Denny's

History

Denny's was founded by Harold Butler and Richard Jezak opened Danny's Donuts in Lakewood, California in 1953. In 1955, after Jezak's departure from the then-6-store chain, Butler changed the concept a year later in 1956, shifting it from a donut shop to a coffee shop with store #8. Danny's Donuts was renamed Danny's Coffee Shops and changed its operation to 24 hours. In 1959, to avoid confusion with Los Angeles restaurant chain Coffee Dan's, Butler changed the name from Danny's Coffee Shops to Denny's Coffee Shops. Two years later, in 1961, Denny's Coffee Shops was simply renamed Denny's. The business continued to expand, and by 1981, there were over 1,000 restaurants in all 50 U.S. states. The company absorbed many of the old Sambo's restaurants and used their mid-century design in some of their future restaurants. In 1977, Denny's introduced the still-popular Grand Slam breakfast. In 1994, Denny's became the largest corporate sponsor of Save the Children, a national charity. All but six Denny's closed for the first time ever on Christmas 1988; many of the restaurants were built without locks, and some had reportedly lost their keys.

Denny's main offices were located in La Mirada, California, until 1989. At that time, the office was first moved to Irvine California and subsequently moved to the Spartanburg, South Carolina, headquarters of the parent company Trans World Corporation (TW Corporation) that acquired Denny's in 1987. In 1992, private equity firm, Kohlberg Kravis Roberts acquired a 47% interest in TW Corporation, later known as The Flagstar Companies, and encouraged the company to sell non-core businesses. Eventually, Denny's operations dominated the parent company to such an extent that The Flagstar Companies changed its name again to Denny's Corporation. It now trades on the NASDAQ under the symbol DENN.

From 1990 through 1993, Denny's offered a free meal to anyone on his/her birthday. The offer included a limited number of meal options from a special birthday menu. The promotional ritual began in the 1990s; though occasionally individual franchises had offered it before that time. Because too many people went to the Denny's more than once on their birthdays, the management had to restrict the rules to only one meal per person, per birthday, with proof of legal birth date required though a driver's license, photo ID, or a birth certificate. Since 2009, its restaurants offer a free Birthday Slam on the customer's birthday.

In 1994, Denny's began renovating its stores, with a lighter color scheme; select locations also began serving Baskin-Robbins ice cream for a short time. Houston, Texas, was the test market for the chain-wide renovation.

The Denny's Diner prototype

Some Denny's restaurants employ the "diner" concept, using modular buildings that resemble classic 1950s diners. In May 1997, the first Denny's Classic Diner was opened in Fort Myers, Florida. The diner concept was created by Ron, Marcia, Marc, and Todd York, the principals of Denny's Franchisee SWFRI, Inc. Today, there are about 40 Denny's Diners in the United States. Additionally, there are several diners that resemble the modular buildings but are actually stick construction.

Domestic and international growth

In July 2010, Denny's presence in the United States saw a major expansion when Pilot Flying J started opening Denny's locations inside their Flying J-branded truck stop locations. 123 Pilot Flying J conversions were completed, making Denny's the leading full service restaurant brand in travel centers.

As of the end of 2011, there were a total of 1,685 Denny's restaurants. While the company owns and operates some restaurants, the majority are operated through a franchising model. 1,593 of Denny's 1,685 restaurants are located in the 50 U.S. states (including the District of Columbia), 11 in Puerto Rico, two in Guam, one in Chile, 60 in Canada, five in Mexico, three in Costa Rica, two in Honduras, one in El Salvador, and eight in New Zealand. There is also a Denny's attached to the Holiday Beach Hotel in Otrabanda, Willemstad, Curaçao. Along with the regular Denny's menu, the Curaçao restaurant offers a selection of local ("kriyoyo") dishes. This is also true of the two locations in Guam, which have a separate "Only on Guam" menu featuring Chamorro-style dishes. There are also about 578 Denny's restaurants in Japan operated independently under a license by a subsidiary of Seven & I Holdings since 1984. At least five restaurants are planned to be opened in Poland, starting in 2016.

In June 2012, Denny's opened a location in the Las Américas International Airport, its first location in an airport and its first in the Dominican Republic. In July 2012, Denny's announced it had signed an agreement with a franchisee to open 50 restaurants in southern China over 15 years, beginning in 2013. This makes it Denny's largest international development deal at that time.

On August 29, 2014, Denny's opened its first location in New York City, with some patrons waiting as long as two hours before its official opening to eat there. Located in Lower Manhattan, the location is designed to be more upscale than the typical Denny's, serves alcohol, and offers a location-exclusive $300 Grand Cru Slam, which is the typical Grand Slam Breakfast served with a bottle of Dom Pérignon.

Health inspection records

In October 2004, Dateline NBC aired a segment titled "Dirty Dining", in which the 10 most popular family and casual dining chains in the United States were examined: Applebee's, Bob Evans, Chili's, Denny's, IHOP, Outback Steakhouse, Red Lobster, Ruby Tuesday, TGI Friday's, and Waffle House. As part of the segment, the producers examined the health inspection records for 100 restaurants over 15 months and totaled all of the critical violations, or violations that can result in adverse effects to the customers' health. Denny's had the fewest violations, averaging fewer than one violation per restaurant. Denny's attributes this relative success to its adherence to the principles of Hazard Analysis and Critical Control Points.

Animal welfare efforts

Denny's works with the Humane Society of the United States to address animal welfare issues. In 2008, Denny's began switching to cage-free eggs, and in 2012, the company announced that it will work with its suppliers to move away from the practice of keeping pigs in gestation crates.

Discrimination controversies

During the 1990s, Denny's was involved in a series of discrimination lawsuits involving several cases of servers denying or providing inferior service to racial minorities, especially black customers.

In 1994, Denny's settled a class action lawsuit filed by thousands of black customers who had been refused service, forced to wait longer, or pay more than white customers. The $54.4 million settlement was the largest and broadest under federal public-accommodations laws established thirty years previously to end segregation in restaurants and public spaces.

A black Denny's customer in Sacramento, California was told, in 1995, that he and his friends had to pay up front at the counter upon ordering their meals. He questioned the waitress: "We asked the waitress about it and she said some black guys had been in earlier who made a scene and walked out without paying their bill. So the manager now wanted all blacks to pay up front."

A 1993 incident occurred when six black United States Secret Service agents visited a Denny’s restaurant in Annapolis, Maryland. They were forced to wait an hour for service while their white companions were seated immediately upon entering.

In San Jose, California, in 1994, several black teenagers were refused service unless they agreed to pay in advance.

In 1997, six Asian-American students from Syracuse University visited a local Denny’s restaurant late at night. They waited for more than half an hour as white patrons were regularly served, seated, and offered more helpings. They complained to management and to their server but were forced to leave the establishment by two security guards called by Denny’s management. Then, according to the students, a group of white men came out of Denny's and attacked them and shouted racial epithets. Several of the students were beaten into unconsciousness.

After the $54.4 million settlement, Denny's created a racial sensitivity training program for all employees. Denny's has also made efforts at improving its public relations image by featuring African-Americans in their commercials, including one featuring Sherman Hemsley and Isabel Sanford, both actors from the popular The Jeffersons television series. In 2001, Denny's was chosen by Fortune magazine as the "Best Company for Minorities." In 2006 and 2007, Denny's topped Black Enterprise's "Best 40 Companies for Diversity."

In 2014, a Denny's location in Deming, New Mexico became subjected to a discrimination claim by an LGBT group, alleging that wait staff used homophobic slurs and refused to serve a group of gay, lesbian, and transgender customers who were attending a gay pride celebration. One year later, Denny's agreed to donate $13,000 to Deming Pride, pay $3,250 to a female customer who was subjected to the abusive behavior by wait staff, as well as retrain employees regarding discrimination policies.