For 22 years, Keke’s Breakfast Café expanded its Florida footprint through steady, sustainable growth. Now, the brand is ready to blast into hyperdrive following its $82.5 million acquisition by Denny’s last summer.
The deal not only validates the predicted longevity and market potential of the better-breakfast segment, but it also affirms Keke’s standing as a player to watch. Denny’s CEO Kelli Valade has even described the brand’s popularity as a “cult-like following.”
“That following is what gives us confidence in our ability to really grow this brand,” Valade said at the ICR Conference in January. “Keke’s franchisees will continue to grow in Florida, but we know there’s so much potential to go to new markets in 2023 and beyond.”
At present, Keke’s is a Florida-only brand with the highest concentration of locations in the greater Orlando and Tampa areas. Eighty-five percent of its locations are franchised, and that number will only increase as the brand’s growth outside of the Sunshine State attracts new prospects.
Furthermore, leaders expect a fair amount of crossover, with existing Denny’s operators incorporating Keke’s into their portfolios and potentially vice versa.
“We’ve learned a lot and we continue to be impressed with the sophistication and level of the existing Keke’s franchisees. We’re also really excited about the promise of Denny’s franchisees wanting to be involved in Keke’s and this fast-growing segment,” Valade said.
In recent years, Keke’s was averaging about five new openings annually, effectively doubling its unit count between 2016 and 2021. Now with the resources and knowledge base of a legacy brand at its disposal, that number is expected to increase.
For all the enthusiasm and strong sales around daytime eateries like Keke’s, the sector remains sparsely populated at a national level. Most of the larger players are still shy of 100 units and remain concentrated in specific regions.
With AUVs comparable to Denny’s (just shy of $2 million) but only a fourth of the hours of operation, Keke’s is poised to become one of the better-breakfast heavyweights.
“The demand for the daypart eatery segment remains strong, and Keke’s is well-positioned to become a bigger player in a segment that’s pretty fragmented and fractured among many smaller brands,” Valade said at the conference. “With attractive unit economics and the ability to leverage Denny's franchisor model and economies of scale, this has the realistic goal of becoming the franchisor of choice.”