Denny's has tapped former Red Lobster CEO Kelli Valade as its next chief executive and president, putting her in line to succeed longtime CEO John Miller and President Mark Wolfinger, who are both retiring.
The chain also announced plans to acquire 52-unit Keke's Breakfast Cafe for $82.5 million.
Valade surprised many in the industry last month when she resigned from Red Lobster after less than a year in charge. She gave no reason for her departure at the time.
Four days later, Denny's announced Miller was stepping down. Wolfinger's retirement was made public Tuesday.
Valade will fill a considerable void left by Miller and Wolfinger, who spent 11 years and 17 years at the chain, respectively. Her appointment is effective June 13.
"The Denny’s Board of Directors conducted an extensive search to identify a forward-thinking, strategic CEO and president who will build on the successful leadership and growth established by John and Mark," said Brenda Lauderback, chair of Denny’s Board of Directors, in a statement. "In appointing Kelli, we have found a proven leader in the restaurant industry with the right combination of talent and experience to accelerate the current momentum of the Denny’s brand."
Miller and Wolfinger will remain on the board to help with the transition, Denny's said.
Valade has more than 30 years of experience in the restaurant industry. She joined Red Lobster in August after serving as CEO of researcher Black Box Intelligence for more than two years. Before that, she spent most of her career with Chili's parent Brinker International, rising to Chili's brand president in 2016. During her brief tenure at Red Lobster, the 670-unit chain revamped its C-suite, hiring a new CFO and adding the roles of CMO and CIO.
"Denny’s is a world-class brand that has earned the trust and loyalty of generations of guests as the leading family dining restaurant," Valade said in a statement. "I admire the company’s guest-first approach and unwavering purpose of loving to feed people."
As for the Keke's acquisition, Miller said Denny's believes the Orlando-based a.m. dining brand can help the company drive incremental growth.
"Keke’s is a high-growth brand that aligns well with our core competency while providing us with an opportunity to participate in the fast-growing A.M. eatery segment," he said in a statement. "We intend to utilize the proven capabilities of our franchise-focused business model to develop Keke’s across multiple states with the long-term target of becoming the A.M. eatery franchisor of choice."
Founded in 2006, Keke's serves breakfast and lunch made with fresh ingredients. Forty-four of its 52 locations are franchised. Its restaurants have average unit volumes of $1.9 million.
The $82.5 million purchase price represents an EBITDA multiple of approximately 12X, Denny's said. Keke's will operate independently from Denny's with its own leadership.
The 1,640-unit Denny's has thrived under Miller. Total sales are up 18%, to $2.6 billion, over the last 10 years, according to Technomic, and its stock price has increased 238% since he took over after languishing for years.
More recently, the chain has been making a slow recovery from the pandemic. Many of its 24-hour restaurants remain short-staffed and unable to stay open around the clock.
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