Monday June 24, 2019, 00:00:00

DENN 2019 Franchise Disclosure Document Review for Denny’s

By Mark Kalinowski

Not too long ago, Denny’s (DENN; Buy) filed its 400+ page Franchise Disclosure Document (FDD) for 2019. In this report, we cite some of the highlights from that document following our review of it, including our review of it in comparison to last year’s Franchise Disclosure Document. For example, the 2019 FDD reveals that Denny’s is testing Presto, providing these details: “Presto is a table top ordering option that we are testing in 2019. The cost for 30 tablets is $15,000 that includes the tablets and three years of software services. Presto does not offer financing but has financing partners. These partners may offer leases to franchisees for three or four years with an option to purchase the tablets at the end of term. In addition to the ability for customers to pay their check using the tablet, games are offered. The current price is $1.99 for unlimited game play during a single visit. Restaurants maintain 80% of profits from game play with 20% being paid to Presto. The Presto charges will be billed monthly through your franchise finance account.”

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Monday June 3, 2019, 00:00:00

Updating our Q2E19 Kalinowski Family Dining Same-Store Sales Index (Again)

By Mark Kalinowski

With this report, we increase our data-driven Kalinowski Family Dining Index for Q2E for the second time this quarter. This time, we increase the figure by +60 basis points, to +3.0%. Our updated figure is based on our latest proprietary checks/data as regards same-store sales performance for this segment over the course of May 2019.

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Monday June 3, 2019, 00:00:00

DENN CHANGING OUR RATING ON DENNY’S TO…

By Mark Kalinowski

With this report, we upgrade the shares of Denny’s (DENN) to Buy (from Neutral). Our ratings change is due primarily to improving same-store sales trends in the familydining sector, of which we believe Denny’s has been a beneficiary during Q2. As a result, we increase our Q2E same-store sales forecast for U.S. systemwide Denny’s by +100 basis points, to +2.8%, placing us as the new “high-on-the-sell-side” forecast according to Consensus Metrix data. We are now also 70 basis points above sellside consensus (although we expect consensus to move up a bit once our raised estimate becomes reflected in consensus).

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