By Orit Naomi, RTN staff writer - 8.8.2025
Full-service restaurant chain Denny’s, with 1,558 restaurants worldwide, comprising 1,474 franchised/licensed locations and 84 company-owned units, is investing heavily in technology to drive customer engagement and improve operational efficiency, with a new digital loyalty program at the center of its strategy. The points-based program, currently in testing and training phases, is expected to launch in the second half of the year and is designed to deliver personalized promotions based on individual guest behavior.
The initiative builds on Denny’s existing database of 5.5 million digital guests, who already visit restaurants twice as often as the average customer. By capturing and leveraging first-party data across channels, the program will allow the company to target guests with offers tailored to their purchase history, visit frequency, and preferred menu items. Executives expect the loyalty program to boost traffic by 50 to 100 basis points over time while contributing to higher-margin sales through more relevant, behavior-driven promotions.
The program will be accessible across Denny’s digital ecosystem, including its website and mobile app, making it easy for customers to join and participate. Rather than relying on broad-based discounts, the company is shifting to a one-to-one marketing model where offers are personalized at scale. This move aligns with a larger trend in the restaurant industry, where brands are increasingly turning to customer data and digital tools to build long-term relationships and increase lifetime value.
Technology is also playing a key role in off-premises growth. Digital ordering and takeout represented approximately 21 percent of total sales during the second quarter. Denny’s is expanding its portfolio of virtual brands to maximize kitchen utilization and tap into additional revenue streams. The company continues to operate The Burger Den, The Melt Down, and Banda Burrito, and has begun testing a virtual hot dog concept in partnership with Franklin Junction. That concept, featuring Nathan’s Famous hot dogs, is now available in more than 70 percent of company-owned restaurants.
The low operational complexity of virtual brands has made them attractive to operators. Minimal added inventory and simple preparation allow kitchens to fulfill incremental orders during slower dayparts, helping to improve overall productivity without requiring significant new investments in labor or equipment.
Keke’s Daytime Café, a sister brand with 74 locations, is also embracing data-driven promotions in partnership with PAR Technology. Its first systemwide campaign offered $5 kids’ meals with the purchase of an adult entrée, targeting summer travel families and increasing weekday traffic. Keke’s posted a 4 percent increase in same-store sales for the second quarter.
Overall results for the quarter reflected some of the challenges facing full-service dining. Denny’s same-store sales declined 1.3 percent, while net income fell to $2.5 million from $3.6 million a year earlier. Revenue rose modestly to $117.7 million. The brand’s largest markets, including Los Angeles, San Francisco, Houston, and Phoenix, experienced more severe economic pressure, which executives say contributed to softer performance during the quarter.
Even as macroeconomic conditions fluctuate, Denny’s is leaning into its digital transformation. The loyalty program, virtual brand expansion, and growing off-premises channels are all part of a broader strategy to make the brand more agile, data-informed, and responsive to changing consumer behavior.
As the restaurant industry grows more competitive, brands like Denny’s are using technology not just to adapt but to differentiate. The coming launch of its personalized loyalty platform could mark a pivotal step in how the company builds customer relationships in a digital-first environment. With scalable tech infrastructure and a clear focus on first-party data, Denny’s is positioning itself to compete more effectively in a landscape where personalization and convenience increasingly define success.
