this.

Speaker Change: Hold everybody you may have heard me say it on the franchise stage, even last week each unique franchise group.

Steve Dunn: Our highest penetration dnas, where damages we also happen to be the top.

We still have their own set of characteristics. So we have to meet them, where they are to make sure from a growth standpoint from a leverage standpoint, your ability as a as an organization we want to work with them.

Steve Dunn: <unk> market share brand in seven of those 10, dma's, including one of the largest DMA in the country, which is Los Angeles.

Steve Dunn: Those are represented on this slide we're very proud of that fact, and that's a significant opportunity for us to grow not necessarily in the areas, where we're dominating jussi here, but we say what we have we have white space to grow which is a good thing, particularly in the south east So thats, where some of our focus will be as we look towards the future.

Speaker Change: Our development team now as we sit here today is out re engage with each of our existing franchisees new franchisees to pitch our industry, leading package of growth incentives and explain how it benefits their respective portfolios.

Speaker Change: She gears, a little bit to talk with Kelly alluded to earlier and Thats our portfolio assessment and this was kind of re emerging our ability to grow again.

Steve Dunn: We'll always do backfill opportunities and the dnas, where we remain strong to protect that market share which is valuable.

Speaker Change: We've conducted an extensive review of each and every restaurant in our domestic portfolio.

Steve Dunn: Turning the page a little bit to talk about the global strategies that we have international development has been a bright spot for us since we relaunched the program.

Speaker Change: Through the disruption of the pandemic most of our system had very nice sales gains.

Steve Dunn: Eight <unk>.

Speaker Change: The top quintile saw that however, the bottom quintile would be absolute opposite direction and our brands.

Steve Dunn: As we have doubled the number so it's that time of new franchise partners. We've doubled the number of new restaurants, and we've doubled the entry into new countries.

Speaker Change: A lot of data on this slide but what we saw in that bottom quintile was there is treat significant trade area shifts occurred some of these restaurants can be very old. So you can think of a 70 year old plus brand you have a lot of restaurants that are out there for a very long time, we saw traffic shifts we also saw convenient shifts.

Steve Dunn: Much of our program in 2008.

Even though I will say the pandemic has caused significant slowdown internationally.

Steve Dunn: Relaunched our franchising efforts to take into account significant learnings from the disruption.

Steve Dunn: And which has led us to be a more flexible approach to how we think about development internationally, even as far as going to become sub licensing partners. We are tuned out in our brands with our Canadian partners in our middle Eastern partners of Sublicense sub licensing rights to grow which will help expand our growth even further.

Speaker Change: <unk>, which was very common during the pandemic and some of those folks never change their habits back in some of these restaurant areas, where we saw those shifts.

This analysis led us to take a very different approach to the lower quintile, which represented at the time of most of the analysis about 265 restaurants.

Speaker Change: <unk>.

It's shifted into how do we think about this to prepare us for growth.

Steve Dunn: That being said I told you about the disruption that we've seen in the last number of years. We have remained remarkably stable. If you think about where our global commitments have come as we work with each of our respective franchisees to adjust our approach based on their unique circumstances, both globally or domestically.

Speaker Change: Worked extensively with our operations team, our financial development group to come up with a strategic plan on how to face the lowest quintile restaurants first thing I'll say, it's never easy to close restaurants is a challenge when you work with external factors landlords and the like and of course youre dealing with People's lives, but we realize the closing underperforming restaurants.

Steve Dunn: Hold everybody and they've heard me say it on the franchise stage, even last week each unique franchise groups.

Speaker Change: Strategically advantageous to a number of our franchisees as it strengthens the bottomline cash flow for the long term.

Steve Dunn: Have their own set of characteristics. So we have to meet them, where they are to make sure from a growth standpoint from a leverage standpoint from their ability as a as an organization to grow do you want to work with them.

Speaker Change: We're also looking at a potential consolidation approach to a number of the restaurants that are in that rehabilitate group to continue to enhance performance, which may be better off thought about with them with a different franchisee approach to that I will say this closing restaurants is never easy, but we've made significant progress as you can see on the slide towards this.

Steve Dunn: And the team now as we sit here today.

Steve Dunn: Out re engage with each of our existing franchisees, new franchisees to pitch our industry, leading package of growth incentives and explain how it benefits their respective portfolios.

Steve Dunn: She gears, a little bit to talk with Kelly alluded to earlier and Thats our portfolio assessment and this was kind of re emerging our ability to grow again.

Speaker Change: Goal and this cleans up our portfolio and prepares us truly for growth.

Speaker Change: Completely switching into the other side of the equation, Joe you alluded to it earlier one of the things that we're very lucky for a historically older brand a legacy brand. If you will the performance of our new restaurant openings is historically strong.

Steve Dunn: Conducted an extensive review of each and every restaurant in our domestic portfolio.

Steve Dunn: The disruption of the pandemic most of our system had very nice sales gains.

Steve Dunn: The top quintile saw that however, the bottom quintile would be absolute opposite direction and our brands.

Speaker Change: We now open restaurants that over performed the fleet average by approximately $400000.

Steve Dunn: A lot of data on this slide but what we saw in that bottom quintile was there's trade significant trade area shifts occurred in some of these restaurants can be very old. So you can think of a 70 year old plus brand. We have a lot of restaurants that have been out there for a very long time.

Speaker Change: <unk> is the best validation.

Speaker Change: The guest of any legacy brands, but they are still coming to your restaurants, let's take a look.

Speaker Change: With some of our recent new restaurant openings look like.

Steve Dunn: We saw traffic shifts we also saw convenient shifts USR, which was very common during the pandemic and some of those folks never change their habits back in some of these restaurant areas, where we saw those shifts.

Speaker Change: [music].

Steve Dunn: Analysis led us to take a very different approach to the lower quintile, which represented at the time of most of the analysis about 265 restaurants.

Speaker Change: Yes.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Steve Dunn: Q.

Steve Dunn: It's shifted into how do we think about this to prepare us for growth.

Speaker Change: Thank you.

Speaker Change: Thank you.

Steve Dunn: We worked extensively with our operations team our financial development group to come up with a strategic plan on how to face the lowest quintile restaurants first thing I'll say, it's never easy to close restaurants is a challenge when you work with external factors landlords and the like and of course youre dealing with People's lives, but we've realized the closing underperforming restaurants.

Speaker Change: Okay.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: No.

Speaker Change: So.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.

Steve Dunn: Is strategically advantageous to a number of our franchisees as they strengthen the bottom line cash flow for the long term.

Speaker Change: No.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [noise].

Steve Dunn: We're also looking at a potential consolidation approach to a number of the restaurants that are in that rehabilitate group to continue to enhance performance, which may be better off thought about with them with a different franchisee approach to that I will say this closing restaurants is never easy, but we've made significant progress as you can see on this slide towards this goal.

Speaker Change: Mhm.

Steve Dunn: <unk> and this cleans up our portfolio and prepares us truly for growth.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [noise] [music].

Steve Dunn: Completely switching into the other side of the equation, Joe you alluded to it earlier one of the things that we're very lucky for a historically older brand a legacy brand. If you will the performance of our new restaurant openings is historically strong.

Steve Dunn: We now open restaurants that over performed the fleet average by approximately $400000. This is the best validation.

Steve Dunn: By the guest of any legacy brands, because they are still coming to your restaurants, let's take a look at what some of our recent new restaurant openings to look like.

Speaker Change: Alright.

Speaker Change: The video catch back up to the slides great.

Speaker Change: As you can see from that representation on the video.

Speaker Change: All over the World, we truly do are relevant for today's customer and its proven their ability to get to us.

Steve Dunn: [music].

Speaker Change: A more alright, so making the switch from a new restaurant, how do we get that same level of passion intensity and image driving in our existing fleet I just shared with you. The Genesis 70 year old plus brand with a lot of very interestingly challenging prototypical restaurants. However, we are fortunate to be ready to go with a compelling.

Steve Dunn: Okay.

Steve Dunn: Okay.

Steve Dunn: Okay.

Steve Dunn: Okay.

Steve Dunn: Okay.

Steve Dunn: Okay.

Steve Dunn: Thank you.

Steve Dunn: Thanks.

Steve Dunn: Thanks.

Steve Dunn: Okay.

Speaker Change: Early tested new model, new remodel platform drove diner to point out as Kelly alluded to we tested more than 35 restaurants in a very significant tests using an ADT testing platform pre post versus control. We are very confident that this will have a major positive impact to the system.

[music].

Speaker Change: Sales lift the traffic lift versus the investment this is incredibly strong in this industry.

Steve Dunn: Yes.

Steve Dunn: Thank you.

Steve Dunn: Thank you.

Steve Dunn: Yes.

Steve Dunn: Thanks.

Speaker Change: Give you a sense of perspective, we keep a constant eye.

Steve Dunn: [music].

Speaker Change: On our peer group and we're pleased to be leading the full service category. When you combine the investment level, coupled with the sales lift we track this on a yearly basis to the ability that we can.

Steve Dunn: Thanks.

Steve Dunn: [music].

Speaker Change: And in the family dining space, we are clearly outperforming our peer group of all of our restaurant brands that currently have an active.

Speaker Change: Boeing program.

Speaker Change: As you can see on the slide Denny's is a stand out performer.

Speaker Change: We're very proud about that and looking to get this more actively engaged with our franchisees on a daily basis. So we all know the challenges that we face today and the financing environment you've heard some of the headwinds that Kelly explain this is just as true with capital investment in any brands. So what we're doing is we're putting programs in place.

Speaker Change: To help our franchisees overcome these obstacles.

Speaker Change: Alright, well, let the video catch back up to the slides great.

Speaker Change: First of all we just introduced just a week ago, we can half ago, a remodel financial support program. This is a $100000 financial support program to the franchisees to help them.

Speaker Change: As you can see from that representation on the video.

Speaker Change: All over the world, we truly do are relevant for today's customer.

Speaker Change: Thank you over a period of time to help them get access to capital to grow it was very well received at the time, we put an acceleration program in place also introduced conference a week and a half ago and we have a remodel loan pool that we created working with the critical commercial capital have the ability for every franchisee who has needs in house.

Speaker Change: Even their ability to get to us.

Speaker Change: Alright, so making the switch from a new restaurant, how do we get that same level of passion intensity.

Speaker Change: It's driving in our existing fleet I just shared with you the Genesis 70 year old plus brand with the Waterbury interestingly challenging prototypical restaurants. However, we are fortunate to be ready to go with a compelling thoroughly tested new model, new remodeled platform diner to point out as Kelly alluded to we test.

Access to capital to do a remodel or a new unit.

Speaker Change: The ability to do so we believe these are powerful programs that will help relaunch. These programs, even though we know we're facing an uphill battle until we see some.

Speaker Change: More than 35 restaurants in a very significant tests using an EBT testing platform pre post versus control. We are very confident that this will have a major positive impact to the system.

Speaker Change: Headwinds start to come Joe.

Speaker Change: And we're very excited to see it help our franchisees grow we put really active programs together and we're looking forward to driving to the next turn to the next page. So I want to thank you and now I'm going to give the floor back to Kelly.

Speaker Change: Sales lift the traffic lift.

Speaker Change: Versus the investment this is incredibly strong in this industry.

Speaker Change: Give you a sense of perspective, we keep a constant eye on.

Speaker Change: On our peer group and we're pleased to be leading the full service category. When you combine the investment level, coupled with the sales lift we track this on a yearly basis to the ability that we can and.

Kelly Blade: Steve at this point, we thought we'd just try before we move on to <unk> and to see if there were any questions. We can take one or two we do have a full panel will create here at the end with the Denny's leadership team. This year, so you'll be.

Speaker Change: And in the family dining space, we are clearly outperforming our peer group of all of our restaurant brands that currently have an active.

Kelly Blade: I'll ask those questions at the end of the day and of keys, but right now just wondering if theres one or two just on the denim business I'm happy to take those.

Speaker Change: Modeling program and as you can see on the slide Denny's is a stand out performer.

Speaker Change: Yes, Todd on with Todd first good morning.

Speaker Change: Proud about that and looking to get this more actively engaged with our franchisees on a daily basis. So we all know the challenges that we face today and the financing environment you've heard some of the headwinds that Kelly explain this is just as true with capital investment in any brands. So what we're doing is we're putting programs in place to try to.

Kelly Blade: Okay.

Kelly Blade: Okay.

Kelly Blade: Yeah.

Kelly Blade: Yeah, I'm going to our Pete It I'll repeat it to go ahead and speak right into that for those on the webcast. Thanks, Kelly I appreciate it.

Speaker Change: On the slide it shows the identification of that bottom quintile budget.

Speaker Change: Help our franchisees overcome these obstacles.

Speaker Change: And the 150 closures and it should 50 are slated for 2024 does that mean 100 slated for 2000, and so I'm really glad you brought that up because we're going to come back and touch on that anyway. So everybody understand. This question. There was a slide that 50 in 2024 that percentage that dropped off somehow so what we were saying is there 15% of the closures of that.

Speaker Change: First of all we just introduced just a week ago, we can half ago, a remodel financial support program. This is a $100000 financial support program to the franchisees to help them.

Speaker Change: Thank you over a period of time to help them get access to capital to grow it was very well received at the time, we put an acceleration program in place also introduced conference a week and a half ago.

Speaker Change: Total number will happen in 2024, so we're not telling you something that we haven't done were actually telling you something thats been done and we're showing you that we've accomplished a great deal of it towards that end in 2024.

Speaker Change: And we have a remodel loan pool that we created working with the critical commercial capital have the ability for every franchisee who has needs in house.

Speaker Change: That makes sense of the big point. Thank you Todd for it when we were going to clarify anyway. So thank you for that.

Speaker Change: Access to capital to do a remodel or a new unit.

Speaker Change: The ability to do so we believe these are powerful programs that will help relaunch. These programs, even though we know we're facing an uphill battle until we see some of them.

Speaker Change: So we are well on our way to getting those those closures and moving on and then Youll see how quickly we get to a net growth again for Denny's, that's the goal and Youll see when Robert speaks to long term guidance when we will get there.

Speaker Change: <unk> start to become a tailwind.

Speaker Change: Great question, Yes.

And we're very excited to see it help our franchisees grow we put really active programs together and we're looking forward to drive into the next turn to the next page. So I want to thank you and now I'm going to give the floor back to Kelly.

Speaker Change: Alright, Jake Bartlett true Securities.

Speaker Change: My question was on late night, you mentioned that Denny's.

Speaker Change: Same store sales has come down the most in the category share versus 19 one.

Speaker Change: One recent seems to be that you used to be 24, seven and now youre not.

Speaker Change: Judy mentioned that.

Speaker Change: In the presentation, so far but why isn't that an offer to Richardson bring back between I foreshadowed. The great question that are those the acoustics are interesting in here. So I can hear you a little bit muffled. So is asking in terms of 24 seven is that a reason that we've seen some more that there is degradation in late night or and then given the dinner day part and actually we don't think that we were at a.

Kelly: Steve at this point, we thought we'd just try before we move on to <unk> and just see if there were any questions. We can take one or two we do have a full.

Speaker Change: Panel will create here at the end with the Denny's leadership team. This year, so you'll be able to ask those questions at the end of the day and of keys, but right now just wondering if there's one or two just on the denny's business I'm happy to take those.

Speaker Change: Percentage prior to the pandemic in terms of a 24 seven operations Theres no doubt about that we've been pretty overt upfront about that we really did sit down with our franchisees and we've done profitability analysis. We've done some we've done everything we can to really understand the profitability and the foot traffic in those dinner and late night hours and again to some extent.

Speaker Change: Yes, Todd Todd first good morning.

Speaker Change: Right.

All right.

Speaker Change: Yeah.

Speaker Change: Yep I'm going to our paid it I'll repeat it too but go ahead and speak right into that for those on the webcast. Thanks, Kelly I appreciate it.

Speaker Change: On the slide it showed the identification of that bottom quintile bucket.

Speaker Change: Trade area moved to some extent of the patterns of consumer behaviors didn't ship back and it just didn't make sense profitability wise.

Speaker Change: The 150 closures and it should 50 are slated for 2024 does that mean 100 slated for 2000, and so I'm really glad you brought that up because we're going to come back and touch on that anyway. So everybody understand. This question. There was a slide said 50 in 2024 that percentage that dropped off somehow.

We've closed on those over 75%.

Speaker Change: All of our restaurants today of Denny's today are open 24, seven still by far I can't find another family dining brands.

Speaker Change: And I can speak to a lot of quick service fast food brands that still aren't back open 24, seven it's a contraction that happen for everyone. What we do see Jake is a lot of our off premise business. As you saw comes and those those day parts right come at dinner and late night, so that different consumer is still leveraging us and thats. The reason the off premise strat.

Speaker Change: What we were saying is there 50% of the closures of that total number will happen in 2024. So we're not telling you something that we haven't done were actually telling you something that's been done and we're showing you that we've accomplished a great deal of it towards that end in 2024.

Speaker Change: That makes sense, that's a big point. Thank you Todd for when we were going to clarify anyway. So thank you for that so.

Speaker Change: <unk> continues to make sense.

But the foot traffic inside the four walls for some adjusted makes sense, we didn't see the opportunity and we started to see that really that tailwind kind of flatten out late in 2023, and it's the reason, we're not necessarily pushing for that but we're always taken the opportunity to work with our franchisees to understand their business better and see if theres an opportunity to go back open.

Speaker Change: So we are well on our way to getting those those closures and moving on and then you'll see how quickly we get to net growth again for Denny's. That's the goal and you'll see when Robert speaks to long term guidance when we will get there.

Speaker Change: Great question, Yes.

Speaker Change: Hi, Jake Bartlett true Securities.

Jake Bartlett: My question was on late night, you mentioned that Dan is the same store sales has come down the most in the category versus 19.

Speaker Change: Yeah and then.

On the same topic.

He did too.

2.2 visits per year to 2.5 getting that incremental I imagine peak weekend breakfast has always at capacity so.

Jake Bartlett: One recent seems to be that you used to be 24, seven and now you're not.

Speaker Change: Judy mentioned that.

Speaker Change: In the presentation, so far but why isn't that an opportunity you can bring back between her for Shannon. So great question if for those of us that because they are interesting in here. So I can hear you a little bit muffled. So is asking in terms of 24 seven is that a reason that we've seen some more that there is degradation in late night or and then even the dinner day part and actually we don't think that so we were at a <unk>.

Are you looking for that core customer to come in during the evening or are there weekday and how do you kind of motivate them for what isn't there.

Speaker Change: Occasion necessary sure Yeah, no that's a great question.

Speaker Change: <unk> so the week their capacity right. There is capacity on the weekends, we're incredibly busy on the weekend and weekday breakfast is busy theres capacity at dinner and late night as we kind of just referenced in terms of our complete hours of operations, but the opportunity is there both with messaging and bring back everyday value and saying. This is yes. We are the place where you can count on us for value we have value.

Speaker Change: <unk> percentage prior to the pandemic in terms of a 24 seven operations Theres no doubt about that we've been pretty overt upfront about that we really did sit down with our franchisees and we've done profitability analysis. We've done sensitivity. We've done everything we can to really understand the profitability and the foot traffic in those dinner and late night hours and again to some extent if.

Speaker Change: Leaderships and so that's critical the CRM program that had a reference right with the with our database today that is not yet as visit as sophisticated as it can be as huge headwinds for us a huge opportunity for us or tailwind for us in the coming years. So you'll see us talk even after today about the things that we know we can get it is about <unk>.

The trade area moved to some extent of the patterns of consumer behaviors didn't shift back and it just didn't make sense profitability wise.

Speaker Change: We've closed them those over 75%.

Speaker Change: All of our restaurants today of Denny's today are open 24, seven still by far I can't find another family dining brands and I can speak to a lot of quick service fast food brands that still arent. That's open 24, seven right. It's a contraction that happened for everyone. What we do see Jake is a lot of our off premise business as you saw comes in those.

Frequency of current users increasing frequency, but it is also about getting new guests.

Speaker Change: And then finally, the the off premise strategy allows us to get at.

Speaker Change: Those new guessing all the time and we're continuing to lean into those off premise virtual brands, but then offer a strategy as a whole so its many things, including just a great marketing transformation, that's underway for it or the <unk> brand and they go back here and I think we have time for one more after that I'll come up terrific. Thank you J P would from Roth capital partners.

Speaker Change: Those day parts right come at dinner and late night, so that different consumer is still leveraging us and that's the reason the off premise strategy continues to make sense.

Speaker Change: But the foot traffic inside the four walls for some adjusted makes sense, we didn't see the opportunity and we started to see that really that tailwind kind of flatten out late in 2023, and it's the reason, we're not necessarily pushing for that but we're always taken the opportunity to work with our franchisees to understand their business better and see if theres an opportunity to go back open.

Speaker Change: As we think about the remodels. Besides maybe some of the leverage we get from the sales lifts are there any costs being pulled out that would serve as kind of a tailwind to that four wall margin or is it really just.

Speaker Change: Yeah and then.

Speaker Change: Maybe a aesthetic refresh yeah, it's keeping the brand fresh and up to date and we see it with the results that we've gotten that those results, though we've completed 17, Nissan Steve slide that that data is tracked by over 44 restaurants that were in that so that sale with we feel very comfortable in saying that sales and traffic lift but it is mainly things in front of house back of the house.

Speaker Change: On the same topic.

Speaker Change: He did 2.2 visits per year to 2.5 getting that incremental I imagine peak.

Speaker Change: <unk> breakfast is always at capacity. So are you looking for that core customer to come in during the evening or their weekday and how do you kind of motivate them for what isn't there.

Innovations that are have innovation that's happening there are other things, we will do to create more efficiencies and the and the box in the model, but this remodel program is really about the aesthetics of the building seen something different on the exterior and then seeing a fresh updated look on the interior one of the things we've learned and Patty talked about America's diner for today's America, It doesn't matter, which generation you are in.

Speaker Change: Occasion necessarily sure yeah, no. That's a great question. So the week Theres capacity right. There is capacity on the weekends. The we're incredibly busy on the weekend and weekday breakfast is busy theres capacity at dinner and late night as we kind of just referenced in terms of our complete hours of operations, but the opportunity is there both with messaging and bring back everyday Val.

Speaker Change: I've sat in focus groups and listened to our own customers are or not right or light users sat and listened and America's diner with a fresh updated look whether you're a 22 or 52 Theres nostalgically, Matt. It does resonate that we are uniquely American designer for today's America. So.

Speaker Change: Are you in saying this is yes, we are the place where you can count on us for value, we have value leadership and so that's critical the CRM program that Patty reference right with the with our database today that is not yet as visit as sophisticated as it can be as huge headwinds for a huge opportunity for us or tailwind for us in the coming years, So you'll see us talk.

Speaker Change: So that the refreshes as needed if necessary and we're excited about getting that flywheel turning again.

Okay, I think uptake or yeah, Andy Jacobs.

Speaker Change: Even after today about the things that we know we can get it is about frequency of current users increasing frequency, but it is also about getting new guests in.

Speaker Change: Andrew.

Speaker Change: As a longtime successful business Denny's assumes a lot of the franchisees.

Speaker Change: Around for a while.

Speaker Change: And then finally, the the off premise strategy allows us to get those new guests in all the time and we're continuing to lean into those off premise virtual brands, but then off premise strategy as a whole so its many things, including just a great marketing transformation that's underway for the Denny's brand I'm Gonna go back here and I think we have time for one more after that I'll come a perfect. Thank you.

Speaker Change: There is a natural tendency as people age in gist.

Speaker Change: To be conservative in their investing style and they may not want to open as many restaurants as they did when they had more vigor in more than one as well as the let's say is there any way to compel these franchisees in a sense to either turn over the business sell it.

Speaker Change: J P will and from Roth capital partners as.

Speaker Change: Yes.

Speaker Change: As we think about the remodels. Besides maybe some of the leverage we get from the sales lift.

Speaker Change: If you can start to deliver on what you have and they may lag because of those sort of natural tendencies.

Speaker Change: Are there any costs being pulled out that would serve as kind of a tailwind to that four wall margin or is it really just.

Speaker Change: Yeah, and a very fair question and you'll see again, we've got two pretty amazing franchisees here that are continuing to grow that are great. Examples of putting remodels in place and seeing the returns and I'll, let them speak to that later, but part of what we did this last year. It was talked to our 13, we did 13 top to top meetings and that was the conversation what's your succession plan, what's your capital.

Speaker Change: Maybe a aesthetic refresh yeah, it's keeping the brand fresh and up to date and we see it with the results that we've gotten that those results, though we've completed 17. He saw on Steve slide that that data is tracked by over 44 restaurants that were in that so that sales lift we felt very comfortable in saying that sales and traffic lift but it is mainly things in front of house back of the house.

Speaker Change: Acacia policy or will you know what that structure look like.

Speaker Change: What happens next and how are you doing against your development agreements and so there are some franchisees interested in other territories and things that we're working through so if that's the case, we'll probably kind of look to it and are addressing it just being really smart about how to optimize the portfolio.

Speaker Change: Innovations that are have innovation that's happening there are other things, we'll do to create more efficiencies in the and the box in the model, but this remodel program is really about the aesthetics of the building seeing something different on the exterior and then seeing a fresh updated look on the interior one of the things, we learn and Patty talked about America's diner for today's America, It doesn't matter, which generation you are in.

Speaker Change: Great Great question.

Speaker Change: And with that.

I'm going to turn it over to him I turn it over to Dave or a break Kayla.

Speaker Change: Saddam focus groups and listened to our own customers are or not right or light users sat and listened and America's diner with a fresh updated look whether you're a 22 or 52 theres nostalgically that it does resonate that we are uniquely America's diner for today's America. So so the refreshes is needed it's necessary.

Speaker Change: Okay, alright, so I'd like to bring up Dave Schmidt Aqua Kiki's. Thank you.

Speaker Change: Okay.

Dave Schmidt: Alright, I think we have a few slides to advance or good morning, everybody. It is so great to be with you until a little bit about the <unk> story that we've kind of kept a little bit behind wraps for some time I'm very excited about what we've been doing for the last roughly 18 months or so.

Speaker Change: And we're excited about getting that flywheel turning again.

Speaker Change: Okay, I think uptick or yeah, Andy so Jacob.

And I'm excited to tell the story, a little bit and so I'm going to start with sort of the leadership team as Kelly mentioned I came from I started by Curt Denny's. Many many years ago back when Robert started in the mid nineties.

Speaker Change: Andrew so okay.

Speaker Change: As a longtime successful business Denny's assumes a lot of the franchisees.

Speaker Change: Around for a while.

Speaker Change: There's a natural tendency as people age in gist.

Dave Schmidt: Spent most of my career at Bloom and brands, So I spend it in a multi brand environment similar to what we're creating here. So we're very very familiar with the idea of shared services something.

Speaker Change: To be conservative in their investing style and they may not want to open as many restaurants as they did when they had more vigor in.

Dave Schmidt: Something that I actually like to call the center of excellence.

Dave Schmidt: So you can see here's my my small, but mighty Kiki's leadership team both analysts and many are both familiar with working on these multi brand environments as well and what we intend to do is stay small stay nimble and leverage that centre of excellence on all things like real estate development HR.

Speaker Change: And Warren as well as the let's say is there any way to compel these franchisees in a sense to either turn over the business sell it mhm.

Speaker Change: If you can start to deliver on what you have and they may lag because of those sort of natural tendencies.

And a very fair question and you'll see again, we've got two pretty amazing franchisees here that are continuing to grow that are great. Examples of putting remodels in place and seeing the returns and I'll, let them speak to that later, but part of what we did this last year. It was talked to our 13. It had 13 top to top meetings and that was the conversation what's your succession plan, what's your capital allocation.

Dave Schmidt: It gives us the opportunity to focus ruthlessly on things that are uniquely <unk> Lake operations.

Dave Schmidt: Developing best in class training materials and of course marketing.

Speaker Change: So in <unk>, we're all about fresh starts you heard Kelly mentioned this earlier were about fresh starts for everyone. Every day not just our guests that come to visit us to start their day off right, but also for our staff as well our team members our managers and it's our vision to create 40 million fresh starts annually by the year 2030, So it's a pretty lofty goal.

Speaker Change: <unk> policy or will you know what that structure look like what happens next and how are you doing against your development agreements and so there are some franchisees interested in other territories and things that we're working through so if that's the case would probably kind of looked through it in and are addressing it just being really smart about how to optimize the portfolio.

Speaker Change: It's pretty aggressive growth youre going to hear some of our new unit count growth projections from Robert a little bit later, but it also involves increasing our traffic and our top line as well. So it's a combination of both the topline growth as well as new unit growth.

Great question.

Speaker Change: And with that.

Speaker Change: I'm going to turn it over to Mike turning it over to Dave or a break Kayla.

Speaker Change: Okay, alright, so I'd like to bring up Dave Schmidt at Waikiki. Thank you.

Speaker Change: I wanted to take a little look at the brand history. Some of you might not be as familiar with <unk> <unk>.

Speaker Change: Okay.

Speaker Change: Two brothers, Kevin and Keith May have moved down to Florida from Pennsylvania, and had a very difficult time, finding a great classic breakfast place like they were used to do back home.

Dave Schmidt: Alright, I think we have a few slides to advance your good morning, everybody. It is so great to be with you and so a little bit about the kinky story that we've kind of kept a little bit behind wraps for some time I'm very excited about what we've been doing for the last roughly 18 months or so and I'm excited to tell the story, a little bit and so I'm on.

Speaker Change: We made the decision to late leave the insurance business that they were both in and they open their first Yankees in Orlando, Florida, and it was a big success right and millennial mall the heart Orlando, if youre familiar with Orlando was a big success. It did very very well and for the next 15 years. They grew to 50 cafes.

Dave Schmidt: To start with sort of the leadership team as Kelly mentioned I came from I started my career Denny's many many years ago.

Dave Schmidt: When Robert started in the mid Ninety's, but spent most of my career at Bloom and brands, So I spread that in a multi brand environment similar to what we're creating here so very very familiar with the idea of shared services.

With virtually no marketing at all.

Speaker Change: Most of the franchise partners that they brought onboard some of whom are friends and family, but most of who the where they brought onboard as franchise partners also had little to no experience in the restaurant space, So Kevin and Keith had a very specific idea in mind to keep it as simple and easy to operate as possible. They admittedly even today. So we don't have any experience there.

Dave Schmidt: Nothing that I actually like to call. The center of excellence and so you can see here's my my small, but mighty Kiki's leadership team both analysts and many are both familiar with working on these multi brand environments as well and what we intend to do is stay small stay nimble and leverage that centre of excellence on all things like real.

Speaker Change: Restaurants space. So we just wanted to keep it simple and easy to operate as possible and it was genius it actually turned out really to their benefit.

Dave Schmidt: Estate development HR.

Speaker Change: The model with no marketing worked fine so they they focused exclusively on quality of food portion sizes and service and at the time of the acquisition in middle of 2022, they've grown into 53 cafes since that time, we've opened nine additional cafes and Kelly mentioned, we opened our first one outside the state of Florida in January of this year at <unk>.

Dave Schmidt: It gives us the opportunity to focus ruthlessly on things that are uniquely kiki's like operations on developing best in class training materials and of course marketing.

Dave Schmidt: So again, we're all about fresh starts you heard Kelly mentioned this earlier Whereabout fresh starts for everyone. Every day not just our guests that come to visit us to start their day off right, but also for our staff as well our team members our managers and it's our vision to create 40 million fresh starts annually by the year 2030, So it's a pretty lofty goal.

Speaker Change: Person Ville, Tennessee with since opened a second one in that Nashville market and just less than two weeks ago actually we opened our first cafe in Highlands Ranch, Colorado, So very excited about the growth that we've seen.

Speaker Change: Taking a quick look at Keith you kind of by the numbers I mentioned the first cafe opened in 2006. So we're very excited to celebrate our 18th birthday in November next month.

Dave Schmidt: It's pretty aggressive growth youre going to hear some of our new unit count growth projections from Robert a little bit later, but it also involves increasing our traffic and our topline <unk> as well. So it's a combination of both the topline growth as well as new unit growth.

Speaker Change: Talked a little bit about the economics of a 7% to $2 30 business model that only focuses on breakfast and lunch and the attractiveness of that business model, particularly as it relates to labor deployment, which is obviously a growing concern in the entire restaurant space, but the attractiveness not just on the economic side, but also in recruiting talent team members.

Speaker Change: I wanted to take a little look at the brand history. Some of you might not be as familiar with Kiki's two brothers, Kevin and Keith May have moved down to Florida from Pennsylvania, and they had a very difficult time, finding a great classic breakfast place like they were used to back home. So they made the decision to late leave the insurance business that they were both.

<unk> and managers to the business with that proposition of being able to.

Speaker Change: Close the doors at 230 would be home by 330 or four to pick your kids up at the bus stop is very attractive and it's one that we've leveraged a pretty heavily you'll see we just opened our 60 <unk> cafe very excited about that.

Speaker Change: In and they open their first Kiki's in Orlando, Florida, and it was a big success right and millennial mall the heart Orlando, if you're familiar with Orlando was a big success. It did very very well and for the next 15 years. They grew to 50 cafes.

Speaker Change: And then from a product mix perspective, we are very breakfast heavy so even though we're open through lunch roughly 90% of the items. We sell are breakfast items. So the very protein light.

Speaker Change: With virtually no marketing at all.

Speaker Change: Most of the franchise partners that they brought on board some of whom are friends and family, but most of who the who they brought on board as franchise partners also had little to no experience in the restaurant space, So Kevin and Keith had a very specific idea in mind to keep it as simple and easy to operate as possible via admittedly. Even today is that we didn't have any experience with <unk>.

Speaker Change: Let's take a look at our Florida footprint, you know that we're a Florida based brand, but it's important for everyone to understand that even within Florida, 75% of our Florida locations are in two markets in Tampa and Orlando. That's just the nature of how the brand grew over the last several years. So 43 out of our 55 units in our comp.

Speaker Change: Franz basically we just wanted to keep it simple and easy to operate as possible and it was genius it actually turned out really to their benefit.

Speaker Change: Base actually residing there Tampa or Orlando, So when we report our comp sales and compare those to national averages and even Florida average as you can see it's a very very heavily skewed in Tampa and Orlando and while we remain very bullish on the Florida economy. Overall I'm personally very excited to step outside of those markets and not be so real.

Speaker Change: The model with no marketing worked fine so they they focused exclusively on quality of food portion sizes and service and at the time of the acquisition in middle of 2022, they've grown into 53 cafes since that time, we've opened nine additional cafes and Kelly mentioned, we opened our first one outside the state of Florida in January of this year at Henry.

Speaker Change: On those two main markets.

Speaker Change: <unk>, Tennessee, we since opened a second one in that Nashville market and just less than two weeks ago actually we opened our first cafe in Highlands Ranch, Colorado, So very excited about the growth that we've seen.

Speaker Change: So what we've been working on over the last 18 months, where you saw the.

Speaker Change: The small, but mighty leadership team, we put in place and while Kevin and Keith focused on all the right things you would as a small business owner flawless execution getting tables turned every 38 minutes, putting every all the food on the plate, making sure every play comes out perfect. They invested very little in things like training technology, there was virtually no consumer insight.

Speaker Change: A quick look at Keith you kind of by the numbers I mentioned the first cafe opened in 2006. So we're very excited to celebrate our 18th birthday in November next month.

Speaker Change: Talked a little bit about the economics of a 7% to $2 30 business model that only focuses on breakfast and lunch and the attractiveness of that business model, particularly as it relates to labor deployment, which is obviously a growing concern in the entire restaurant space, but the attractiveness not just on the economic side, but also in recruiting talent team members.

Speaker Change: Our analytics that I mentioned no marketing so some of those things we've been working on over the last 18 months, where the early stages of rolling out a new point of sale system that comes with kitchen displays, which makes our kitchens more efficient. We now have robust training materials. So we're ready and able to open cafes faster and more efficiently across the country. We've got some great consumer in.

Speaker Change: And managers to the business to that proposition of being able to.

Speaker Change: Sites that I'm going to share just a little bit with you and we're in the very early stages of developing and evolving a great marketing program.

Speaker Change: It closed the doors that two thirds of the home by 330 or four to pick your kids up at the bus stop is very attractive and it's one that we've leveraged a pretty heavily you say, we just opened our 62nd cafe very excited about that.

Speaker Change: All while remaining focused on flawless and excellent operations.

Speaker Change: With that I'd like to show a quick video.

Speaker Change: And then from a product mix perspective, we are very breakfast heavy so even though were opened through lunch roughly 90% of the items. We sell are breakfast items. So the very protein light.

Speaker Change: Hum.

Speaker Change: [noise] and Kiki breakfast Cafe morning are full of possibilities.

Speaker Change: For your chance to reset recharge.

Speaker Change: Let's take a look at our Florida footprint, you know that we're a Florida based brand, but it's important for everyone to understand that even within Florida, 75% of our Florida locations are in two markets in Tampa and Orlando. That's just the nature of how the brand grew over the last several years. So 43 out of our 55 units in our comp.

Speaker Change: Good day, Jeff.

Speaker Change: To hit the ground running with freshly ground coffee to get cracking ethane cracking.

Speaker Change: Hey, Brian.

Speaker Change: To conquer your day with tight Bolivia to do it.

Speaker Change: And to arrive in China.

Speaker Change: With fast friendly service you can always count on.

Speaker Change: Base actually residing there Tampa or Orlando, So when we report our comp sales and compare those to national averages and even Florida average as you can see it's a very very heavily skewed in Tampa and Orlando and while we remain very bullish on the Florida economy. Overall I'm personally very excited to step foot outside of those markets and not be so real.

Speaker Change: To make you feel right at home.

Speaker Change: Keith Breakfast Cathay fresh Sir Sir daily.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Over my Thunder, but Steve Youre always an honorary member of the team.

Speaker Change: Lying on those two main markets.

Speaker Change: So all you saw that stuff the new imagery and everything we had to start from scratch. So you know when we bought the brand there was none of that collateral no pictures no video not enough and so we created a lot of that over.

Speaker Change: So what we've been working on over the last 18 months, where you saw the.

Speaker Change: The small, but mighty leadership team, we put in place and while Kevin and Keith focused on all the right things you would as a small business owner flawless execution getting tables turned every 38 minutes, putting every all the food on the plate, making sure every play comes all perfect. They invested very little in things like training technology, there was virtually no consumer insight.

Speaker Change: Over the last 18 months do you think about the brand differentiator is what makes <unk> different from everyone else in the daytime eatery space.

Speaker Change: And Charlie mentioned, we have an almost cult like following in our home state of Florida.

Speaker Change: Love for the classic offerings large portions of the things I mentioned and we did some initial consumer research and our brand ethos study early on and one of the guests told US this quote and I've used it. Many many times was a regular <unk>. They said theres two type of guest those who uptick even those who haven't tried it yet so of course I snatched at that.

Speaker Change: Our analytics that I mentioned no marketing so some of those things we've been working on over the last 18 months, where the early stages of rolling out a new point of sale system that comes with kitchen displays, which makes our kitchens more efficient. We now have robust training materials. So, we're we're ready and able to open cafes faster and more efficiently across the country. We've got some great consumer in.

Speaker Change: Quote and I use it quite often.

Speaker Change: If you look at where cheeses.

Speaker Change: Sites and I'm going to share just a little bit with you and we're in the very early stages of developing and evolving our great marketing program.

Speaker Change: In the daytime eatery category.

Speaker Change: It is a as Kelly said a highly fragmented.

Speaker Change: All while remaining focused on flawless and excellent operations.

Speaker Change: And regional other than one major large national chain is very regional and so we believe that <unk> has a unique positioning that allows us to be the leader in this category for four primary reasons. The first is that Denny's partnership.

Speaker Change: With that I'd like to show a quick video.

Speaker Change: [noise] Kiki breakfast cafe morning possibilities.

Speaker Change: Partnering with a world class franchisor like Denny's Who's got a long history being experts in this franchise business is a huge advantage for us and we plan on leveraging the shared services and things like real estate, Steve's team and real estate and development legal accounting technology, and things like HR and benefits, which quite honestly, we would not be able.

Speaker Change: Are you a chance to reset recharge darn good day, Jeff.

Speaker Change: To hit the ground running with freshly ground coffee to get cracking we can correct me.

Speaker Change: Or will your breakfast favorites.

Speaker Change: To conquer your day with sleep, Bolivia to do it.

Speaker Change: And to arrive in China with.

Speaker Change: With fast friendly service you can always count on.

Speaker Change: Two otherwise offer those things to our employees and then of course, leveraging the size and scale of Denny's for our purchasing power things like contracted lease negotiations gives us a huge advantage versus some of our competitive set.

To make you feel right at home.

Speaker Change: Keith Breakfast Cafe fresh Sir Sir daily.

Speaker Change: Second we're committed to this asset asset light approach to our growth.

Speaker Change: Youre always an honorary member of the <unk> team.

Speaker Change: Something that no franchise or of scale is doing in our category and.

Speaker Change: So all you saw that stuff the new imagery and everything we had to start from scratch. So you know when we bought the brand there was none of that collateral no pictures no video not enough and so we created a lot of that.

Speaker Change: And quite honestly, we have a large group of eager existing kiki's kiki's franchisees, who are ready to grow youre going to get to me two of them. Later. This morning. We also have access to the damage community of franchisees, who are eager to grow their businesses as well and quite honestly. It's a match made in heaven, because they're looking to grow their businesses beyond just their denny's inverse.

Speaker Change: Over the last 18 months do you think about the brand differentiator is what makes <unk> different from everyone else in the daytime eatery space.

Speaker Change: And Kelly mentioned, we have an almost cult like following in our home state of Florida.

Speaker Change: Love for the classic offerings large portions of the things I mentioned and we did some initial consumer research and our brand ethos study early on and one of the guests told US this quote and I've used it. Many many times he was a regular ickes. They said theres two type of guests those who uptick even those who haven't tried it yet so of course, I snatched that that court and I use it quite often.

<unk> and it gives us access to great operators in markets that sometimes are more difficult to operate so they've got the local expertise in some of those markets.

Speaker Change: I've talked about the visionary leadership team that we're putting together will remain committed to being small and mighty stay still are small and nimble test and learn move quickly on some of these new ideas that we're bringing to the table and we've focused ruthlessly on creating this culture of accountability recognition and collaboration I think one of the biggest risks as you grow a brand.

<unk>.

Speaker Change: If you look at where <unk> is in the <unk>.

Speaker Change: In the daytime eatery category.

Speaker Change: It is a as Kelly said a highly fragmented.

Speaker Change: And regional other than one major large national chain, it's very regional and so we believe that <unk> has a unique positioning that allows us to be the leader in this category for four primary reasons. The first is that Denny's partnership.

Speaker Change: Is losing that culture that is so embedded in <unk> today, while we're still a regional brand in Florida. So we're spending a lot of time focusing on attracting the right team members in the right franchisees to the business, who loves Tvs and appreciated as much as we do.

Speaker Change: Partnering with a world class franchisor like Denny's Who's got a long history being experts in this franchise business is a huge advantage for us and we plan on leveraging the shared services and things like real estate Steve's team of real estate and development legal accounting technology, and things like HR and benefits, which quite honestly, we would not be able.

Speaker Change: And then lastly, we believe that ticket is just as a winning recipe.

Speaker Change: Well loved brand in Florida, our brand ethos research work that we did told US a lot about what people love about our brand and now that we've turned on some guest research and get feedback from our guests is solidifies what we had already know that guests love us for the abundance of portion sizes of fresh quality the speed of service and a.

Speaker Change: Two otherwise offer those things to our employees and then of course, leveraging the size and scale of Denny's for our purchasing power things like contracted lease negotiations gives us a huge advantage versus some of our competitive set.

Speaker Change: Atmosphere.

Speaker Change: If you've never been to our kids don't want to show you just the <unk>.

Speaker Change: Few pictures of the phenomenal food.

Speaker Change: Top left there you see our Florida pancakes, which have won several awards on best Pancake in Florida, and see our stuffed French toast. The food is very abundant colorful beautiful it falls off the plate.

Speaker Change: Second we're committed to this asset asset light approach to our growth.

Speaker Change: Something that no franchise or of scale is doing in our category and.

Speaker Change: And quite honestly, we have a large group of eager existing kiki's kiki's franchisees, who are ready to grow youre going to get to me two of them. Later. This morning. We also have access to the <unk> community of franchisees, who are eager to grow their businesses as well and quite honestly. It's a match made in having because they're looking to grow their businesses beyond just their their denny's inverse.

Speaker Change: I mentioned turned in a black box intelligence in our guest satisfaction scores, we did that in the second quarter of 2023 is the first time, we've ever really got data to support what our brand research suggested.

Speaker Change: And so coming out of the gate in the second quarter of 23, you see our net sentiment score was positive 53, which is fantastic right now we have data to support what we already knew about the brand and look what happened over the last five quarters from Q2 of 'twenty three to Q3 of 2024 or that sentiment score today in Q3 of the 73, which is phenomenal.

Speaker Change: <unk> and it gives us access to great operators in markets that sometimes are more difficult to operate so they've got the local expertise in some of those markets.

Speaker Change: I've talked about the visionary leadership team that we're putting together will remain committed to being small and mighty to stay still are small and nimble test and learn move quickly on some of these new ideas that we're bringing to the table and we've focused ruthlessly on creating this culture of accountability recognition and collaboration I think one of the biggest risks as you grow our brand.

Speaker Change: And if you look off to the right there by category, which black box breaks this down for US, we're leading the segment and pretty much all categories and <unk>.

Speaker Change: Specifically, if you look at food service and ambiance, we've got best in class scores now ambiance was interesting because if you actually dig into the comments and read some of them ambiance, often becomes a proxy for cleanliness guest will call out our cafes as being some of the cleanest that they visited Sarnia got great food, Great service and you've got some of the cleanest restaurants, you got something pretty special there.

Speaker Change: As losing that culture that is so embedded in cookies today, while we're still a regional brand in Florida. So we're spending a lot of time focusing on attracting the right team members in the right franchisees to the business, who love cookies and appreciate as much as we do.

Speaker Change: To leverage.

Speaker Change: If you look at our Google Star ratings, again, 2022 and improvement in 'twenty, three and year to date were at a 475 for 2024 and that's that's pretty elite status separate $4 75 in any category of restaurant chain for seven five is pretty pretty high.

Speaker Change: And then lastly, we believe that ticket is just as a winning recipe.

Speaker Change: Well loved ran in Florida, our brand ethos research work that we did told US a lot about what people love about our brand and now that we've turned on some guests.

Research and get feedback from our guests is solidifies what we had already know that guests love us for the abundance of portion sizes of fresh quality the speed of service and a great atmosphere.

Speaker Change: And what this does is it gives me a high level of confidence that as we start turning on some of the marketing programs to invite new guests into experience Kiki's theyre going to get a great experience, we're going to come back on those marketing dollars that we deploy will have huge dividends and be highly accretive to both sales and profit.

Speaker Change: If you've never been to a kiki's I'm going to show you just the.

A few pictures of the phenomenal food.

Speaker Change: The top left there you see our Florida pancakes, which have won several awards best pancake in Florida, and see our stuffed French toast. The food is very abundant colorful beautiful it falls off the plate.

Speaker Change: Let's take a look at Florida sales trends, it's no surprise, Florida sales have been challenged relative to the national averages for some time. He gives us no different however, I will say we have closed the gap most recently and we've taken this opportunity since the middle of 2023 to really level set our value equation.

Speaker Change: I mentioned, turning in a black box intelligence in our guest satisfaction scores, we did that in the second quarter of 2023 is the first time, we've ever really got data to support what our brand research suggested so.

So during this time.

We tested a few things we rolled out a new menu in Q4 of 2023 and reduced the number of items on that menu from 97 down to 46.

Speaker Change: So coming out of the gate in the second quarter of 23, you see our net sentiment score was positive 53, which is fantastic right now we have data to support what we already knew about the brand and look what happened over the last five quarters from Q2 of 23% in Q3 of 2024 or that sentiment score today in Q3 of the 73, which is phenomenal.

Speaker Change: In Q1 of 2024, we rolled out a new kids menu and an effort to.

Fuse a little bit of value and to that point, even though we had a section on the kids on the menu that said kids menu. If basically was just the adult sized portion of the adult size price a lot of the kids menu suggests would come off in common. So you don't really have a kitchen that you guys just call. It out over here, but you are still certainly the same waffle at the same price.

Speaker Change: And if you look off to the right there by category, which black box breaks this down for US, we're leading the segment and pretty much all categories and specifically if you look at food.

Speaker Change: Service and ambiance, we've got best in class scores now audience is interesting because if you actually dig into the comments and read some of them ambiance, often becomes a proxy for cleanliness guest will call out our cafes as being some of the cleanup that they visited so when you've got great food, Great service and you've got some of the cleaners restaurants, you got something pretty special there to leverage.

We rolled out the kids' menu with our value scores improve there we've taken very minimal pricing. During this window from Q3 of 23 to today. So we feel like we've really kind of level set our value equation, but we've also taken the opportunity to test some AAV drivers some topline drivers so let's take a look at what those might be.

If you look at our Google Star ratings, again, 2022 and improvement in 'twenty, three and year to date were at a 475 for 2024 and that's that's pretty elite status separate $4 75 in any category of restaurant chain for seven five is pretty pretty high.

Speaker Change: On the runway we've got these four top line traffic drivers our beverage program, our marketing program, our design and remodel program in our off premises program now I will tell you that all four of these are still relatively in the early stages of executing we have rolled out phase one of our beverage program, let's take a look at that phase one was really.

Speaker Change: And what this does is it gives me a high level of confidence that as we started turning on some of the marketing programs to invite new guests into experience Kiki's theyre going to get a great experience, we're going to come back in those marketing dollars that we deploy will have huge dividends and be highly accretive to both sales and profit.

Speaker Change: Just three very basic cocktails, there was almost a bellini and our St Bria.

Speaker Change: For that we only have to bring in two products are brought in MRO Merlot for the sangria and we brought in our pro <unk> for the most of the Bellini We had one glass that we had to bring in for all three cocktails. So it's very basic very basic we really just trying to address the veto vote of people, who want to come in and get them emotionally.

Speaker Change: Let's take a look at Florida sales trends, it's no surprise, Florida sales have been challenged relative to the national averages for some time. He gives us no different however, I will say we have closed the gap most recently and we've taken this opportunity since the middle of 2023 to really level set our value equation.

Speaker Change: We rolled that out in the first quarter of 2024, we're about 80% active in our system today and we think this initiative is worth four to 600 basis points now phase two we're starting to test in some of our new cafes phase two includes expanding that cocktail menu, a little bit larger and bringing in some more coffee beverages like espresso.

Asia. So during this time.

Speaker Change: We tested a few things we rolled out a new menu in Q4 of 2023 and reduced the number of items on that menu from 97 down to 46.

Cappuccinos and some losses.

In Q1 of 2024, we rolled out a new kids menu and an effort to.

Speaker Change: The second topline drivers this evolving marketing program I mentioned that we had virtually no marketing to speak of on prior to the acquisition took us a little bit of time, we had to build some collateral create do some creative in terms of getting the pictures the videos when I say, we have no no marketing at all we didn't have a Facebook page like there was no online.

Speaker Change: Infuse a little bit of value and to that point, even though we had a section on the kids on the menu that said kids menu. It basically was just the adult sized portion of the adult sized price call out of the kids menu. So guests with Tom's often comment that you don't really have a kids menu you guys just call it out over here, but youre still serving me the same waffle at the same price.

Speaker Change: <unk> presence at all so general law.

Speaker Change: A very talented director marketing he came on board in late 2023.

Speaker Change: So we rolled out the kids' menu, what's our value scores improve there we've taken very minimal pricing. During this window from Q3 of 23 to today. So we feel like we've really kind of level set our value equation, but we've also taken the opportunity to test some AAV drivers some topline drivers, let's take a look at what those might be.

Speaker Change: In the middle of that year, we started collecting 1% for our brand building pumps. So we can start creating some of this content. This is some of the things you see here.

Speaker Change: Saw some of that in the video as well Q3 in July of this year, we did our first ever paid media campaign. We saw very very positive results again, it's very early in this in this stage, but we have our first ever newly created brand campaign, that's going to launch in January of next year.

Speaker Change: On the runway we've got these four top line traffic drivers our beverage program, our marketing program, our design and remodel program in our off premises program now I will tell you that all four of these are still relatively in the early stages of executing we have rolled out phase one of our beverage program, let's take a look at that phase one was really just three.

Speaker Change: So very excited about that in terms of the new design first cafe, we opened outside of Florida, and Nashville, Tennessee implemented this new design plan and if you look to the left.

Speaker Change: Very basic cocktails.

Speaker Change: That's what the first 53, kiki's cafes looked like black ceilings dark floors herbal boost every one of them what exactly like that brown power walls, and so we wanted to keep some of the elements that may kick his ges like the booths heavy a floor plan, but we introduced a lot lighter colors, you see the white ceilings, a lot more open more windows <unk>.

Speaker Change: Also our Bellini and our St Bria.

For that we only had to bring in two products were brought in MRO Merlot for the sangria and we brought in a <unk> for the most of the Bellini we had one glass that we had to bring in for all three cocktails. So it's very basic very basic we really just trying to address the veto vote of people, who want to come in and get them a moshe.

Speaker Change: We rolled that out in the first quarter of 2024, we're about 80% active in our system today and we think this initiative is worth four to 600 basis points now phase two we're starting to test in some of our new cafes phase two includes expanding their cocktail menu, a little bit larger and bringing in some more coffee beverages like espresso.

Later.

Speaker Change: Just elaborate or atmosphere. So we've got five cafes that have opened this year with that design and we just recently completed our first ever remodeled those restaurant number seven I believe so it's 11 years old.

Speaker Change: We just did that in July.

Speaker Change: This is what the new Doctor Phillips looks like you can see the sales lift we're very excited about this I would caution again, it's still very early we're going to do two more remodels. This year. Once we've got three Remodels complete then we'll be able to put together a remodel package and roll that out to the balance of the system.

Speaker Change: Cappuccinos and some <unk>.

Speaker Change: The second top line drivers this evolving marketing program I mentioned that we had virtually no marketing to speak of prior to the acquisition took us a little bit of time, we had to build some collateral create do some creative in terms of getting the pictures the videos when I say, we have no no marketing at all we didn't have a Facebook page like there was no on.

Speaker Change: Glass growth levers off premise again very early stages of this something that <unk> historically has paid very little attention to so just with a little bit of effort. We turned on some third party partnerships with door Dash Uber eats.

Speaker Change: Online presence at all so general law a very.

Speaker Change: Talented director marketing came on board in late 2023.

We introduced some some better staging some packaging and staffing for success and we've seen just in organic growth to about 16% is where we're at in Q3 of 2024. We think this is conservatively conservatively worth 18% to 20% of our sales and that's just basically benchmark off of some of our competitive set just scratching the surface.

Speaker Change: In the middle of that year, we started collecting 1% for brand building pumps. So we can start creating some of this content and this is some of the things you see here you saw some of that in the video as well Q3 in July of this year. We did our first ever paid media campaign. We saw very very positive results again, it's very early in this in this stage, but we have our first ever.

On catering and Theres, some other levers as well as it relates to off premise.

Speaker Change: Newly created brand campaign, that's going to launch in January of next year.

So this is a makeup of our current.

Speaker Change: Portfolio of 19 franchisees, we've got a very healthy mix of single unit operators, who love their Tvs, who operated it's their bread and butter of their family business and they're very happy and we also have some multi units who are eager to grow like I said some that are here today and youre going to get to meet that but as we expand into more experience. We're looking into new marks rogen for more experienced operate.

So very excited about that in terms of the new design first cafe, we opened outside of Florida, and Nashville, Tennessee implemented this new design plan and if you look to the left.

Speaker Change: That's what the first 53, kiki's cafes looked like black ceilings dark floors herbal boost every one of them looked exactly like that brown colored walls, and so we wanted to keep some of the elements that may kiki's kiki's like the booths heavy a floor plan, but we introduced a lot lighter colors, you see the white ceilings, a lot more open more windows what Brad.

Speaker Change: <unk>.

Speaker Change: We're willing enable to commit five to 10 units as they're signing new development agreements.

Speaker Change: Yeah.

Speaker Change: Alright long range outlook the portfolio. If you look at how <unk> has grown up until this year 2024, it's been very slow and steady.

Speaker Change: Just.

Speaker Change: Just a lot brighter atmosphere. So we've got five cafes that have opened this year with that design and we just recently completed our first ever remodeled those restaurant number seven I believe so it's 11 years old.

Speaker Change: It's been through franchise partnerships as I mentioned earlier, we've got.

Speaker Change: 14, new units is what were the mid point of what our guidance says we're reiterating that 12 to 16. This year. We've got five opened year to date and we've got 15 units currently under construction.

Speaker Change: We just did that in July.

Speaker Change: This is what the new Doctor Phillips looks like you can see the sales lift we're very excited about this I would caution again, it's still very early we're going to do two more remodels. This year. Once we've got three Remodels complete then we'll be able to put together a remodel package and roll that out to the balance of the system.

Speaker Change: So if you look at what's in the pipeline, we've got new Cafe development agreements of over 140, that's just from the existing <unk> franchisees.

Speaker Change: And the Denny's community, who has already expressed interest in signed development agreements. There's two additional levers that we'll be able to expand as we move into new markets. The first one is bringing new franchisees into the system haven't really explored that yet we're in the early stages of really looking for new franchisees, who aren't already part of the denny's portfolio.

Speaker Change: The last growth levers off premise again very early stages of this something that Kiki's. Historically has paid very little attention to so just with a little bit of effort. We turned on some third party partnerships with door Dash Uber eats.

Speaker Change: Introduce some some better staging some packaging and staffing for success and we've seen just in organic growth to about 16% is where we're at in Q3 of 2024. We think this is conservatively conservatively worth 18% to 20% of our sales and that's just basically benchmark off of some of our competitive set just scratching the surface.

Speaker Change: And then the fourth piece is this idea of a <unk> strategy.

Speaker Change: And it's something you're going to hear Robert talk a little bit about but I just want to mention the seat and feed strategy.

Speaker Change: Not all.

Speaker Change: Great franchise operators have the ability or the structure to be able to develop and grow new restaurants, and this is something that quite honestly as a new trend in the franchise world and so we don't want to say no to great franchise operators, but not all of them want to developed markets and so one of the questions I get most often is we're talking to prospective franchisees.

Speaker Change: On catering there is some other levers as well as it relates to off premise.

Speaker Change: So this is a makeup of our current portfolio.

Speaker Change: Portfolio of 19 franchisees, we've got a very healthy mix of single unit operators, who love their Tvs, who operated it's their bread and butter of their family business and they're very happy and we also have some multi units who are eager to grow like I said, some that are here today and youre going to get to meet them, but as we expand into more experience, we're looking into new markets rogen for more experienced operator.

Speaker Change: What do you have for me to buy do you have anything in Florida, It I'd love to buyer market.

Speaker Change: Or another one is this tennessee for sale, because I'd love to buy Nashville, So I'll never say never but this idea of investing in the development and the early stages and then partnering with the right franchise, operator flip that market is something that we're exploring we're still committed to the asset light long term strategy with an 85% to 90% France.

Speaker Change: <unk>.

Speaker Change: We're willing enable to commit five to 10 units as they're signing new development agreements.

Speaker Change: Alright long rage outlook the portfolio. If you look at how <unk> has grown up until this year 2024, it's been very slow and steady it's.

Speaker Change: <unk> mix. So that's still our long term strategy, but we think theres an opportunity to capitalize on some markets, where we don't currently have a great denny's developer and we don't have a cheeky as operator who's willing to develop.

Speaker Change: It's been through franchise partnerships as I mentioned earlier, we've got.

Speaker Change: 14, new units is what where is the midpoint of what our guidance says we're reiterating that 12 to 16. This year. We've got five opened year to date and we've got 15 units currently under construction.

Speaker Change: This is just a nice snapshot of where those 140 plus development commitments are.

Speaker Change: What's unique here as you can see we plotted out some of our competitors as well.

Speaker Change: So if you look at what's in the pipeline, we've got new Cafe development agreements of over 140, that's just from the existing <unk> franchisees and the Denny's community, who has already expressed interest in signed development agreements.

Speaker Change: And this gives us a really neat opportunity to sort of leapfrog some of our competitors.

Speaker Change: And really get a strong hold in what we consider to be some high value markets from coast to coast. So our strategy is still committed to be in high penetration in key markets build out in a market and get operational excellence in the markets that we penetrated and we don't want to do one and two cafes in certain cities across the country and just sort of a shock.

Speaker Change: Two additional levers that we'll be able to expand as we move into new markets. The first one is bringing new franchisees into the system haven't really explored that yet we're in the early stages of really looking for new franchisees, who aren't already part of the denny's portfolio.

Speaker Change: An approach it doesn't give us the operational excellence and experience that we need.

Speaker Change: And then the fourth piece is this idea of a seed and feed strategy.

Speaker Change: And it's something you're going to hear Robert talk a little bit about but I just want to mention the seed and feed strategy.

Speaker Change: So it's a new day at <unk>.

Speaker Change: We spent a lot of time over the last 18 months solidifying the foundational elements that we need to be able to build the brand.

Not all.

Speaker Change: Great franchise operators have the ability or the structure to be able to develop and grow new restaurants, and this is something that quite honestly as a new trend in the franchise world and so we don't want to say no to great franchise operators, but not all of them want to developed markets and so one of the questions I get most often is we're talking to prospective franchisees.

Speaker Change: Solidify the core and be prepared for rapid growth. The brand positioning is now in place we're excited to turn on some marketing levers.

Speaker Change: With the collaboration of the sale of the shared services team at Denny's and the enhancements that we've made to the building design and the menu design. It gives us ready for national expansion.

Speaker Change: What do you have for me to buy do you have anything in Florida, I'd love to buyer market.

The takeaways today the key themes number one we do have topline growth levers that we're executing against we've tested them. We're in the early stages, but we do feel confident that they will build the liver theres a tremendous amount of excitement for the brand both from a guest as well as from the franchise community out there they're with needed technology. That's now in place we.

Speaker Change: Another one is this tennessee for sale, because I'd love to buy Nashville, So I'll never say never but this idea of investing in the development and the early stages and then partnering with the right franchise, operator flip that market is something that we're exploring we're still committed to the asset light long term strategy with an 85% to 90% franchise.

Speaker Change: Also have margin growth opportunities, both in labor as well as food costs and we're moving into.

Speaker Change: Mix. So that's still our long term strategy, but we think theres an opportunity to capitalize on some markets, where we don't currently have a great denny's developer and we don't have a cheeky as operator who's willing to develop.

Speaker Change: More states that I would say our labor friendly. So we've got some margin expansion opportunities. There and then lastly, while you will see some near term investment and capital for New Cafe growth. We are committed to long term asset light strategy.

Speaker Change: This was just a nice snapshot of where those 140 plus development commitments are.

Speaker Change: And with that.

Speaker Change: What's unique here as you can see we plotted out some of our competitors as well.

Speaker Change: I will open the floor, if theres any questions.

Yes.

Speaker Change: And this gives us a really neat opportunity to sort of leapfrog some of our competitors.

Speaker Change: Yeah.

Speaker Change: I was wondering on the seed and feed strategy, whether or why not refranchising. Some of the Florida stores. Obviously, you go into a new prototype <unk> got yes.

Speaker Change: And really get a stronghold in what we consider to be some high value markets from coast to coast. So our strategy is still committed to be in high penetration in key markets build out in a market and get operational excellence in the markets that we penetrate and we don't want to do one and two cafes in certain cities across the country and just sort of a shock on.

Speaker Change: Most of your stores in Florida, you already have a franchise base that knows the model and you probably probably be fairly seamless. When then you could focus that capital on expanding it into other markets. That's great. It's a great question in Florida, We don't have a lot of corporate locations. Today. So as you mentioned most of our Florida locations are franchise.

Speaker Change: Approach it doesn't give us the operational excellence and experience that we need.

Speaker Change: So it's a new day at <unk>, we spent a lot of time over the last 18 months solidifying the foundational elements that we need to be able to build the brand.

Speaker Change: The only markets where concentrated from a corporate perspective is we do have some in Jacksonville.

Speaker Change: Which we opened two with a new cafe look and feel so we've got four Jacksonville. The rest are in Orlando. So we don't have much to sell we do want to keep at least some locations in Orlando. So that we can pass some of these things are and kind of lead from the front as we rollout new operational, but it's something we would definitely not dismissal.

Speaker Change: Solidify the core and be prepared for rapid growth. The brand positioning is now in place we're excited to turn on some marketing levers.

Speaker Change: With the collaboration of the sale of the shared services team at Denny's and the enhancements that we've made to the building design and the menu design. It gives us ready for national expansion.

Speaker Change: Hi, I had a question about why.

Speaker Change: The takeaways today the key themes number one we do have topline growth levers that we're executing against we've tested them. We're in the early stages, but we do feel confident that they'll they'll deliver theres a tremendous amount of excitement for the brand both from a guest as well as from the franchise community out there now with needed technology. That's now in place we.

Speaker Change: Florida has been such a hotbed for this category.

Speaker Change: <unk>.

That's one part and then the other is.

How it travels or anything about California, obviously, there is very few look at that map is for you.

Speaker Change: You compare competitors in California.

Speaker Change: So is there something about California that would make it more difficult to grow and then as part of that question how much of the 140.

Speaker Change: You also have margin growth opportunities, both in labor as well as food costs and we're moving into.

Speaker Change: In California, which dark Green choice, it's just a fair amount I don't know exactly how many of the $1 40, Robert or Steve might have the answer to that question.

Speaker Change: More states that I would say our labor friendly. So we've got some margin expansion opportunities. There and then lastly, while you will see some near term investment and capital for New Cafe growth. We are committed to long term asset light strategy.

Speaker Change: But I will tell you just anecdotally historically my experience, Florida has been a great place to test the concept because you get a lot of people from across the country coming to visit Florida, whether it's a vacation or wherever they go back to Ohio or across the country wherever they live in Oh and went to this great brand. So you get a really good cross mix of the country. If you test.

Speaker Change: And with that I will open the floor, if theres any questions.

Speaker Change: Yes.

Speaker Change: I was wondering on the seed and feed strategy weather.

Speaker Change: New concepts in Florida, So that's why experience in terms of the development how much of it is in California.

Speaker Change: Or why not Refranchising some of the Florida stores. Obviously, you go into a new prototype you've got most of your stores in Florida, you already have a franchise base that knows the model and you would probably you know probably be fairly seamless, where then you could focus that capital on expanding it into other markets. That's great. It's a great question in Florida, we don't.

Speaker Change: Do you know what number I don't know what the number is in terms of how many of the 140.

Speaker Change: We'll get back to you on that we'll get back to you on that I will I will say that Denny's Denny's has a pretty strong hold them in California. So they're very good at operating restaurants in California, and we're going to use that to our advantage.

Speaker Change: Have a lot of corporate locations today. So as you mentioned most of our Florida locations are franchise.

Speaker Change: That's down 140 is there a timeframe that that commitment stands or so depending on depending on the development agreement signed most of our five to 10 units as I mentioned and typically they come with a one to two units per year. So I would say on a weighted average think about that over a five year period.

Speaker Change: The only markets where concentrated from a corporate perspective is we do have some in Jacksonville.

Speaker Change: Which we opened two with a new cafe look and feel so we've got four Jacksonville the restaurant in Orlando. So we don't have much to sell we do want to keep at least some locations in Orlando. So that we can test. Some of these things are and kind of lead from the front as we rollout new operational thing, it's something we would definitely not.

Speaker Change: Like a five to six year period for that 140, plus that are already under development agreement and is there any sort of out where are the franchise or.

Speaker Change: Dismissal.

Speaker Change: Hi, I had a question about why.

Speaker Change: So it was like how secure is that 140 or what would be a situation where it may be delayed or decline.

Speaker Change: Laura has been such a hotbed for this category.

Speaker Change: That's one part and then the other is how it travels when you think about California, obviously theres very few looking at that that matters for you.

Speaker Change: Well.

Speaker Change: Steve I don't know if you want to answer that I think there's I think these are about as rock solid as a development agreement could be there's always reasons why people can default on that but if they do default on it we do have levers that we control.

Speaker Change: You compare competitors in California.

Speaker Change: So is there something about California, but it would make it more difficult to grow and then as part of that question how much of the 140.

Speaker Change: As penalties.

Speaker Change: In California, which dark Green choice. It suggests a fair amount I don't know exactly how many of the $1 40, Robert or Steve might have the answer to that question.

Yes.

Speaker Change: Yes.

Speaker Change: No.

Dave Schmidt: Yes, Dave you answered it very well there are strict guidelines within that there's there's also incentives baked into these development agreements, but there is also a performance characteristics. They have to meet in order to maintain those and they are very reasonable based on the timeframe within each individual market and those unique circumstances.

Speaker Change: But I will tell you just anecdotally.

Speaker Change: <unk> My experience, Florida has been a great place to test the concept because you'll get a lot of people from across the country coming to visit Florida, whether it's a vacation or wherever they go back to Ohio or across the country wherever they live in like Ow went to this great brand. So you get a really good cross mix of the country. If you test new concepts in Florida. So that's why experience in terms of the develop.

Speaker Change: Hey, guys quick question for you. The 140 units I think this time last year coming out of the franchisee convention.

Speaker Change: I just talked about a 100 unit pipelines. So looking at kind of a 40 unit growth over the course of this year. Just wondering a are you metering the growth right now in.

Speaker Change: How much of it is in California.

Speaker Change: I don't know do you know a number I don't know what the number is in terms of how many of the 140.

Speaker Change: We'll get back to you on that we'll get back to you on that I will I will say that Denny's Denny's has a pretty strong hold them in California. So they're very good at operating restaurants in California, and we're going to use that to our advantage.

Speaker Change: It could be more if you wanted to but you kind of controlling that growth pace and then secondly, if you think about.

Speaker Change: That concept of the non denny's in the non <unk>.

Speaker Change: That's down 140 is there a timeframe that that commitment stands for so depending on the dependent on the development agreement signed.

Speaker Change: Kind of what's the what's the timing as you look to the horizon for kind of pulling those those levers to help build that franchise pipeline sure well in in our internal models. We always wanted to give first priority to the existing <unk> franchisees. So anywhere they wanted and express interest and desire to grow we wanted to give them.

Speaker Change: <unk> are five to 10 units as I mentioned and typically they come with a one to two units per year. So I would say on a weighted average think about that over a five year period.

Like a five to six year period for that 140, plus that are already under development agreements.

Speaker Change: Opportunity excuse me second was the Denny's franchise community.

Speaker Change: Is there any serve out where are the franchise or.

Speaker Change: So where we know we've got denny's expertise in specific markets. We wanted to thank you Robert we wanted to give them an opportunity to.

Speaker Change: So it was like how secure is that 140 or what would be a situation where it may be delayed or decline.

Speaker Change: To grow their business in markets, where they already exist. So I think just from an order of operations at <unk>.

Speaker Change: Franchise is the Denny's community and now when we're going to go into spaces that aren't already heavily penetrated with <unk>, we'll look for a new franchisees.

Steve Dunn: Well Steve.

Speaker Change: Steve I don't know if you want to answer that I think there's I think these are about as rock solid as a development agreement could be there's always reasons why people can default on that but if they do default on it we do have levers that we can pull.

Speaker Change: Hey, it's Eric Gonzalez with Keybanc.

Speaker Change: You had a slide up there where you talked about your sentiment for food beverage service ambiance intent to return and sentiment is caught my eye because it seemed like you were ahead of a few of your competitors by a fairly wide margin. So my question is where are you lagging relative to your peers and what are the opportunities for improvement in some of those metrics I'll tell you one of the areas that we were lagging.

Steve Dunn: As penalties.

Steve Dunn: Yes.

Steve Dunn: Yes.

Steve Dunn: No.

Steve Dunn: Yes, you answered it very well there are strict guidelines within that there's there's also incentives baked into these development agreements, but theres also performance characteristics. They have to meet in order to maintain those and they are very reasonable based on the time frame within each individual market and those unique circumstances.

Speaker Change: Wasn't value.

Speaker Change: Prior to the acquisition there was some pretty substantial pricing that was taken and so as we started to lap that and it fell off in the third quarter actually Robert and Kelly and I sat down and we talked about this is going to be a little bit of a hit we're going to see double digit high double digit.

Speaker Change: Hey, guys quick question for you. The 140 units I think this time last year coming out of the franchisee convention.

Speaker Change: You talked about 100 unit pipelines, so looking at kind of a 40 unit growth over the course of this year. Just wondering a are you metering the gross right now and.

Speaker Change: Headwinds from the falloff of some of the pricing that was taken pre acquisition and we all sat down and alignment that is a good opportunity let's level set we've got some foundational work to do we want to get the value equation right. We want to test some of these ideas like the new menu like the kids menu like the beverage program. So we collectively held hands and said, it's going to be a little bit rough, but we're going to we're going to work our way through.

Speaker Change: It could be more if you wanted to but you kind of controlling that growth pace and then secondly, if you think about.

Speaker Change: That concept of the non denny's in the non <unk>.

Speaker Change: Kind of what's the what's the timing as you look to the horizon for kind of pulling those those levers to help build that franchise pipeline sure well in in our internal models. We always wanted to give first priority to the existing <unk> franchisees. So anywhere they wanted and express interest and desire to grow we wanted to give them.

Speaker Change: Okay.

Speaker Change: Mike Tamas from Oppenheimer, you put a lot of work into the brand talked about getting consumer insights marketing all of that so and you go into new markets. Now. So can you talk about maybe unit economics on those new builds going forward versus maybe what they've been over the last couple of years. So it's a great question and we've got to actually franchise develop.

Speaker Change: That opportunity excuse me second was the Denny's franchise community.

Speaker Change: <unk> franchisees, we're opening new cafes.

Speaker Change: So where we know we've got denny's expertise in specific markets. We wanted to thank you Robert we wanted to give them an opportunity to grow their business in markets, where they already exist. So I think just from an order of operations at <unk>.

Speaker Change: That probably could answer that better than I could but I will tell you on the first unit, we went to Tennessee, we did invest a little bit we overinvest at a little bit because we wanted the new design, we wanted to make it pop make sure. It was right. So since we opened the first one we've done some value engineering and we'll continue to do that.

Speaker Change: Franchise is the dentist community and now when we're going to go into spaces that aren't already heavily penetrated with that he's very forgives, we'll look for new franchisees.

Speaker Change: We're still looking for the prototypical is less than 4500 square feet and liner and cap is really the perfect keys.

Speaker Change: Hey, it's Eric Gonzalez with Keybanc.

Eric Gonzalez: You had a slide up there where you talked about your sentiment for food beverage service ambiance intent to return and sentiment just caught my eye because it seemed like you were ahead of a few of your competitors by a fairly wide margin. So my question is where are you lagging relative to your peers and what are the opportunities for improvement on some of those metrics I'll tell you one of the areas that we were lagging.

Speaker Change: One of the ones, we opened in Nashville market is a freestanding because the property was available that fit exactly where we wanted to go that won't be typical will typically go back to in line and then apps. So short of some of the.

Inflationary pressures that everyone has seen in the construction world, we feel pretty good about about our economics and it's why we're improving a lot of deals.

Speaker Change: Wasn't value.

Speaker Change: Prior to the acquisition there was some pretty substantial pricing that was taken and so as we started to lap that and it fell off in the third quarter actually Robert and Kelly and I sat down and we talked about this is gonna be a little bit of a hit we're going to see double digit high double digit.

Speaker Change: Oh boy.

Speaker Change: Back here.

Speaker Change: Yeah.

Speaker Change: Just two questions.

Speaker Change: What is the customer frequency of a keys versus the denny's is at a higher frequency lower frequency and then just on maybe brand overlap do you see in the Florida market.

Speaker Change: Headwinds from the falloff of some of the pricing that was taken pre acquisition and we all sat down the line and so it's a good opportunity let's level set we've got some foundational work to do we want to get the value equation right. We want to test some of these ideas like the new menu like the kids menu like the beverage program. So we collectively held hands and said, it's going to be a little bit rough, but we're going to we're going to work our way through.

Speaker Change: Customers come to key he is also going to other daytime dining concepts are they selected <unk> as their daytime dining brand of choice and maybe that's where they're going to frequency or do you see a lot of switching between debit other concepts. So the honest truth is I don't have enough consumer insight to be able to attract that specific of a.

Speaker Change: Okay.

Speaker Change: Data what I can tell you anecdotally spending a lot of times in our cafes is we do have a high level of regulars. We've got people that come to us multiple times a week.

Speaker Change: Mike Tamas from Oppenheimer, you put a lot of work into the brand and talked about getting consumer insights marketing all of that so and you go into new markets. Now. So can you talk about maybe unit economics on those new builds going forward versus maybe what they've been over the last couple of years. So it's a great question and we've got to actually franchise developed.

Speaker Change: <unk> seen experiences of that in the two franchisees are both shaking their heads yes. So we do see that our our real estate strategy is we're a little bit more in the neighborhoods. We don't see guests travel more than two to three miles to come to <unk>. So we're kind of off the main and main so to speak in some of the higher end neighborhoods, where people come and frequent us often.

Speaker Change: Burrs franchisees, who are opening new cafes.

Speaker Change: That probably could answer that better than I could but I will tell you on the first unit, we went to Tennessee, we did invest a little bit we over invested a little bit because we wanted the new design, we wanted to make it pop make sure. It was right. So since we opened the first one we've done some value engineering and we'll continue to do that.

Speaker Change: The trifecta of our real estate strategy is if you get into higher income neighborhood near a church.

Speaker Change: Our grocery store a great grocery store people frequent regularly and you get near a gym like that's like the perfect mix of real estate strategy for to US. So we don't see a lot of crossover with denny's, but the truth is I don't have great data yet that tells me how many how many visits a year we get.

Speaker Change: We're still looking for the prototypical is less than 4500 square feet and liner and cap is really the perfect <unk>.

Speaker Change: One of the ones, we opened in Nashville market is a freestanding because the property was available that fit exactly where we wanted to go that won't be typical will typically go back to in line and end caps.

Speaker Change: Can you help US bridge the difference between the 140 development in the 250 plus franchise TCE is expected to open in the next five years on slide 112, and also how many company <unk> would you expect to open over that time period, and how many would you expect to actually <unk>.

Speaker Change: So short of some of the the.

Speaker Change: The inflationary pressures that everyone has seen in the construction world, we feel pretty good about about our economics and it's why we're approving a lot of deals.

Speaker Change: Back here.

Speaker Change: Have or not have refranchising.

Yeah.

Speaker Change: Just two questions.

Speaker Change: Hey at the end of the five years, yes. The honest truth is that Delta is the number of franchisees who are very interested in owning and operating the <unk>, but not yet really ready to develop an owner market. So they want to own <unk> excuse me I don't want to develop a market. So we've got a lot of interest and I want to be a franchisee tell me when you've got some units for me to to buy which is kind of a don.

Speaker Change: What is the customer frequency of a <unk> versus a denny's is at a higher frequency lower frequency and then just on maybe brand overlap do you see in the Florida market.

Speaker Change: Customers come to <unk> also going to other daytime dining concepts or they they selected <unk> as their daytime dining brand of choice and maybe that's where they're going to frequency or do you see a lot of switching between them in other countries. So the honest truth is I don't have enough consumer insight to be able to track that specific of a data what I.

Speaker Change: As Steve and I sat down and said man, we've got a lot of interest.

Speaker Change: The number of great developers isn't as large as we had hoped her thoughts.

Speaker Change: Bind with the fact that the new trend in this industry in the franchise world as people want to buy EBITDA. They don't want to risk of owning it. So we're committed to the 85% to 90% franchised, but it might mean in the earlier years, we got to deploy some capital to seed and feed some of these markets.

Speaker Change: Can tell you anecdotally spending a lot of times in our cafes is we do have a high level of regulars. We've got people that come to us multiple times a week.

Speaker Change: I've seen experiences of that in the two franchisees are both shaking their heads yes. So we do see that our our real estate strategy is we're a little bit more in the neighborhoods. We don't see guests travel more than two to three miles become to Kiki's. So we're kind of off the main and main so to speak in some of the higher end neighborhoods, where people come and frequent us often.

Speaker Change: That's the delta between the total.

And the.

Speaker Change: I can add clarity to the development agreements in California.

Speaker Change: As I told you earlier, a heavy concentration of the Denny's franchisees reside in California. Currently of that 140, approximately 45 of development agreements, our California franchisees that Dave mentioned earlier have an extensive knowledge of the area of the real estate and know how to build the team. So it's a really good fit in California, which is why a lot of brands can penetrate that market because it's.

Speaker Change: The trifecta of our real estate strategy is if you get into higher income neighborhood near a church.

Speaker Change: Our grocery store a great grocery store people frequent regularly and you get near a gym like that's like the perfect mix of real estate strategy for <unk>. So we don't see a lot of crossover with denny's, but the truth is I don't have great data yet that tells me how many how many visits a year we get.

Speaker Change: It's a very difficult market to get into however, with our franchisees. It's a legacy of experience there and so you can see it's almost.

Speaker Change: So like I said, 45% of our current 140 development agreements and that will grow in that market as more new restaurants open.

Speaker Change: Can you help US bridge the difference between the 140 development in the 250 plus franchise cheeky is expected to open in the next five years on slide 112, and also how many company <unk> would you expect to open over that time period, and how many would you expect to actually <unk>.

Speaker Change: Okay, that's clear.

One last question before we go to break.

Speaker Change: Alright, Kyle I think we're going to break them all right. So we'll go to break and we will come back at 11 o'clock.

Speaker Change: Thank you.

Have or not have refranchising, let's say at the end of the five years, yes. The honest truth is that Delta is the number of franchisees who are very interested in owning and operating in <unk>, but not yet really ready to develop and own the market. So they want to own a markets excuse me you don't want to develop a market. So we've got a lot of interest and I want to be a franchisee tell me when you've got some unit.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: For me to to buy which is kind of a don as Steve and I sat down and said man, we've got a lot of interest, but the number of great developers isn't as large as we had hoped or thought combined with the fact that the new trend in this industry and franchise world as people want to buy EBITDA. They don't want to risk of owning it. So we're committed to the 800.

Speaker Change: 5% to 90% franchise, but it might mean in the earlier years, we got to deploy some capital to seed and feed some of these markets.

Speaker Change: That's the delta between the total and the.

Speaker Change: I can add clarity to the development agreements in California.

Speaker Change: As I told you earlier, a heavy concentration of the Denny's franchisees reside in California. Currently of that 140, approximately 45 of development agreements, our California franchisees that Dave mentioned earlier have an extensive knowledge of the area of the real estate and know how to build the team. So it's a really good fit in California, which is where a lot of brands can penetrate that market because it's.

Speaker Change: It's a very difficult market to get into however, with our franchisees. It's a legacy of experience there and so you can see it's almost.

Speaker Change: Like I said, 45% of our current 140 development agreements and that will grow in that market as more for new restaurants open.

That's correct.

Speaker Change: One last question before we go to break.

Speaker Change: Alright, Kyle I think we're going to break them alright. So we'll go to break and we will come back at 11 o'clock.

Speaker Change: Thank you.

Speaker Change: Yeah.

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Speaker Change: Thank you.

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Speaker Change: Yeah.

Speaker Change: Great everyone.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yes.

Raphael Gross: Great everyone, we're going to get started with the rest of the presentation. Today. My name is Raphael gross I'm a partner at ICR and together with my ICR colleagues, we've been working with Denny's for more than a decade on all things related to Investor Relations and.

Raphael Gross: And as part of that work as many of you know some of you in the room and I've spoken to we conducted a formal perceptions study this past summer as a lead up to today's Investor day.

Raphael Gross: One of the key findings from those discussions that there was a lot of interest in hearing directly from franchisees about their experience with the denny's system and their thoughts on the future with respect to both the Denny's and Kiki's, France that led us to assemble a group of franchisees to share their stories with you directly and now I'm pleased to introduce our franchise.

Raphael Gross: Panel beginning with Rolling Rowland joined the Denny's franchise, just some 20 years ago in 2004, he has the largest denny's franchisee.

Raphael Gross: <unk> 108 restaurants nationwide.

Raphael Gross: Quarter of his portfolio is in non traditional travel centric location.

Raphael Gross: <unk> also been an early adopter of the new remodel design and the POS rollout and we'll talk about that shortly but he also has a diversified portfolio consisting of Denny's I'll play a loco krispy kreme and Blaze pizza.

Raphael Gross: <unk> joined the Denny system back in 2017, and he has expanded its portfolio through Denny's Refranchising and development program is the <unk>.

Raphael Gross: <unk> largest.

Raphael Gross: Franchisee with 36 restaurants across Texas and Florida.

Raphael Gross: Also an early adopter of the new remodel program and invested to convert over 35% of its portfolio already and also an earlier adopter of the new Pos rollout and we will be discussing that too. He also has a diversified portfolio which include Jack in the box.

Speaker Change: John Erhard opened his first Kiki's cafe in 2017, and yet now on six Kiki cafes in the Orlando and Fort Myers areas. He also has two additional kiki's cafes under construction has the second largest cafe and the <unk> system.

Speaker Change: And finally.

Speaker Change: <unk> wife team, Jordan and harshly Swan.

Speaker Change: Opened their first Kiki's cafe in 2014, they currently operate seven kiki's cafes in the Tampa, St. Pete DMA and they plan to expand into Georgia.

Speaker Change: With that let me ask the question of all the franchisees and I'll begin with.

Speaker Change: Roland what do you see as a unique advantage for your brands today and into the future and what do you see as the biggest challenge as well I'll start with you.

Speaker Change: I think Dennis.

Speaker Change: As an iconic brand and I think I know nine out of 10 people in America.

Speaker Change: <unk> been in one and.

And it's a so.

Speaker Change: A huge huge advantage, it's America's diner.

Speaker Change: If you've been traveling.

Speaker Change: I'd probably stop it.

Speaker Change: And so we have that iconic brand that brings people in.

Speaker Change: Our biggest challenge I would say is we've got to get.

Speaker Change: More people back then.

Speaker Change: Things.

Speaker Change: Since COVID-19 have changed.

Speaker Change: We have more price unless people.

Speaker Change: And we need you need more people.

Speaker Change: Yeah, I would say the biggest advantage for that I see is going.

Speaker Change: Going through the remodel program I think the box economics are very very strong.

Speaker Change: I am really big on return on the return on capital.

Speaker Change: And I will tell you that I will continue to.

Speaker Change: Invested reinvested and put this putting my capital into Denny's.

Speaker Change: Because the IRR is just.

Speaker Change: Beyond amazing in my view.

Speaker Change: I would say the challenge.

Speaker Change: It's really more of an industry challenge and as I see it I think it's more.

Speaker Change: We got the labor model.

Speaker Change: That we're looking at just like all the other brands out there.

Speaker Change: Whether it be USR, all the way to fast casual or.

Speaker Change: Or even family dining as we are in.

Speaker Change: I think the challenge will be be there, but we showed that challenge with the rest of the industry.

Speaker Change: Chuck.

Speaker Change: Yes, let's see.

Speaker Change: Probably the product on our site is the thing that is one of the strengths I think when you when you're inside of keys and you see the reactions of faces when the server brings a place at the table is.

Speaker Change: It's truly a very cool experience.

Speaker Change: And so I think.

Speaker Change: Being in the Florida market, and knowing who we're competing against.

Speaker Change: It's just the thing you hear constantly from customers. This is just the quality of the food the menu and that moment when it hits. The table is really special on the challenge side definitely I think what Roland said I agree with traffic. It's the macroeconomic phase we're in and just getting through to this other side.

Speaker Change: And that's pretty true.

Speaker Change: Jordan.

Speaker Change: TPS has just continued to evolve to become such a staple as far as in Florida being that spot that people love to come to <unk>.

Speaker Change: <unk> business meetings have family gatherings.

Speaker Change: And it's that local spot they just people love to come to.

Speaker Change: Big boost privacy.

Speaker Change: It's amazing because what Dennis has brought to it is that continued just encouragement and growth and all that kind of stuff that we haven't had as a smaller company and so there's just a lot of big things that are coming particularly is that we're just very excited about.

Speaker Change: Excuse me, but in regards to <unk>.

Speaker Change: From the other spectrum.

Speaker Change: Economics, all of those kind of things, but is how quickly we can even advance with the technology with some of these things that are coming forth that prior ownership did not give us a minute.

Speaker Change: All of those things are coming that are just going to continue to be great things for the brand. So.

I wanted to talk about the two brands, specifically and your beliefs about the strategies and investments that are taking place and we will start with client enrolling because they've been longtime franchisees. How would you describe your the evolution of the franchise or franchisee relationship both yours and in general since you entered the Denny's system, how do you feel.

Speaker Change: About the leadership refresh over the past few years and then just a final question. What makes you confident in the future and what are you. Most excited about maybe we'll start with you.

Speaker Change: Yes.

Speaker Change: I was.

Speaker Change: I have been trying to get into the <unk> system.

Speaker Change: Probably since 2011.

Speaker Change: Even though I got in 2017, so I've always admired the brands from afar.

Speaker Change: And always admired it because I felt like it was in <unk>.

Speaker Change: Iconic brand.

Speaker Change: Much like you've heard today, but then also a staple within within the household.

Speaker Change: Feel like it's a it's a global brand that while we have 1400 restaurants in the U S 167 abroad I feel like I can go anywhere in the entire world and somebody is going to know.

Speaker Change: The Denny's brand so.

Speaker Change: Being a legacy brand like that.

Speaker Change: It's one that.

Speaker Change: I had always wanted to be a part of it and I think the evolution of the.

Speaker Change: The leadership team and.

Speaker Change: And the whole management franchise or franchisee relations.

Speaker Change: I think thats continue to evolve I think you started out with.

Speaker Change: I was when I joined in 2017.

Speaker Change: Great interaction with the franchise or and I think where we are today is that it's just it's just continued to build so the quality of the team.

Speaker Change: Their vision. This strategy continues to excite me when it comes to reinvesting back in the brand because I invested in the <unk>.

Speaker Change: Later shift along with the fact that the brand is.

Speaker Change: <unk> is an iconic brand so I'm extremely excited about it so.

Speaker Change: Look forward to the future.

Speaker Change: Im.

I'm going to put my money, where the mouth my mouth.

Speaker Change: Fair enough Roland.

So 20 years ago, when I came in in the system.

Speaker Change: Villa Beretta franchise documents.

Speaker Change: What we saw.

Speaker Change: [laughter] I call. It the most one sided agreement in history.

Speaker Change: Yeah.

Speaker Change: The way I hope, we never have to look at it again.

Speaker Change: But there was a great contention amongst the franchisee community and the franchise or.

Speaker Change: It's just.

Speaker Change: You know it was the second brand I came through our model.

Speaker Change: Problems here and then a few years later entered John Miller, and John did a great job kind of fix.

Speaker Change: Fixing that.

Speaker Change: There's a lot of great things and he was there for like 11 years I thought Okay go.

Speaker Change: When I retire who could they possibly higher.

Speaker Change: Take his place and.

Speaker Change: And I don't know how they did it but they found the perfect person.

Kelly has been.

Speaker Change: Great.

Speaker Change: Restaurant background.

Speaker Change: I I believe.

Speaker Change: In the restaurant business, you've got to operate good restaurants, so I personally see an operator someone's kind of come through the operations side.

Speaker Change: And Kelly has done that operate great brands, great analytics with black box since he's been perfect.

Speaker Change: So she comes in she introduced a new team Theres, new ideas, it's fresh and <unk>.

Speaker Change: Rating.

Speaker Change: Been.

Speaker Change: Very good.

Speaker Change: John.

John: Do you have an interesting background, what made you decide to become a franchisee.

Speaker Change: Yeah.

Steve John: So I was a customer of <unk> first for a long time, my wife and I.

Speaker Change: And we've been a franchisee for about seven years now.

Speaker Change: To have a production company in the television World for 25 years had offices in Florida and.

Speaker Change: And we're winding that down retiring looking for the next chapter never in a million years today everything can be done up in restaurants by if you've talked I would've told you. The last thing on my list.

Speaker Change: And we had a friend that was a franchisee of keys.

Speaker Change: And we're exploring a ton of different.

Speaker Change: <unk> for us and the more we dug into that we already were huge fans of the brand when we started seeing the model.

Speaker Change: Total even thing so we started off with one restaurants seven years ago, absolutely fell in love with it will the culture single shift the hours of it the return was fantastic and so we just sort of fall in love with it with love the culture of the team and everything behind it so yeah.

Speaker Change: Never thought we would be here, but we're having a great time.

Speaker Change: <unk>.

Speaker Change: With a lot of excitement and.

Speaker Change: Fantastic.

Speaker Change: As for our rolling implied.

Speaker Change: Early adopters in the new Zinio, Pos rollout, which for everyone's clarification includes server tablets kitchen video systems and QR pay can you tell us how those investments are paying off in your restaurants and the benefits you are seeing.

Speaker Change: Roland will start with you.

Speaker Change: So in the restaurant business, we operate about 385 restaurants in 20 states.

Speaker Change: And the technology is just critical.

Speaker Change: Critical to get it right and that many restaurants.

Speaker Change: We love to buy restaurants, where people haven't used the technology, because we think we see 345 savings.

Speaker Change: And so this new system is long overdue it Denny.

Speaker Change: Very very helpful. I mean, it's still new we are.

Speaker Change: Three systems.

Speaker Change: So far.

Speaker Change: And anytime you can pay more attention to.

Speaker Change: Labor and food costs to prime cost extremely extremely beneficial, especially up.

Speaker Change: Great group of restaurants.

Speaker Change: Yes, I agree with I agree with Roland I should have about five systems in by the end of the year.

Speaker Change: And I sort of look at Daniel There's just a technology a huge technology upgrades and it's also something that is.

Speaker Change: Upgrade in front of this is customer facing when you started talking about.

Speaker Change: Working with a tablet versus a pad and pencil.

Speaker Change: When you're dealing with orders and that sort of thing I mean, it's just really more of a sophisticated look at mixture business seem more contemporary.

Speaker Change: And so to me I.

Speaker Change: I like that I haven't really tracked so far.

Speaker Change: The savings I'm sure the savings is there, but what I am interested in is how I.

I look to the consumer.

And is this something that the consumer can see that there is a change and it's an upgraded feel touch and feel from a contemporary standpoint, I really do see denny's really lever level levering up in that in that area.

Speaker Change: I wanted to stick with you both.

Speaker Change: The remodel image both of you have been early adopters of expanse office initiatives, maybe you could talk to us about your experience with the new image. How guests are responding how the teams are responding how many have you done what are the returns that you're seeing.

Speaker Change: Clinical strength you, yeah, I've done about 10 of them so far.

Speaker Change: Is it as they are.

Speaker Change: As I mentioned earlier.

Speaker Change: About 35% of the portfolio's completed and I continue to do it and I'll tell you why because.

I'm actually getting a.

Speaker Change: Double digit.

Returns on an investment.

Speaker Change: And I believe that.

Speaker Change: The more we do that the more we show the guests.

Speaker Change: That we are a different look we have that different look.

Speaker Change: We are lit up.

Speaker Change: Especially when you think about the 'twenty 'twenty four seven.

Speaker Change: Business, which case.

Speaker Change: I have only one store that's not 24 seven.

Speaker Change: Out of the 36, and I think that that is where we're going to win the game.

Speaker Change: Is that 24 seven.

Speaker Change: Because that's where I went in the game.

Speaker Change: And I know that bolus, winning the game that way so I'm very very.

Speaker Change: Very enthusiastic about 2.0.

Speaker Change: Customers see it.

Speaker Change: The curve they understand exactly what we're trying what we're trying to do and we are getting more and more incrementally.

Speaker Change: As a result of that so I'm excited I'm shape I'm extremely excited.

Oh.

Speaker Change: I brought you some good information this is not forward looking this is factual.

And helpful.

Speaker Change: Yes.

Speaker Change: The industry you got a remodel.

Speaker Change: Hey.

Speaker Change: But what you really hope is when you remodel you get a return on investment we've done five of the new Denny's, we feel a little different and Dennis we look at the outside we look at the dining room and then we go to the back of the house people, sometimes forget tobacco houses, where our people work.

And some of the Denny's are.

Speaker Change: Oh.

Speaker Change: So they need to be redone.

Speaker Change: The T bar sealing the whites the FRP the equipment I mean, we try to touch at all but we've done five and we've seen.

Speaker Change: Seven 2%.

Speaker Change: Increase in sales to $25 three <unk>.

Speaker Change: Percent increase in sales, we had a restaurant Prescott Arizona.

Speaker Change: Everything around it was beautiful, but this old penny sitting I was a beautiful Walmart brand, new Burger King and here's this all Dennis.

Speaker Change: And we remodel I think we spent about $600000 inside outside and we took it from <unk>.

Speaker Change: But once they were closing a 1.3 to almost $2 million.

Speaker Change: And so this is really resonate I think with the consumer they like to see the difference in some of our data.

We model it.

Speaker Change: And it's been very beneficial it's a beautiful remodel looks really good.

Speaker Change: Very helpful actually.

Speaker Change: You'll see a return on investment.

Speaker Change: I wanted to take a good I'm sorry, I wanted just to take a step back and talk about all these initiatives that are rolling out across the system. Obviously, they require some sizable investments in wealth.

Speaker Change: You guys might be able to invest are there are ample options and support coming from the franchise or to enable these investments in a tough.

Speaker Change: Lending environment.

Speaker Change: I'll start with yes, I know the brand has recently come out with a very very strong.

Speaker Change: Program, where.

Speaker Change: You put franchisees if they want to take advantage of that.

Speaker Change: And it's basically a.

Speaker Change: It's kind of a.

Speaker Change: Upfront.

Speaker Change: Payment.

Speaker Change: To the franchisee.

Speaker Change: And then it's a little bit of a payback, it's a payback over a certain period of time, but if you, but it is definitely something that in my view.

Speaker Change: If you're looking to do a remodel a 2.0 is probably the best program I've seen.

Speaker Change: In terms of support from our franchise.

Speaker Change: I think there's also been a.

Speaker Change: An opportunity when you start talking about the technology upgrade and that sort of thing where there's a leasing program that.

Speaker Change: <unk>.

Speaker Change: Franchise or has introduced to the franchisees.

Speaker Change: And I think Youll see we will see a lot of franchisees take advantage of that but it goes back to the franchise or franchisee.

Speaker Change: <unk> system.

Speaker Change: Each case.

Speaker Change: When you have a carrying franchise or.

Speaker Change: Such as such as Dennis.

Speaker Change: It really motivates you and as a franchisee.

Speaker Change: It makes you feel like you're both were at the table together.

Speaker Change: And looking at having a common view.

Speaker Change: <unk>.

Speaker Change: Working together collaboratively.

Speaker Change: To to really take the brand forward.

Speaker Change: Yeah.

Speaker Change: I would just say they've done two things that are kind of unusual in the industry.

Speaker Change: If you needed to finance the new Zinio.

Speaker Change: Basically 100%, though the lender that they lined up we'll go behind your primary lender. So if somebody needs a 100% financing to do the new system. They can and they also.

Speaker Change: Again integrated I don't know if this is Steve done probably.

Speaker Change: Uh huh.

Speaker Change: But on the remodel I gave you a $100000.

Speaker Change: <unk>.