Denny's Nixes Franchising Plans in China

Denny's has called off plans to open 50 restaurants in China.

Denny's had previously reached a deal with Great China international Group to develop franchise restaurants in southern China, but the two parties mutually agreed to set those aside, Denny's announced today. In July 2012, Denny's said it had signed a deal with Great China International Group to open 50 Denny's restaurants in southern China over the next 15 years. The first restaurant was expected to open this year.

In today's announcement, Denny's CEO John Miller was careful to point out that the company still has visions for Chinese expansion, saying that the company was "actively seeking development partners who share that vision." He reiterated 2013 guidance targeting 40 to 45 new restaurants in the year.

Of Denny's 1,688 locations worldwide, fewer than 100 are located abroad or in U.S. territories. Through late December 2012, more than 90% of locations were franchised, with the remainder company operated. The focus on franchising has been a conscious move by the company's management, and over the last six years company-owned locations have gone from 34% of total locations to the less than 10% of locations seen today.

The company also released its fiscal year 2012 annual results today, with revenues falling for a fifth straight year while earnings increased from the year prior.


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