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Denny’s Offers Rent and Royalty Abatements to Support Franchisee Recovery

The restaurant chain will forgo $3 million in royalty fees this quarter, according to a Restaurant Business report.

As restaurant franchises try to get back on their feet, franchisors are trying new strategies to support franchisees. In the case of iconic restaurant brand Denny’s, that means dramatically reducing rent and royalty fees.

Restaurant Business reports that Denny’s has opted to forgo $3 million in royalty fees this quarter in a new effort to help franchisees as they continue to navigate the difficulties brought on by COVID-19. Additionally, the brand has negotiated rent abatements or deferrals for 77% of the locations where its name is on the lease, including sites where the location is subleased to franchisees, according to the article. 

Like so many of their franchising industry peers, Denny’s franchisees have also sought other solutions to ease financial woes as locations operate at a lower capacity. 

“Substantially all Denny’s franchisees are pursuing available forms of relief under federal stimulus programs, and franchisees representing approximately 99% of total domestic franchise restaurants have received funding under the Paycheck Protection Program,” the restaurant brand said in a statement announcing the latest concessions. 

As COVID-19 continues to affect operations for brands across industries, franchisors will likely need to continue getting creative in coming up with solutions, both in the short term and the long term, to support franchisees as everyone works to stay afloat. After all, the primary benefit of franchising is the franchisor’s support through thick and thin. Franchisors and franchisees will always remember the good times, but when events such as COVID-19 take place and negatively affect business, franchisees’ memories will be especially long. 

Read the full report at Restaurant Business