Denny'sFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Denny's franchise requires a total initial investment of $255K – $3.1M, including a $30K franchise fee and an ongoing 4.5% royalty[2]. Per the 2025 FDD, average unit revenue was $1.9M[2]. SBA 7(a) loans show a 7.5% charge-off rate across 283 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $255K – $3.1M
- 14th pct Service Resta…
- Avg gross sales
- $1.9M
- 20th pct Service Resta…
- Royalty
- 4.5%
- 6th pct Service Resta…
- Units
- 1,334
- 48th pct Service Resta…
- SBA default
- 7.5%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Franchising since 1963. Systems this mature have refined operations and brand recognition.
The system contracted 5% year-over-year. Investigate why units are closing.
51% cash-on-cash return (based on EBITDA). Above the 20% threshold most investors target.
Large franchise systems benefit from brand recognition, supply chain leverage, and proven operations.
Bottom line
- Total investment $255K – $3.1M including a $30K franchise fee, 4.5% ongoing royalty.
- Average unit revenue of $1.9M/year (median $1.8M), with an estimated 51% cash-on-cash return (based on EBITDA).
- Verdict A (Top Quintile) with a risk score of 46/100. SBA loan charge-off rate of 7.5% across 283 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Bankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- DFO, LLC
- Parent company
- Denny’s Corporation
- Predecessor
- and Affiliates
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 203 East Main Street, Spartanburg, SC 29319
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $206.1M
- vs $200.4M prior year
Overview
About
Denny's franchisees operate full-service casual dining restaurants serving breakfast, lunch, and dinner to families and individual diners. Daily operations include managing kitchen staff, serving customers, handling inventory, maintaining facilities, and ensuring compliance with brand standards across 24-hour or extended-hour operations.
- CEO
- Kelli Valade
- Headquarters
- SC
- Founded
- 1959
- FDD year
- 2025
- States available
- 49
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $50K | $150K |
| Equipment, build-out, other | $175K | $2.9M |
| Total initial investment | $255K | $3.1M |
Source: Denny's 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$201K
10.5% margin
Unlevered ROIC
11%
EBITDA / total invested capital
Payback
8.7 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $255K – $3.1M
- Better than avg vs category
- Liquid capital req'd
- $50K – $150K
- Better than avg vs category
- Franchise fee
- $10K – $30K
- Better than avg vs category
- Royalty
- 4.5%
- Gross Sales · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 7.5%
- vs 9–13% typical
- Payback period
- 2.0 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.5% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Technology fee | $55 |
| Transfer fee | $5K |
| Renewal fee | $10K |
| Total fee load | 7.5% of rev |
Financial Performance
- Avg gross sales
- $1.9M
- Per unit, per year
- Median gross sales
- $1.8M
- Avg ebitda
- $845K
- Reported as EBITDA in FDD Item 19
- Cash-on-cash
- 51.0%
- Based on EBITDA / investment midpoint
- Item 19 type
- ebitda
- Sample size
- 1237 units
- vs category median 13 · large
- Range (low → high)
- $611K→$4.6M
- Cohort dispersion (min → max)
- Transparency tier
- none
- Categorical assessment of disclosure depth
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Denny's Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1,334
- Opened
- 14
- Last reporting year
- Closed
- 83
- Turnover rate
- 6.2%
- Company-owned
- 61
- Corporate units in the system
- % franchised
- 95%
- vs corporate-owned
- Net growth (yr3)
- -5.1%
- Net unit change last year
- 3-yr CAGR
- -7.7%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 11
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 8 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 283
- Loan volume
- $204.8M
- Median loan
- $700K
- 50th percentile
- Charge-off rate
- 7.5%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 96.9%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 72
- Defaults
- 16
Vintage analysis
Denny's charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Denny's's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 12-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Denny's presents caution-level risk due to a shrinking franchise system, unresolved litigation over fee disputes, unprotected territories, and lack of earnings transparency.
Litigation (Item 3)
6 case reference(s): 0 pending, 2 settled.
Largest disclosed settlement: $115,000
Bankruptcy (Item 4)
Disclosed in last 7 years
BANKRUPTCY One proceeding was filed in the US Bankruptcy Court for the District of Arizona under Chapter 13 of the Bankruptcy Code naming Balbair Pal as joint debtor. An order of discharge was granted on June 12, 2020, discharging most debts (Case No. 2-15-bk-13711BKM). No other person identified in
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 46 / 100 rating
- 01MINORSystem declining 5.1% YoY (1,334 units) indicates contraction and potential market saturation
- 02HIGHActive litigation involving breach of contract and royalty disputes suggests franchisor relationship issues
- 03MINORUnprotected territory creates direct competition risk from other Denny's franchisees in same area
- 04MINORWide investment range ($255K-$3M+) and royalty spread (4.5%-7%) lacks transparency on cost drivers
- 05MINORNo Item 19 (Financial Performance Representations) provided — earnings claims cannot be independently verified
- 06MINORHigh royalty burden (up to 7%) against modest net income ($845K avg) pressures unit profitability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Allowed renewalsℹ | 0 |
| Protected territory | No |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | South Carolina |
| Litigation count | 3 |
View Item 3 litigation summary
6 case reference(s): 0 pending, 2 settled.
Items 10, 11
Training & Operations
- Classroom training
- 8 hrs
- On-the-job training
- 400 hrs
- Training location
- On-site and corporate
- Site selection
- franchisor
- Franchisor financing
- Offered
- Item 10
- POS system
- Standard Enterprise Technology Platform (Xenial/Xpient)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Standard Enterprise Technology Platform (Xenial/Xpient)
Item 20 · call current owners
Franchisee Contacts
15 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Denny's · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Denny's franchise?
The total investment to open a Denny's franchise ranges from $255K – $3.1M, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Denny's franchise owners earn?
According to Item 19 of the Denny's FDD, the average gross sales per unit is $1.9M. The median is $1.8M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Denny's's franchise failure rate?
Based on SBA 7(a) loan data, Denny's has a charge-off rate of 7.5% across 283 loans, meaning 7.5% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Denny's franchise locations are there?
As of their most recent FDD filing, Denny's has 1,334 total units in the United States, including 1,273 franchised units and 61 company-owned units. 14 new units were opened in the latest reporting year.
Is Denny's a good franchise to buy?
FranchiseVerdict rates Denny's as a A-grade franchise with a risk score of 46 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.