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Denny’s Franchises: Revenue, Costs & Profits (2023)

Denny’s is an expensive franchise: you will need to invest on average $3,785,459 as a franchisee to open a new Denny’s restaurant. So you may wonder whether this is a good investment.

With over 1,700 restaurants worldwide, Denny’s is a popular franchise with a lot of advantages. But before you invest, make sure to understand the financials too.

In this article we’ll see how much profits you can realistically make with a Denny’s franchise and whether you should invest in this business. Let’s dive in!

Key stats

Franchise fee$70,000
Royalty fee5.8%
Marketing fee10.6%
Investment (mid-point)$3,785,000
Average sales$1,640,000
Sales to investment ratio0.4x
Payback period*15 years
Minimum net worth$1,000,000
Minimum liquid capital$500,000
* using 15% net profit margin
Denny's business plan template

Denny’s Franchise Business Plan

All the stats: startup costs, profits, breakeven, etc.

5-year financial projections built with the FDD

Excellent 4.8/5 based on 70 reviews

Excellent 4.8/5 based on 70 reviews

What is Denny’s?

Denny’s is an American restaurant chain best known for its table-service diner style, with over 1,700 stores in the US and 14 other countries.

Denny’s was founded in 1953 by Harold Butler and Richard Jezak, who opened the first restaurant in Lakewood, California.

Originally, Denny’s opened as a coffee shop known as Danny’s Donuts. It then changed to Denny’s Coffee and later Denny’s, a name by which it is still known to date.

It serves mainly delicious breakfast, lunch, and dinner items.

Denny’s franchising journey started in 1963 and is operated by its parent company, Denny’s Inc., headquartered in Spartanburg, South Carolina, and today over 97% of its restaurants are franchise-owned.

Denny’s franchise: pros and cons

Before starting a Denny’s franchise, here are some of its advantages and disadvantages.


  • Family restaurant: Denny’s brand is known as one of the best American diners with its family-style full-table service. It is the best option for customers who love to hang out and enjoy tasty foods served directly at the table. Overall, it provides a great casual dining experience where customers can socialize as they enjoy their meals.
  • Brand popularity: The Denny’s franchise is well-known and loved by a large segment of the population. It has a presence in all 50 US states and internationally. Denny’s is a great option for families and friends who love hanging out for great dining experiences. New franchisees are guaranteed the opportunity to attract a lot of customers who already identify with the brand.
  • Training and support: the franchisor offers solid training and support for its franchisees to succeed. It trains new franchisees in restaurant management, food and safety, culinary management, and hospitality management.
  • Financing: The franchisor may, under some circumstances, finance the purchase of point-of-sale equipment for franchisees, though it is under no obligation to do this. In addition, Denny’s provides third-party financing arrangements for its franchisees, who may wish to be financed to fund franchise fees, startup costs, equipment, inventory, and expansion.
  • Marketing and advertising: Franchisees can greatly rely on their parent company to market and advertise their products. The brand is known locally and internationally and has a large customer base. New franchisees can take advantage of the company’s established advertising to promote and publicize their local restaurants. This is cheap and effective since franchises can reach huge populations at low costs.


  • Not a passive investment: The Denny’s franchise does not allow for absentee ownership. As a result, it is not a good investment for those seeking passive investment. The franchisor requires the owner to be fully involved in the operations of the restaurant.
  • No territory protection: The franchisor requires franchisees to operate their restaurants from only the locations it grants and approves. It, therefore, does not grant its franchisees any exclusive territory for operations.
  • Competition: The food and beverage industry is growing fast with new market players, and Denny’s brand faces a lot of competition. Some of its competitors are world leaders like Burger King and McDonald’s. Denny’s franchisees also face competition from franchises granted by or controlled by the parent company.

How much does a Denny’s franchise cost?

You would have to invest on average $1,877,482 to open a new Denny’s franchise restaurant. This is the investment for a traditional restaurant format: the “Denny’s Heritage 2.0”.

Indeed, there are 3 kinds of formats of restaurants you can choose from:

  • Denny’s Heritage 2.0: $1,877,482
  • The Den: $565,500
  • Denny’s Travel Center: $1,342,477

The investment amount is an average: indeed, it varies based on many factors such as land and building size, location and development needs; construction, equipment specifications etc.

For example, here is the full breakdown of costs for the most popular format, the Denny’s Heritage 2.0:

Building and equipment cost$1,275,000$2,000,000
Training $0$36,000
Opening inventory$20,000$30,000
Working capital*$100,000$150,000
* 3 months
Denny's business plan template

Denny’s Franchise Business Plan

All the stats: startup costs, profits, breakeven, etc.

5-year financial projections built with the FDD

Excellent 4.8/5 based on 70 reviews

Excellent 4.8/5 based on 70 reviews

How much sales does a Denny’s franchise make?

On average, a Denny’s franchise makes $1,634,549 in sales per year. 

This is the average sales per restaurant for the 1,362 franchised restaurants operating in 2021. This also excludes “The Den” restaurants that are smaller in size, and therefore revenue (only 12 of them in 2021). 

Sales also recovered from their through in 2020 back to their level pre pandemic ($1.6 million).


YearSalesNumber of Restaurants
Source: 2022 FDD

How profitable is a Denny’s franchise?

On average, a Denny’s franchise makes $411,855 in profits per year. This represents a 25% adjusted EBITDA margin.

Yet it’s very important to note that EBITDA isn’t net profit. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is a profitability metric investors use to assess the “true profitability” of a business, excluding non-operating expenses like debt interest, corporate taxes and such.

If we were to look at the profits you will actually earn as a franchisee (and/or a shareholder), we would look at net profit instead.

As per the information available in the FDD, we obtained the following adjusted EBITDA margin:

Profit-and-lossAmount ($)As % of sales
Royalty + marketing fees$(268,558)16.4%
Adjusted EBITDA$411,85525%
* industry average // Source: 2022 FDD

Note that 25% is slightly below the industry average (27-29%) as per our intelligence. This is due to a number of reasons, mainly the high royalty and marketing fees (16.4%).

Is a Denny’s franchise a good investment?

As explained earlier, Denny’s is a very expensive franchise. Indeed, it costs on average $3,785,459 to open a Denny’s franchise. So is it really worth the profits?

We saw that Denny’s have slightly below average profit margins. So if we were to compare the investment cost to net profits (assuming 15% of sales), we find that the payback period (as in, the period it takes to recoup your investment) is 15.4 years. No need to tell you 15 years payback period isn’t great.

As such, Denny’s isn’t the best franchise investment. If you want to open a Denny’s franchise, you should go for multi-unit instead or single-unit to improve your returns.

Yet, note that these numbers are calculated based on average numbers for all Denny’s franchises disclosed in their Franchise Disclosure Document. As such, it’s possible that your restaurant may turn out to be more profitable, and therefore a good investment.

Do you want to invest in a Denny’s franchise? Download our business plan and visualise a pre-built financial plan and many reports on breakeven, payback period, return on investment, and more.

Denny's business plan template

Denny’s Franchise Business Plan

All the stats: startup costs, profits, breakeven, etc.

5-year financial projections built with the FDD

Excellent 4.8/5 based on 70 reviews

Excellent 4.8/5 based on 70 reviews

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)Payback (years)Min. net worth ($)Min. liquid capital ($)
Dunkin' Donuts,0001,056,5211.44.9500,000250,000
Krispy Kreme,0003,400,0004.11.62,000,000300,000
Little Caesars,022,850798,1130.88.5350,000150,000
Steak 'n Shake, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookies,2241,582,0903.12.1300,000150,000
Taco Bell,4131,650,0003.61.91,500,000750,000
Smoothie King,108573,2690.88.0300,000100,000
Jersey Mike's,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakes,6501,307,2802.42.7600,000150,000
Jimmy John's,650874,8451.73.9300,00080,000
Texas Roadhouse,209,5002,955,5340.79.5n.a.200,000
Kung Fu Tea tea250,125353,2371.44.7n.a.25,000
Burger King,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-In,467,0831,617,0001.16.01,000,000500,000
Panera Bread,290,5002,599,4321.15.97,500,0003,000,000
Pizza Hut,575906,9111.06.9700,000350,000
Dairy Queen Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Box,195,8001,755,5030.812.51,000,000250,000
Papa John’s,6951,101,1273.12.1750,000250,000
Five Guys,2251,203,3662.42.8500,000250,000
Carl’s Jr.,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbins Cream465,100316,8150.79.8250,000125,000
Applebee’s American5,137,9662,356,9650.514.51,000,000500,000
Denny's American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy's,174580,4411.35.0275,000125,000
Auntie Anne's,692343,1351.55.6300,000100,000
Firehouse Subs,186888,3561.44.6350,000100,000
Tropical Smoothie Cafe,500961,9692.23.0350,000125,000
Marco’s Pizza,625895,5232.03.3400,000100,000
Cold Stone Creamery Cream310,956417,5881.35.0250,000100,000
Church’s Chicken,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grill,3701,013,3611.35.21,000,000100,000
Tim Hortons,242,7501,188,2401.07.0500,000100,000
Checkers & Rally's,8471,039,7731.25.4750,000250,000
Charleys Philly Steaks,806786,2331.54.3500,000100,000
Buffalo Wild Wings,546,9002,534,1480.79.31,500,000750,000
Rita's Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurants,750851,2121.16.2350,000150,000
Hungry Howie’s Pizza,682806,8991.93.5750,000200,000
McAlister’s Deli,424,9631,865,8611.35.11,000,000500,000
Round Table Pizza,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eats,250972,9621.54.5
Taco John’s,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffee,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagels,075885,0111.25.71,000,000536,500
Great American Cookies,275452,7711.25.7250,000100,000
Wienerschnitzel dogs873,300880,9801.06.6600,000250,000
Blaze Pizza,4501,096,4321.37.9500,000300,000
Wetzel's Pretzels,571748,8572.03.4300,00050,000
Pizza Ranch,268,3001,174,0880.418.61,000,000297,000
Del Taco,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’s, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’s,7781,067,8160.419.01,000,000350,000
Biggby Coffee,575648,3520.320.0300,000100,000
Which Wich,375281,8860.322.2500,000150,000
Marble Slab Creamery Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizza,900865,7130.320.0300,000100,000
Huddle House,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecue,350612,9210.333.3500,000150,000
Chicken Salad Chick, Salads651,0001,202,0200.320.0750,000250,000
Golden Chick,975917,6092.52.62,000,000425,000
Waba Grill,000466,5361.06.51,000,000250,000
Bruster’s Ice Cream Cream663,925466,6960.79.5375,000150,000

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