Denny's to Begin Converting Flying J Travel Center Restaurants
Potential to Convert Up to 140 Sites
SPARTANBURG, S.C. (BUSINESS WIRE) -- Denny's Corporation (Nasdaq: DENN) today announced that it will begin converting the restaurant operations of up to 140 Flying J Travel Centers ("Flying J") to Denny's units starting in July 2010.
As previously announced in March 2010, Denny's has been selected as the full-service restaurant operator of choice for Pilot Travel Centers LLC ("Pilot"). On June 30, 2010 the Federal Trade Commission approved the merger of Pilot and Flying J enabling the agreement with Denny's to proceed. Now named Pilot Flying J, the company is North America's largest retail operator of travel centers.
Denny's expects to have 80 sites converted by year end 2010, including 10 sites which will operate as company restaurants. The balance of the conversion opportunities are expected to open as Denny's in 2011. On an annualized basis the full potential of conversions are expected to add an estimated 7% to 8% to Denny's system-wide sales. Denny's franchisees will convert and operate most of the Flying J locations with the Company planning to convert and operate approximately fifteen of the restaurants. The capital outlay is expected to be approximately $565,000 per conversion. Existing employees will generally remain in place.
Denny's has also arranged a program through Pinnacle Commercial Capital to provide access to $40 million in credit facilities for Denny's franchisees.
Denny's will provide further detail on the conversions and provide updated full-year financial guidance on its second quarter 2010 Earnings Call, scheduled for August 3, 2010.
About Pilot Flying J
Pilot Flying J is headquartered in Knoxville, Tennessee, and has more than 550 interstate travel center and travel plaza locations in North America. The company employs more than 20,000 people and is the largest retail operator of travel centers in North America.
About Pinnacle Commercial Capital
Pinnacle Commercial Capital is a specialty commercial finance company, based in Indianapolis, and is focused on providing loan products for the complete range of growth opportunities for owners, franchisees and investors in branded retail businesses. Pinnacle has provided business and franchise financing nationally to operators of quick service and casual dining restaurants in addition to other retail outlets.
Denny's is one of America's largest full-service family restaurant chains, consisting of 1,322 franchised and licensed units and 237 company-owned units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. For further information on Denny's, including news releases, links to SEC filings and other financial information, please visit the Denny's investor relations website.
The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release.In addition, certain matters discussed in this release may constitute forward-looking statements.These forward-looking statements involve risks, uncertainties, and other factors that may cause the actual performance of Denny's Corporation, its subsidiaries and underlying restaurants to be materially different from the performance indicated or implied by such statements.Words such as "expects", "anticipates", "believes", "intends", "plans", "hopes", and variations of such words and similar expressions are intended to identify such forward-looking statements.Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others:the competitive pressures from within the restaurant industry; the level of success of the Company's strategic and operating initiatives, advertising and promotional efforts; adverse publicity; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy, particularly at the retail level; political environment (including acts of war and terrorism); and other factors from time to time set forth in the Company's SEC reports, including but not limited to the discussion in Management's Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company's Annual Report on Form 10-K for the year ended December 30, 2009 (and in the Company's subsequent quarterly reports on Form 10-Q).
SOURCE: Denny's Corporation