Dive Brief:

• Denny’s has appointed Kelli Valade as CEO and president, effective June 13, the company announced Tuesday. Valade will succeed John Miller, who is retiring on Aug. 3, but will retain his position on the board of directors to help ensure a seamless transition.
• Valade brings 30 years of experience, and most recently served as CEO at Red Lobster for less than a year. Prior to that position, she was CEO at Black Box Intelligence from 2019 to 2021 and held various roles within Brinker International. 
• Denny’s joins a growing list of chains, including Starbucks, Darden, Torchy’s Tacos and Wingstop, to announce CEO transitions in recent months.

Dive Insight:

Valade will be taking over at Denny’s during a time of recovery. The company posted an increase in same-store sales of 23.3% during Q1 2022 compared to the previous year’s quarter, according to an earnings release. Hours of operation are also back to 24/7 at about 51% of U.S. locations while 80% of restaurants operated at least 18 hours as of the end of March, Miller said Tuesday during an earnings call. Check growth also helped address inflationary concerns, he said. 

With much of Valade's experience in the full-service space, she will be well positioned to expand the brand and develop strategies to help navigate ongoing inflationary pressures. During her time at Brinker, she helped accelerate growth and drive operational efficiencies, according to the press release. 

“[Valade] brings a proven history of developing and executing bold strategies. She is absolutely the right person for the job, with the energy to not only drive our business forward, but to accelerate our growth,” Miller said.

Valade will also oversee future development of a concept Denny’s just acquired — a 52-unit breakfast concept out of Florida called Keke’s Breakfast Cafe — for $82.5 million, executives announced during the call. The restaurant chain’s demographics include high-income millennials and Gen Z families with kids, he said. Price points tend to be 20% higher than those at Denny’s, which won’t likely result in any cannibalization of Denny’s concepts, he said, adding that the company will support efforts to expand the concept.

The company is currently in the midst of deploying various strategic initiatives as well, including implementing new equipment to improve food quality, such as making bacon crispier, Miller said. New equipment has been installed in 300 domestic locations. A new cloud-based tech platform is also in pilot phase and is expected to be rolled out across its U.S. system next year. 

In addition, Denny’s partnered with Reef technology, opening two ghost kitchens in Baltimore, which will help the company test new demographics in underrepresented metropolitan areas, CFO Robert Verostek said during the call.