How Denny’s Cooked Up $50M in (Almost) Free Publicity

Denny’s was once the chain restaurant king of breakfast, ’til McDonald’s came along and stole the crown.  Today, 1550 unit Denny’s  grandslamdoesn’t even rank in the top 5 in the $83 billion breakfast market (McDonald’s, Starbucks, Dunkin’ Donuts, Burger King, and IHOP).

To make matters worse, franchise unit sales were down 7.2% last quarter - a time when its value positioning should be giving it a boost.

So Denny’s hatched a bold plan to get some attention. 

On Tuesday, February 3, they gave away a Grand Slam breakfast to anyone who showed up at all but two of its 1,550 restaurants nationwide. (The Grand Slam includes two eggs, two strips of bacon, two sausages and two pancakes and normally sells for $5.99.)

According to an article in USA Today, Denny’s invested about $5 million on the entire promotion, including food costs, labor costs and airing a :30 commercial on Sunday’s Super Bowl.

"We’re re-acquainting America with Denny’s," says CEO Nelson Marchioli. "We’ve never been thanked this much — and folks are saying they’ll come back."

The gambit earned Denny’s something that money alone can’t buy: positive public relations, and lots of it. By Denny’s estimates, it got $50 million in free news coverage, almost all of it positive. No injuries — or police issues — were reported at any locations, say Denny’s officials.

Marchioli implied that they made up quite a bit of their costs on high-margin beverages not included in the Grand Slam giveaway.  "…he concedes: If you factor in the profits from all of Tuesday’s drink orders — which are far more profitable than food orders — ‘we’ll do better than break even.’  And, yes, he just may do it again."