The company decided to ‘significantly reduce restaurant level staffing.'

Although off-premises sales at Denny’s have increased significantly, same-store sales are down more than 70 percent compared to last year. 

Denny’s ended Q1 with comp sales down 6.3 percent at U.S. stores. In April, same-store sales dropped 76 percent compared to 2019. 

Average-unit volumes of off-premises business increased 107 percent from February to April, driven by waived delivery fees, new curbside services, and family meal packs. As of May 1, 74 percent of units systemwide were operating via takeout and delivery options. The increase improved comp sales in April, but only slightly. 

Here’s how the chain’s domestic comp sales progressed through April:

  • Week ending April 1: –79 percent
  • Week ending April 8: –78 percent
  • Week ending April 15: –76 percent
  • Week ending April 22: –72 percent

As a result, Denny’s “significantly reduced restaurant level staffing” and furloughed more than 25 percent of the corporate office. The company said it “meaningfully reduced compensation” for the board of directors and multiple levels of management. The chain also suspended travel, canceled in-person field meetings, and placed holds on open positions. 

The company did not indicate its timeline of reopening dining rooms as more states reopen, but it did note that additional training materials have been provided to the system “in anticipation of dine-in service restrictions starting to ease and additional health and safety measures that will be implemented as they do.”

“These materials remain focused on the safety and wellbeing of guests, restaurant teams, employees and suppliers as Denny’s restaurants prepare for social-distancing standards in their dining rooms,” the brand said in a statement. 

To assist franchisees, Denny’s deferred remodels, royalty fees, and advertising fees for one week, provided abatement of royalty and advertising fees for two weeks, and implemented 12 weeks of rent deferral for locations where it owns the property. 

The brand secured abatements or deferrals for 70 percent of the locations where it doesn’t own the property, including situations where the company subleases to franchisees. Denny’s also worked with vendors and franchise lenders to secure financial relief. Franchisees representing more than half of U.S. units have received funding from the Paycheck Protection Program. 

The company has $51.1 million in cash on hand, with $43.6 million remaining under its revolving credit facility. Denny’s will announce its Q1 earnings on May 14. 

Casual Dining, Chain Restaurants, Delivery, Feature, Finance, Denny's