- 2023 Franchise 500 Rank
#124 Ranked #119 last year
- Initial investment
$1M - $2.3M
- Units as of 2023
1,588 5% over 3 years
Start a Denny's Franchise | Costs and Requirements
Do you have aspirations of owning your own business? Considering the franchise route? Then you may want to consider Denny’s franchise ownership. Denny’s is known for its 24-hour breakfast, lunch and dinner service, and is a popular option for people looking to own a quick serve restaurant (QSR) franchise.
If you’re a fan of quirky menu items, opening a Denny’s location might be the right venture for you. Keep reading to find out everything you need to know about becoming a Denny’s Inc. franchise owner.
A Little Denny’s History
In 1953, the first Denny's went by “Danny’s Donuts.” Opened in Lakewood, California, Danny’s Donuts’ mission was to serve the best coffee, donuts, and experiences 24 hours a day. Over the next decade, the restaurant underwent a few name changes until the founder, Harold Butler, decided on “Denny’s.”
Denny’s delicious meals and quality dining experience attracted hungry customers. By 1963, Denny's Inc. started franchising, expanding the brand into one of America’s largest and most popular full-service restaurants. The brand was international by 1967, opening a location in Acapulco, Mexico. The following year, Denny’s went public on the NYSE.
As a franchisee, you’ll be part of a global brand that has brought its presence to Canada, New Zealand, Mexico, and the UAE, among others. Denny’s Inc. serves millions of customers each day.
With its family-style food service, Denny's Inc. seeks to provide clients with a casual dining atmosphere where they can enjoy affordable meals. Denny's Inc. focuses on a broad customer segment, and its strategy to rely on the interstate highway system has made it one of the most recognizable restaurant chains in the United States.
Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.
How To Know If You’re Ready To Become a Franchisee
Becoming a business owner takes drive, but it also requires self-reflection. Before you decide whether or not you’re ready to become an owner of America’s diner, answer these essential questions for yourself.
As a franchise business owner, do you:
- Have the drive to work as many hours as it takes to achieve business success?
- Have the stamina to keep going even when the going gets tough?
- Actively listen, communicate, give, and receive feedback well?
- Practice patience and positivity when interacting with others?
- Have what it takes to be a leader and a trainer for your staff?
- Have the bandwidth to be a leader and remain the front person for your business?
- Feel comfortable following the franchisor’s rules, coaching, and advice even if you think your way is better?
- Trust the process and the idea that the franchisor is working to benefit their entire franchise system?
- Possess a real passion for the industry you’re entering?
If most of your answers were “yes,” it looks like you’ve got the temperament to become a franchise owner. Next, it’s time to weigh the pros and cons of owning a franchise to see if it’s the right decision for you.
Pros and Cons of Being a Franchisee
Five benefits of owning a franchise include:
- Roadmap to business success
- Brand name recognition
- Elevated success rate
- Purchase benefits
- Large profit margin potential
Five cons of owning a franchise include:
- Franchisor restrictions: location, construction, design, marketing, and branding
- Franchising may limit opportunities for creativity and new ideas
- Initial startup costs
- Ongoing investment costs
- Franchisors have access to your finances
Ready to move forward? Keep reading to learn why Denny’s could be a good choice for you.
Why You May Want To Start a Denny's Inc. Franchise
Even in a world where fast-food restaurants seem to dominate, customers will still always seek a spot to take their loved ones to sit down and enjoy a good meal. Denny's Inc. offers full table service, providing tasty dishes with few frozen or processed ingredients.
Denny's Inc. offers customers one of the best opportunities to socialize while dining by serving customers directly at the table.
Starting a Denny's Inc. franchise may be a mindful move for a potential franchisee who appreciates the value that ambiance, good food, and quality service add to the dining experience.
With its moderately priced menu, customers visit Denny's to enjoy the classic cuisine, signature sauces, toppings, and dips they may not find elsewhere.
With a Denny's Inc. franchise, you can provide excellent dining experiences to families in your community.
What Might Make a Denny's Inc. Franchise a Good Choice?
When choosing which franchise opportunity is right for you, you should consider the company’s values, focus, and goals. Look over Denny’s guiding principles to see if opening a Denny’s location could be a good fit.
Denny’s began as a place for families to come, feel comfortable, and get a good meal. That is still the goal of Denny’s restaurant today. Denny’s views its visitors as guests rather than customers and wants to welcome everyone with open arms.
The Power of We
Denny’s strives to maintain a welcoming, collaborative, and safe environment for its guests and employees. The corporation believes that everything is better when people work together.
Proud of Heritage
Denny’s is committed to staying true to its roots. It cares about being a classic American diner that serves delicious food at a fair price. Its doors are always open to signify that everyone is always welcome.
Hungry To Win
As a brand, Denny’s is always looking toward the future. It cares about continued growth and focuses on the following:
- Innovative thinking
- Pushing boundaries
Denny’s cares about being open to all, not just to serve but to welcome everyone in. It is committed to diversity, equity, and inclusion.
Everyone matters at Denny’s, no matter their background. Denny’s is committed to social responsibility, and they make an effort to give back to the communities they serve.
The Finances of Franchising
Potential franchisees often wonder how much money it takes to start a franchise location. While you may expect staggering start-up costs, Denny’s proves that the investment can be pretty reasonable — especially if you factor in third-party financing options, which can help cover the franchise fee, startup cost, equipment and inventory.
To be part of the Denny's Inc. team, you should ensure you’re financially ready for the investment of the initial franchise fee and other startup costs. In addition, you should prepare for ongoing fees, including advertising, royalty, and potential renewal fees.
Franchisees must also meet the company's net worth and liquid capital requirements.
While having some experience can help with running a restaurant franchise, Denny’s Inc. prides itself on offering programs that teach you how to thrive. The Franchise Numbers
The brand is built on dedicated Denny's franchisees who continue its mission of serving.
Its current franchise numbers include the following:
- Years in Franchising: 60+
- Number of Franchisees: 220+
- Number of Franchised Restaurants vs. Corporate Owned: 97%
The Franchise Financials
To be considered a potential franchisee with Denny’s, you must meet the financial requirements below.
- Liquid Capital: $500,000
- Net Worth: $1,000,000
- Initial Investment: $1,428,422 - $2,326,537
- Franchise Fee: $30,000
- Franchise Terms: 20 years
- Royalty Fee: 4.5%
- Advertising Fee: 3%
- Training Fees: $5,000 - $36,000
As you can see, Denny’s franchise costs can be a substantial financial commitment. Of course, after the restaurant opening, your gross sales can bring you appealing returns on total investment (depending on site selection and demand).
How To Open a Denny's Inc. Franchise
If you meet Denny’s financial qualifications and are ready to move forward, look at the step-by-step process of becoming a Denny’s franchise owner.
1. Franchising Inquiry Form
You will fill out a preliminary application with your name and contact information and answer a few questions about yourself, your financial qualifications, and your experience. A representative will reach out to you if you are chosen to move forward.
2. Franchise Disclosure Document
Denny’s will provide you with their FDD so you can make sure that you want to move forward.
A comprehensive franchise agreement should include the following:
- Business description and history
- Past or current litigations
- Bankruptcy history
- Financial requirements for investing
- Products and services information
- Proprietary information, copyrights, patents
- Financial statements
3. Franchise Application Packet
This is where you will submit all the details Denny’s will need to see if you qualify to move forward. This packet will include a submission of your financials and a business plan.
When you are gathering information for your business plan, keep in mind that it should include the following:
- Executive summary
- Analysis of target audience, demographics, and market
- Logistics and business operations
- Financial details
If your franchise application packet is approved, Denny’s will move you into the interview process. There will be multiple interviews, so Denny’s can gather a true sense of who you are, what goals you’d like to reach, and how you would fit into their company.
Denny’s is looking for franchisees who:
- Have a passion for maintaining and growing the Denny’s brand
- Practice a growth mindset
- Value meaningful connection and believe in inclusivity
- Have business experience in restaurants, hospitality, or retail
Keep this in mind as you embark on your interview journey. During the process, you should also speak to existing franchisees and ask questions directed to the Denny's Inc. team as part of your due diligence. Gather as much information as you can to be as prepared as possible.
5. Orientation and Management Training
Training will last 10 weeks. If you have an operator or a team you bring to your franchise, they will attend with you. The training program teaches skills for running your restaurant, maximizing performance, and growing your business.
Starting your very own Denny’s franchise is an exciting business opportunity. If you have the financial means to do it and the entrepreneurial motivation, you can build your dream one diner at a time.
Looking for more franchising info? Explore Entrepreneur’s Franchise Center here.
|Franchising Since||1963 (60 years)|
|# of employees at HQ||328|
This company is offering new franchisees throughout the US.
This company is offering new franchisees worldwide.
|# of Units||1,588 (as of 2023)|
Information for Franchisees
Here's what you need to know if you're interested in opening a Denny's franchise.
Financial Requirements & Ongoing Fees
Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
|$1,003,414 - $2,326,574|
Net Worth Requirement
Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company
What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
Term of Agreement
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
|Is franchise term renewable?||No|
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
|Third Party Financing||Denny's has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory|
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
|On-The-Job Training||91 hours|
|Classroom Training||16 hours|
Meetings & Conventions
Security & Safety Procedures
Franchisee Intranet Platform
Additional details about running this franchise.
|Is absentee ownership allowed?||No|
Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
|# of employees required to run||80|
Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Franchise 500 Ranking History
Compare where Denny's landed on this year's Franchise 500 Ranking versus previous years.
Curious to know where Denny's ranked on other franchise lists? Find out below.
Ranked #1 in Miscellaneous Full-Service Restaurants in 2023
Best of the Best
Ranked #124 in 2023
Ranked #42 in 2023
Top Global Franchises
Ranked #27 in 2023
Top Franchises for Diversity, Equity, & Inclusion
Ranked #1 in Miscellaneous Full-Service Restaurants in 2022
Top Food Franchises
Ranked #76 in 2023
Top Brands for Multi-Unit Owners
Are you eager to see what else is out there? Browse franchises that are similar to Denny's.
Related Franchise Content
Catch up on the latest franchise news, trends, and more.
From yummy beverages and meal delivery kits to sports and science, these are the hottest franchise categories.
To become Floor Coverings International top franchisee, Jeffrey Bell had to learn to delegate.
The New Joint Employer Rule Will Crush Franchising As We Know It. Here's What You Can Do to Protect Your Business.
Here's how the NLRB's new Joint Employer Rule redefines the franchisor-franchisee relationship and will alter the $825 billion franchising landscape.
She Was Afraid of Her Company Becoming the 'McDonald's of Mental Healthcare' Until She Realized This
Erin Pash discovered that franchising offered the best of both worlds for therapy practices.
He Opened a Pizza Restaurant to Serve the Native American Community. It Was So Successful He's Opening 20 More.
Dennis Johnson thought that Bemidji, Minnesota needed a place for the surrounding tribes to work, and hang out. He was right.
Based on the trends, we're predicting which categories will be all the rage in 2024. Check out the list.