Operations

Denny's inks a 250-unit deal with ghost-kitchen specialist Franklin Junction

The diner chain also announced preliminary sales results for Q4, with comps rising 1.5% for franchised units and sliding 1.2% at corporate stores.
Denny's described the deal as "expansive." | Photo: Shutterstock

Denny’s is deepening its reliance on ghost kitchens through what it terms an expansive deal with the matchmaking company Franklin Junction.

Franklin serves as a middleman between concepts that are eager to expand their sales turf without developing more restaurants, and operations willing to rent out their kitchens during downtimes. The back-of-house facilities, or ghost kitchens, are retained to produce items that are sold through digital channels under the other party’s brand name, usually for takeout or delivery.

The deal involves about 250 domestic Denny’s units, the diner chain revealed. But the announcement did not say if those stores would serve as ghost kitchens for other Franklin partners, or if they will be the ones hunting for ghost kitchens. Third-party facilities could be used for the chain’s two virtual brands, Burger Den and The Melt Down.

Those two brands, launched by Denny’s during the pandemic, are busiest after breakfast, the key daypart for the company’s namesake brand.

Denny’s did not respond by press time to a request for clarification.

The company now has a second brick-and-mortar concept, Keke’s. The announcement indicated that the fledgling chain, currently concentrated in Florida, would not be part of the arrangement with Franklin.

Announcement of the deal came hours after Denny’s released preliminary financial results for the fourth quarter and fiscal 2023. Systemwide same-store sales rose 1.3% for the quarter and 3.5% for the year, the company said. Franchised units outpaced company stores, with comps of 1.5% and -1.2%, respectively, for the quarter, and 3.6% and 2.7% for the year.

The company did not reveal how pricing or traffic trends factored into the same-store results.

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