Denny’s Serves Up Collaborative Leadership

What has emerged from turmoil of free meals and CEO succession in the Denny’s chain is a restaurant network that has become the epitome of collaboration between franchise owners and franchisor. That renewed collaboration is helping the chain turn the corner.

Last month franchisees, the staff of Denny’s Corporation and vendors gathered in San Diego to hold the brand’s annual convention and trade show for franchise owners. The convention highlighted an interesting partnership between the independent Denny’s Franchisee Association (DFA) and franchisor Denny’s Corporation (NASDAQ: DENN). Out of the 1,670 restaurants in the chain, over 70 percent are represented by members of the Denny’s Franchisee Association.

There are over 100 owner groups in the franchise industry. These independent associations thrive because they advance the self-interests of franchised business owners. That’s necessary because franchisors typically aim to expand top-line store sales since they receive royalties on revenues. But franchisees are beholden to maximizing their bottom-line profits. Given that built-in conflict in franchising, the Denny’s system is a lesson in collaboration between these sometimes opposing forces.

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