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An important letter swap, honoring a baseball legend, and innovating in the fight against IHOP. Denny's may not be the cultural landmark it once was, but the story of how it got to where it is today is a fascinating bit of history.
Transcript
00:00An important letter swap, honoring a baseball legend, and innovating in the fight against
00:05IHOP. Denny's may not be the cultural landmark it once was, but the story of how it got to
00:09where it is today is a fascinating bit of history.
00:13The Denny's Diner that we all know today didn't burst out of the gate as a 24-hour option
00:17to fill up on breakfast food. Its history begins in 1953, when a humble bakery called
00:22Danny's Donuts launched in Lakewood, California. The menu contained donuts, coffee, and a serving
00:28of hospitality that came free with every order.
00:30Proprietors Richard Jezak and Harold Butler bought the first location, and added several
00:35other locations over several years. Harold Butler eventually transformed the early concept
00:40of Danny's Donuts into Winchell's Donut House, a West Coast confectionery contender that
00:44gave Dunkin' a run for its donuts in the 1970s.
00:47While there are still plenty of Winchell's locations in operation in California that
00:51prove out Butler's concept, Danny's Donuts would quickly evolve a step closer to becoming
00:55the Denny's that's become famous throughout the world.
00:58In 1956, Danny's Donuts turned into a 24-hour operation to provide refreshments for the
01:03round-the-clock workforce operating the Douglas Aircraft Factory. This was the first of several
01:08lasting features that would eventually turn the burgeoning chain into an anytime diner.
01:12The undeniable convenience and availability helped the original location gain a foothold
01:17on the local landscape, fed by a steady flow of locals in need of sustenance at all hours.
01:22The hours of operation weren't the only change made in this era. To prevent confusion between
01:26Danny's and Coffee Dan's, another 24-hour coffee shop operation, the name changed to
01:31Denny's in 1961. It was all uphill from there, and by 1996, there were over 100 Denny's restaurants.
01:38With a mix of franchises and company-owned locations, the expansion jumped on the new
01:42wave of consumers who were too busy to cook and were on the lookout for fast, fresh food
01:47to savor.
01:48I love to get out of the kitchen, and Denny's is a great place to come for dinner."
01:52By the end of the 1960s, the number of Denny's locations had reached the 500-plus mark, with
01:57growth continuing into the new decade.
02:00It wasn't enough for Denny's to conquer America. The chain set its sights on other regions
02:04of the world, starting with an Acapulco location, which opened in 1967. This expansion signaled
02:10Denny's intention of bringing American-style diner fare to a global audience. Now Denny's
02:14could grow beyond the borders of the U.S., capitalizing on a simple, dependable format
02:19that was fast becoming a darling on the domestic dining scene, a trend that would continue
02:23well into the new millennium as Denny's reached South America, the Middle East, and Indonesia.
02:28In 1968, Denny's went public and began trading shares on the New York Stock Exchange.
02:33Taking on outside investors helped fuel growth through the years, and this was the age of
02:37upward growth and outward expansion for the chain. The idea of restaurant eating for busy
02:41families was catching on, and a wholesome atmosphere offering food that emulated home
02:45cooking available around the clock was a concept that consumers ate up with a passion. With
02:50new locations added every year, there was still major growth in store for this former
02:54coffee shop that had taken the dining world by storm.
02:57One of Denny's longest-lasting contributions to the world of dining, the Grand Slam Breakfast,
03:02was introduced in Atlanta, Georgia in 1977 as a tribute to local MLB superstar Hank Aaron.
03:07The order included a roundup of Denny's best items and made them available in a single
03:11priced collection. Now, guests could enjoy two each of Denny's Buttermilk Pancakes, Eggs
03:16of Any Style, Bacon Strips, and Sausage Links all in one generous menu listing instead of
03:20having to order everything a la carte. The fact that it came with a catchy name made
03:24it even easier to spread the word among the dining public.
03:28It was a smash that helped keep Denny's thriving with the dining public while demonstrating
03:31the chain's ability to tap into pop culture to create meaningful connections with customers.
03:36Even guests who had no idea who Hank Aaron was could benefit from the tie-in. The Grand
03:40Slam became so familiar, it led to competitors like IHOP releasing similar catchy-named collections
03:45like their Rooty Tooty Fresh & Fruity in the 1980s.
03:48Regardless of the imitators, Denny's will always be the chain that hit a home run with
03:52its heavy-hitting breakfast roundup.
03:54In less than 20 years, Denny's had gone from a small collection of California coffee shops
03:59to one of the most familiar restaurants in the U.S. This was the era when it seemed like
04:03there was suddenly a Denny's just about everywhere you looked. The proliferation made it easy
04:07to find a sit-down space when fast food felt a little too casual and high dining wasn't
04:11on the menu.
04:13Part of Denny's growth in the 1980s came from the financial troubles of another diner chain
04:17called Sambo's. After filing for bankruptcy and closing down most of its locations, Sambo's
04:21sold 48 restaurants to Denny's in 1982, expanding the company's location count without requiring
04:27new construction.
04:28The decade saw Denny's become a dining standard that was outlasting other diner-style restaurants
04:33— good signs for a chain on the rise.
04:35Everybody likes Denny's. It's an American institution."
04:39Controversy rocked Denny's foundation in the 1990s, with several instances of customer
04:43discrimination resulting in lawsuits for the chain. In 1993, a federal suit was brought
04:48against Denny's after six African-American Secret Service agents dining at a restaurant
04:52in Annapolis, Maryland were kept waiting for service for more than an hour. It was the
04:56third discrimination suit filed against the restaurant within a year's time.
05:00Another class-action lawsuit arose in 1994, accusing Denny's of similar practices. By
05:05the end of 1995, both suits had been settled, with Denny's paying out a total of $54 million
05:10in damages to 295,000 customers.
05:13"'Is it the color of my skin? I mean, that's where I live for that. Is that the problem?'
05:19Though Denny's made changes to its operations, hoping to eliminate these discriminatory practices
05:23among its restaurants, yet another discrimination suit was filed against the company in 2011,
05:28this time focusing on an employee who became disabled after having her leg amputated. Management
05:33refused to allow her to return to work, the employee sued, and Denny's paid $1.3 million
05:38to settle the matter. So, while Denny's was pushing to maintain its status as an all-American
05:43diner, a shadow had settled over the company with headlines that portrayed a change in
05:46fortune for this longtime favorite.
05:49Other outlets like IHOP, Black Bear Diner, and Waffle House gave Denny's a run for its
05:53dining money, pulling in customers with the enticement of menu alternatives and locations
05:57that were well within reach of the hungry public. And if Denny's was where your parents
06:01went for dinner, you probably want a new place to call your own, one that addresses your
06:05appetite on your terms.
06:07By the early 2000s, the dining-out trend was hitting a high point. With the rise of Red
06:11Robin, Chili's, and Applebee's, the concept of the neighborhood diner turned into a more
06:15pub-like blueprint, while Denny's held firm to its old-fashioned diner roots. However,
06:20the idea of eating at an old-fashioned eatery became outdated. With so many shiny, new spots
06:25cropping up around the country offering more refined fare, casual diners had their pick
06:28of places designed to appeal to a younger crowd with contemporary tastes.
06:33The powers that be at Denny's recognized the need to evolve but were leery of straying
06:37too far from the original blueprint. It's a tightrope walk faced by many companies,
06:41but for Denny's, the challenge proved to be multifaceted, expensive, and taxing overall.
06:46And missteps like trying to associate the 24-hour diner with late-night after-party
06:50hipness just seemed like a sad overreach.
06:53The company tried to emulate the fast-casual concept, going so far as to create a secret
06:57menu to generate buzz and dubbing itself America's Diner in 2011. New interiors and exteriors
07:02introduced in 2017 helped update location decor.
07:06As recently as 2020, Denny's launched marketing campaigns that tapped into the chain's retro-casual
07:11potential, emphasizing a return to the comforts of the past with an eye firmly trained on
07:15the future. This rebranding aimed to position Denny's among its contemporaries, pushing
07:20takeout and delivery options as competitive features.
07:23Despite its best efforts to pivot, Denny's 2020 same-store sales showed a 32.9 percent
07:28decrease domestically, though at least part of that percentage could be blamed on the
07:31COVID-19 pandemic. Though the company's earnings and location count had rebounded a bit by
07:362023, Denny's still faces hurdles as it reckons its vintage past with a present driven by
07:41a more youthful demographic.
07:43As of September 2024, former COO Christopher Bode has stepped back into the role after
07:48a stint leading Hardee's in hopes of steering Denny's back to a semblance of its former
07:52glory. Considering the depth of Denny's current sales slump, time will tell if reinstating
07:56a key player brings fresh vision or turns the ongoing evolution stale.
08:01At the same time, the chain has made changes to its core functions that may be counter
08:05to a successful transition into the future. By shifting to a simplified menu and removing
08:09customers' ability to customize their orders, Denny's has eliminated one of its most popular
08:14features. Reintroducing its value menu puts the company on par with fast food favorites
08:18like McDonald's and Carl's Jr., chains that have brought back bargain fare to draw in
08:22diners on a budget.
08:23Further complicating the situation are dynamics like inflation, social shifts toward more
08:27modern menus, and home delivery services like Uber Eats that may have developed too quickly
08:32for Denny's to keep up. After trying to keep up with the pack before circling back to the
08:36original concept, Denny's isn't entirely out of moves. A surprisingly forward-thinking
08:40plan involving two new virtual brands — the Meltdown, focused on the diner's melts, and
08:45the Burger Den, specializing in burgers — sounds like a promising possibility for breathing
08:49new life into the business.
08:51A college campus quick-service outlet called The Den by Denny's is taking aim at the co-ed
08:55crowd as a captive audience in need of fast eats. And an expansion of basic ingredients
08:59to accommodate a more mindful audience is letting Denny's meet diners where they are
09:03— in the present.
09:06For more stories, visit nyseagrant.org

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