10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ________________

Commission File Number 0-18051

DENNY’S CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		13-3487402
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
203 East Main Street
Spartanburg,	South Carolina	29319-0001
(Address of principal executive offices)		(Zip Code)

(864) 597-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
$.01 Par Value, Common Stock	DENN	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ý Accelerated Filer ☐ Non-Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No  ý

As of April 28, 2022, 61,712,452 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
Item 1.   Financial Statements (Unaudited)
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Comprehensive Income	5
Consolidated Statements of Shareholders' Deficit	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8
Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.   Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.   Controls and Procedures	25
PART II - OTHER INFORMATION
Item 1.   Legal Proceedings	26
Item 1A.   Risk Factors	26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 6.   Exhibits	27
Signatures	28

2

PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

Denny’s Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	March 30, 2022		December 29, 2021
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	6,091	$	30,624
Investments	3,687		2,551
Receivables, net	23,161		19,621
Inventories	9,829		5,060
Assets held for sale	1,322		—
Prepaid and other current assets	7,941		11,393
Total current assets	52,031		69,249
Property, net of accumulated depreciation of $150,914 and $151,836, respectively	89,878		91,176
Financing lease right-of-use assets, net of accumulated amortization of $9,772 and $11,210, respectively	7,399		7,709
Operating lease right-of-use assets, net	125,012		128,727
Goodwill	36,884		36,884
Intangible assets, net	49,892		50,226
Deferred financing costs, net	2,813		2,971
Deferred income taxes, net	5,139		11,502
Other noncurrent assets	32,346		37,083
Total assets	$	401,394	$	435,527
Liabilities
Current liabilities:
Current finance lease liabilities	$	1,962	$	1,952
Current operating lease liabilities	15,406		15,829
Accounts payable	12,998		15,595
Other current liabilities	48,524		64,146
Total current liabilities	78,890		97,522
Long-term liabilities:
Long-term debt	171,500		170,000
Noncurrent finance lease liabilities	10,374		10,744
Noncurrent operating lease liabilities	122,470		126,296
Liability for insurance claims, less current portion	7,860		8,438
Other noncurrent liabilities	58,055		87,792
Total long-term liabilities	370,259		403,270
Total liabilities	449,149		500,792
Shareholders' deficit
Common stock $0.01 par value; 135,000 shares authorized; March 30, 2022: 64,457 shares issued and 61,713 outstanding; December 29, 2021: 64,200 shares issued and 62,210 shares outstanding	$	645	$	642
Paid-in capital	137,332		135,596
Deficit	(94,586)		(116,441)
Accumulated other comprehensive loss, net	(48,689)		(54,470)
Treasury stock, at cost, 2,744 and 1,990 shares, respectively	(42,457)		(30,592)
Total shareholders' deficit	(47,755)		(65,265)
Total liabilities and shareholders' deficit	$	401,394	$	435,527

See accompanying notes

3

Denny’s Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands, except per share amounts)
Revenue:
Company restaurant sales	$	43,976	$	33,569
Franchise and license revenue	59,131		47,007
Total operating revenue	103,107		80,576
Costs of company restaurant sales, excluding depreciation and amortization:
Product costs	11,244		8,272
Payroll and benefits	17,086		12,965
Occupancy	3,240		2,850
Other operating expenses	7,055		6,077
Total costs of company restaurant sales	38,625		30,164
Costs of franchise and license revenue, excluding depreciation and amortization	30,669		23,758
General and administrative expenses	16,958		16,947
Depreciation and amortization	3,548		3,661
Operating (gains), losses and other charges, net	—		532
Total operating costs and expenses, net	89,800		75,062
Operating income	13,307		5,514
Interest expense, net	2,960		4,277
Other nonoperating income, net	(19,615)		(30,048)
Income before income taxes	29,962		31,285
Provision for income taxes	8,107		8,104
Net income	$	21,855	$	23,181
Net income per share - basic	$	0.35	$	0.36
Net income per share - diluted	$	0.34	$	0.35
Basic weighted average shares outstanding	63,343		65,251
Diluted weighted average shares outstanding	63,580		65,749

See accompanying notes

4

Denny’s Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Net income	$	21,855	$	23,181
Other comprehensive income, net of tax:
Minimum pension liability adjustment, net of tax of $8 and $10, respectively	24		30
Changes in the fair value of cash flow derivatives, net of tax of $1,673 and $763, respectively	5,015		2,215
Reclassification of cash flow derivatives to interest expense, net of tax of $248 and $255, respectively	742		740
Amortization of unrealized losses related to dedesignated derivatives to interest expense, net of tax of $0 and $31, respectively	—		90
Other comprehensive income	5,781		3,075
Total comprehensive income	$	27,636	$	26,256

See accompanying notes

5

Denny’s Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Deficit

For the Quarter Ended March 30, 2022 and March 31, 2021

(Unaudited)

	Common Stock			Treasury Stock			Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss, Net		Total Shareholders’ Deficit
	Shares	Amount		Shares	Amount
	(In thousands)
Balance, December 29, 2021	64,200	$	642	(1,990)	$	(30,592)	$	135,596	$	(116,441)	$	(54,470)	(65,265)
Net income	—	—		—	—		—		21,855		—		21,855
Other comprehensive income	—	—		—	—		—		—		5,781		5,781
Share-based compensation on equity classified awards, net of withholding tax	—	—		—	—		1,739		—		—		1,739
Purchase of treasury stock	—	—		(754)	(11,865)		—		—		—		(11,865)
Issuance of common stock for share-based compensation	257	3		—	—		(3)		—		—		—
Balance, March 30, 2022	64,457	$	645	(2,744)	$	(42,457)	$	137,332	$	(94,586)	$	(48,689)	$	(47,755)

	Common Stock			Treasury Stock			Paid-in Capital		Deficit		Accumulated Other Comprehensive Loss, Net		Total Shareholders’ Deficit
	Shares	Amount		Shares	Amount
	(In thousands)
Balance, December 30, 2020	63,962	$	640	—	$	—	$	123,833	$	(194,514)	$	(60,405)	$	(130,446)
Net income	—	—		—	—		—		23,181		—		23,181
Other comprehensive income	—	—		—	—		—		—		3,075		3,075
Share-based compensation on equity classified awards, net of withholding tax	—	—		—	—		2,002		—		—		2,002
Issuance of common stock for share-based compensation	153	1		—	—		(1)		—		—		—
Exercise of common stock options	30	—		—	—		116		—		—		116
Balance, March 31, 2021	64,145	$	641	—	$	—	$	125,950	$	(171,333)	$	(57,330)	$	(102,072)

See accompanying notes

6

Denny’s Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Cash flows from operating activities:
Net income	$	21,855	$	23,181
Adjustments to reconcile net income to cash flows provided by (used in) operating activities:
Depreciation and amortization	3,548		3,661
Operating (gains), losses and other charges, net	—		532
Gains and amortization on interest rate swap derivatives, net	(20,253)		(29,733)
Amortization of deferred financing costs	158		344
Losses on investments	65		8
Losses on early termination of debt and leases	24		34
Deferred income tax expense	4,436		4,099
Share-based compensation expense	4,015		3,472
Changes in assets and liabilities:
Receivables	(3,567)		353
Inventories	(4,768)		13
Prepaids and other current assets	3,451		5,294
Other noncurrent assets	4,085		(201)
Operating lease assets and liabilities	(244)		(604)
Accounts payable	(2,405)		1,820
Accrued payroll	(7,475)		(1,704)
Accrued taxes	(1)		(380)
Other accrued liabilities	(7,488)		1,195
Other noncurrent liabilities	(2,500)		(1,149)
Net cash flows provided by (used in) operating activities	(7,064)		10,235
Cash flows from investing activities:
Capital expenditures	(2,778)		(1,583)
Proceeds from sales of restaurants, real estate and other assets	108		1,348
Investment purchases	(1,200)		—
Proceeds from sale of investments	—		200
Collections on notes receivable	67		215
Net cash flows provided by (used in) investing activities	(3,803)		180
Cash flows from financing activities:
Revolver borrowings	13,825		7,500
Revolver payments	(12,325)		(2,500)
Long-term debt payments	(503)		(473)
Proceeds from exercise of stock options	—		116
Tax withholding on share-based payments	(2,165)		(1,309)
Deferred financing costs	—		(8)
Purchase of treasury stock	(12,498)		—
Net bank overdrafts	—		(3,125)
Net cash flows provided by (used in) financing activities	(13,666)		201
Increase (decrease) in cash and cash equivalents	(24,533)		10,616
Cash and cash equivalents at beginning of period	30,624		3,892
Cash and cash equivalents at end of period	$	6,091	$	14,508

See accompanying notes

7

Denny’s Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

Note 1.     Introduction and Basis of Presentation

Denny’s Corporation, or Denny’s or the Company, is one of America’s largest full-service restaurant chains based on number of restaurants. At March 30, 2022, the Denny's brand consisted of 1,634 restaurants, 1,569 of which were franchised/licensed restaurants and 65 of which were company operated.

The global crisis resulting from the spread of coronavirus ("COVID-19") has had a substantial impact on our restaurant operations starting in the quarter ended March 25, 2020 with continuing impacts into the current quarter ended March 30, 2022. While we have seen improvements compared to earlier periods during the COVID-19 pandemic, we cannot currently estimate the duration or future financial impact of the COVID-19 pandemic on our business. Ongoing material adverse effects of the COVID-19 pandemic for an extended period could negatively affect our business, results of operations, liquidity and financial condition and could impact our impairment assessments of accounts receivable, intangible assets, long-lived assets and goodwill.

Our unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, certain information and notes normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of the interim periods presented have been included. Such adjustments are of a normal and recurring nature. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates are reasonable.

These interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto as of and for the fiscal year ended December 29, 2021 which are contained in our audited Annual Report on Form 10-K for the fiscal year ended December 29, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year ending December 28, 2022. Our significant interim accounting policies include the recognition of advertising and marketing costs, generally in proportion to revenue, and the recognition of income taxes using an estimated annual effective rate.

Note 2.     Summary of Significant Accounting Policies

Newly Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which was later clarified in January 2021 by ASU 2021-01, “Reference Rate Reform (Topic 848): Scope”. The guidance provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The Company adopted ASU 2020-04 on March 12, 2020. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on the Company’s consolidated financial position or results of operations. The guidance is effective through December 31, 2022.

Accounting Standards to be Adopted

We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our consolidated financial statements as a result of future adoption.

8

Note 3.     Receivables

Receivables consisted of the following:

	March 30, 2022		December 29, 2021
	(In thousands)
Receivables, net:
Trade accounts receivable from franchisees	$	12,897	$	13,430
Financing receivables from franchisees	2,811		1,027
Vendor receivables	2,803		4,041
Credit card receivables	625		747
Other	4,574		950
Allowance for doubtful accounts	(549)		(574)
Total receivables, net	$	23,161	$	19,621
Other noncurrent assets:
Financing receivables from franchisees	$	252	$	293

Note 4.    Intangible Assets

Intangible assets consisted of the following:

	March 30, 2022				December 29, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Intangible assets with indefinite lives:
Trade names	$	44,087	$	—	$	44,087	$	—
Liquor licenses	120		—		120		—
Intangible assets with definite lives:
Reacquired franchise rights	11,801		6,116		12,218		6,199
Intangible assets, net	$	56,008	$	6,116	$	56,425	$	6,199

Note 5.     Other Current Liabilities

Other current liabilities consisted of the following:

	March 30, 2022		December 29, 2021
	(In thousands)
Accrued payroll	$	13,232	$	20,676
Current portion of liability for insurance claims	3,947		4,285
Accrued taxes	4,532		4,533
Accrued advertising	9,538		15,355
Gift cards	5,818		7,170
Other	11,457		12,127
Other current liabilities	$	48,524	$	64,146

9

Note 6.     Fair Value of Financial Instruments

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

	Total		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Fair value measurements as of March 30, 2022:
Deferred compensation plan investments (1)	$	12,925	$	12,925	$	—	$	—
Interest rate swaps, net (2)	(23,264)		—		(23,264)		—
Investments (3)	3,687		—		3,687		—
Total	$	(6,652)	$	12,925	$	(19,577)	$	—
Fair value measurements as of December 29, 2021:
Deferred compensation plan investments (1)	$	13,726	$	13,726	$	—	$	—
Interest rate swaps (2)	(52,121)		—		(52,121)		—
Investments (3)	2,551		—		2,551		—
Total	$	(35,844)	$	13,726	$	(49,570)	$	—

(1)    The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments and are included in other noncurrent assets in our Consolidated Balance Sheets.

(2)    The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps.

(3)    The fair values of our investments are valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments.

The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The outstanding senior secured revolver is carried at historical cost, which approximates fair value. The fair value of our senior secured revolver approximates its carrying value since it is a variable rate facility (Level 2).

Note 7.     Long-Term Debt

Denny's and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026.

The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of March 30, 2022.

As of March 30, 2022, we had outstanding revolver loans of $171.5 million and outstanding letters of credit under the credit facility of $15.7 million. These balances resulted in unused commitments of $212.8 million as of March 30, 2022 under the credit facility.

As of March 30, 2022, borrowings under the credit facility bore interest at a rate of LIBOR plus 1.75% and the commitment fee, paid on the unused portion of the credit facility, was set to 0.25%.

10

Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 1.98% and 2.09% as of March 30, 2022 and December 29, 2021, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 4.19% and 4.44% as of March 30, 2022 and December 29, 2021, respectively.

Interest Rate Hedges

We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. We initially designated the interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to variable interest payments due on forecasted notional amounts. A summary of our interest rate swaps as of March 30, 2022 is as follows:

Trade Date	Effective Date	Maturity Date	Notional Amount			Fair Value		Fixed Rate
			(In thousands)
Swaps designated as cash flow hedges
March 20, 2015	March 29, 2018	March 31, 2025	$	120,000		$	104	2.44	%
October 1, 2015	March 29, 2018	March 31, 2026	$	50,000		$	(59)	2.46	%
Dedesignated swaps
February 15, 2018	March 31, 2020	December 31, 2033	$	120,000	(1)	$	(23,309)	3.19	%
Total			$	290,000		$	(23,264)

(1)     The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029.

Swaps Designated as Cash Flow Hedges

To the extent the swaps are highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in the Consolidated Statements of Operations but are reported as a component of other comprehensive income. The interest rate swaps entered into in 2015 are designated as cash flow hedges with unrealized gain and losses recorded as a component of accumulated other comprehensive loss, net.

As of March 30, 2022, the fair value of the swaps designated as cash flow hedges was a net asset of less than $0.1 million. One was recorded as an asset of $0.1 million as a component of other noncurrent assets and the other as a liability of $0.1 million as a component of other noncurrent liabilities. The designated swaps have an offsetting amount (before taxes) recorded as a component of accumulated other comprehensive loss, net in our Consolidated Balance Sheets. See Note 13 for amounts recorded in accumulated other comprehensive loss related to interest rate swaps. We expect to reclassify approximately $3.4 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to swaps designated as cash flow hedges during the next twelve months.

Dedesignated Interest Rate Hedges

During the year ended December 30, 2020, we determined that a portion of the underlying cash flows related to our hedging relationship entered into in 2018 (“2018 Swaps”) were no longer probable of occurring over the term of the interest rate swaps. Accordingly, we dedesignated the cash flow relationship and discontinued hedge accounting treatment for the 2018 Swaps. As a result, we reclassified a portion of losses from accumulated other comprehensive loss, net to other nonoperating income, net in our Consolidated Statements of Operations and began amortizing the remaining amounts of unrealized losses related to the 2018 Swaps from accumulated other comprehensive loss, net into our Consolidated Statements of Operations as a component of interest expense, net over the remaining term of the 2018 Swaps. For the quarter ended March 30, 2022, no unrealized losses were reclassified to interest expense, net related to the 2018 Swaps. For the quarter ended March 31, 2021, we reclassified unrealized losses of approximately $0.1 million to interest expense, net related to the 2018 Swaps. At March 30, 2022, approximately $64.2 million (before taxes) of unrealized losses remained in accumulated other comprehensive loss, net. We expect to amortize less than $0.1 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to dedesignated interest rate swaps during the next twelve months.

11

As a result of the dedesignated cash flow relationship related to the 2018 Swaps, changes in the fair value of the 2018 Swaps are recorded as a component of other nonoperating income, net in our Consolidated Statements of Operations. For the quarter ended March 30, 2022, we recorded income of approximately $20.3 million as a component of other nonoperating income, net related to the 2018 Swaps resulting from changes in fair value. For the quarter ended March 31, 2021, we recorded income of approximately $29.9 million as a component of other nonoperating income, net related to the 2018 Swaps resulting from changes in fair value. As of March 30, 2022, the fair value of the dedesignated interest rate swaps was a liability of $23.3 million, $0.3 million of which was recorded as a component of other current liabilities and $23.0 million of which was recorded as a component of other noncurrent liabilities in our Consolidated Balance Sheets.

Note 8.     Revenues

Our revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channel and type of good or service:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Company restaurant sales	$	43,976	$	33,569
Franchise and license revenue:
Royalties	26,525		20,844
Advertising revenue	18,206		14,111
Initial and other fees	4,507		1,838
Occupancy revenue	9,893		10,214
Franchise and license revenue	59,131		47,007
Total operating revenue	$	103,107	$	80,576

Franchise occupancy revenue consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Operating lease revenue	$	7,418	$	7,913
Variable lease revenue	2,475		2,301
Total occupancy revenue	$	9,893	$	10,214

Balances related to contracts with customers consist of receivables, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables.

The components of the change in deferred franchise revenue are as follows:

	(In thousands)
Balance, December 29, 2021	$	19,896
Fees received from franchisees	1,199
Franchisee deferred costs (1)	(626)
Revenue recognized, net (2)	(739)
Balance, March 30, 2022	19,730
Less current portion included in other current liabilities	1,928
Deferred franchise revenue included in other noncurrent liabilities	$	17,802

(1)    Deferred costs are contract assets consisting of incentives given to franchisees related to the rollout of kitchen equipment to all franchise locations.

(2)    Of this amount $0.6 million was included in the deferred franchise revenue balance as of December 29, 2021.

12

Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that we will begin amortizing into revenue when the related restaurants are opened net of certain deferred costs. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising.

The Company has entered into equipment purchase contracts of approximately $18.3 million related to the rollout of kitchen equipment for franchise restaurants, which will be paid by the franchisees as the equipment is installed, less approximately $5.7 million in commitments from the Company. Amounts committed from the Company are contract assets that have been netted against deferred revenue and will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreement. At March 30, 2022, our remaining obligation under these contracts was approximately $9.2 million, $1.6 million of which is included in accounts payable. At March 30, 2022, we had approximately $8.4 million in inventory and $0.7 million in contract assets related to the kitchen equipment rollout.

Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to our customers. The balance of deferred gift card liabilities as of March 30, 2022 and December 29, 2021 was $5.8 million and $7.2 million, respectively. During the quarter ended March 30, 2022, we recognized revenue of $0.2 million from gift card redemptions at company restaurants.

Note 9.     Operating (Gains), Losses and Other Charges, Net

Operating (gains), losses and other charges, net consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Gains on sales of assets and other, net	$	(146)	$	(942)
Restructuring charges and exit costs	146		1,474
Operating (gains), losses and other charges, net	$	—	$	532

As of March 30, 2022, we had recorded assets held for sale at their carrying amount of $1.3 million (consisting of property of $1.0 million and other assets of $0.3 million) related to three parcels of real estate. There were no assets held for sale recorded as of December 29, 2021.

Restructuring charges and exit costs consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Exit costs	$	12	$	82
Severance and other restructuring charges	134		1,392
Total restructuring charges and exit costs	$	146	$	1,474

Exit costs primarily consist of costs related to closed restaurants. Exit cost liabilities related to lease costs are included as a component of operating lease liabilities in our Consolidated Balance Sheets.

As of March 30, 2022 and December 29, 2021, we had accrued severance and other restructuring charges of $0.1 million and $0.1 million, respectively. The balance as of March 30, 2022 is expected to be paid during the next 12 months.

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Note 10.     Share-Based Compensation

Total share-based compensation included as a component of general and administrative expenses was as follows:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Employee share awards	$	3,794	$	3,253
Restricted stock units for board members	221		219
Total share-based compensation	$	4,015	$	3,472

Employee Share Awards

During the quarter ended March 30, 2022, we granted certain employees approximately 233,000 performance share units ("PSUs") with a grant date fair value of $24.51 per share that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and approximately 233,000 PSUs with a grant date fair value of $15.59 per share that vest based on our Adjusted EPS growth rate versus plan, as defined under the terms of the award. As the TSR based PSUs contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value. The performance period for these PSUs is the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. The PSUs will completely vest and be earned at the end of the performance period at which point the relative TSR and Adjusted EPS growth rate achievement percentages will be applied to the vested units (from 0% to 200% of the target award). We recognize compensation cost associated with approximately 312,000 of these PSU awards over the entire performance period on a straight-line basis, with compensation cost for the remaining 154,000 PSU awards recognized on a graded-vesting basis due to the accelerated vesting terms for certain retirement eligible individuals.

We also granted certain employees approximately 310,000 restricted stock units ("RSUs") with a grant date fair value of $15.59 per share. The RSUs vest evenly over the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. We recognize compensation cost associated with these RSU awards on a straight-line basis over the entire performance period of the award.

During the quarter ended March 30, 2022, we issued 257,000 shares of common stock related to vested PSUs and RSUs. In addition, approximately 24,000 shares of common stock were deferred and approximately 136,000 shares of common stock were withheld in lieu of taxes related to vested PSUs and RSUs.

As of March 30, 2022, we had approximately $22.9 million of unrecognized compensation cost related to unvested PSU awards and RSU awards outstanding, which have a weighted average remaining contractual term of 2.3 years.

Restricted Stock Units for Board Members

As of March 30, 2022, we had approximately $0.1 million of unrecognized compensation cost related to unvested RSU awards outstanding, which have a weighted average remaining contractual term of 0.2 years.

Note 11.     Income Taxes

The effective income tax rate was 27.1% for the quarter ended March 30, 2022, compared to 25.9% for the prior year period.

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Note 12.     Net Income Per Share

The amounts used for the basic and diluted net income per share calculations are summarized below:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands, except per share amounts)
Net income	$	21,855	$	23,181
Weighted average shares outstanding - basic	63,343		65,251
Effect of dilutive share-based compensation awards	237		498
Weighted average shares outstanding - diluted	63,580		65,749
Net income per share - basic	$	0.35	$	0.36
Net income per share - diluted	$	0.34	$	0.35
Anti-dilutive share-based compensation awards	829		273

Note 13.     Shareholders' Deficit

Share Repurchases

Our credit facility permits the repurchase of Denny’s stock and the payment of cash dividends subject to certain limitations. Our Board of Directors approves share repurchases of our common stock. Under these authorizations, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions. Currently, we are operating under a $250 million share repurchase authorization approved by the Board of Directors in December 2019.

During the quarter ended March 30, 2022, we repurchased a total of 0.8 million shares of our common stock for approximately $11.9 million. This brings the total amount repurchased under the current authorization to approximately $44.5 million, leaving approximately $205.5 million that can be used to repurchase our common stock under this authorization as of March 30, 2022. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statement of Shareholders' Deficit.

As of March 30, 2022, 2.7 million shares were held in treasury stock.

15

Accumulated Other Comprehensive Loss, Net

The components of the change in accumulated other comprehensive loss, net were as follows:

	Defined Benefit Plans		Derivatives		Accumulated Other Comprehensive Loss, Net
	(In thousands)
Balance as of December 29, 2021	$	(900)	$	(53,570)	$	(54,470)
Amortization of net loss (1)	32		—		32
Changes in the fair value of cash flow derivatives	—		6,688		6,688
Reclassification of cash flow derivatives to interest expense, net (2)	—		990		990
Income tax expense related to items of other comprehensive income	(8)		(1,921)		(1,929)
Balance as of March 30, 2022	$	(876)	$	(47,813)	$	(48,689)

(1)    Before-tax amount related to our defined benefit plans that was reclassified from accumulated other comprehensive loss, net and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Operations during the quarter ended March 30, 2022.

(2)    Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statements of Operations represent payments either received from or made to the counterparty for the interest rate swaps. See Note 7 for additional details.

Note 14.     Commitments and Contingencies

Legal Proceedings

There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect our consolidated results of operations or financial position. 

Note 15.     Supplemental Cash Flow Information

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Income taxes paid, net	$	449	$	421
Interest paid	$	2,849	$	4,743
Noncash investing and financing activities:
Issuance of common stock, pursuant to share-based compensation plans	$	4,081	$	2,435
Execution of finance leases	$	133	$	—

Note 16. Subsequent Event

On May 3, 2022, the Company entered into an Asset Purchase Agreement, by and between the Company, as purchaser, and K2 Restaurants, Inc. together with the other sellers and principals party thereto (the "Purchase Agreement") for the acquisition of certain assets and assumption of certain liabilities of the franchise business, Keke's Breakfast Cafe ("Keke's"), and eight Keke’s restaurants owned and operated by the sellers (the "Acquisition"). The Company anticipates that the Acquisition will close during the Company’s second fiscal quarter of 2022.

The aggregate consideration payable to Keke's equityholders will be $82,500,000, payable in cash, subject to certain adjustments. The Company expects to fund the purchase price with a combination of cash on hand and funds available under its existing credit agreement.

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Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. The Company urges caution in considering its current trends and any outlook on its operations and financial results disclosed in this report. In addition, certain matters discussed in this report may constitute forward-looking statements. These forward-looking statements, which reflect management's best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny’s Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements. Words such as “expect”, “anticipate”, “believe”, “intend”, “plan”, “hope”, "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events. Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: the evolving COVID-19 pandemic and related containment measures, including the potential for further operational disruption from government mandates affecting restaurants; economic, public health and political conditions that impact consumer confidence and spending, including COVID-19; commodity and labor inflation; the ability to effectively staff restaurants; our ability to maintain adequate levels of liquidity for our cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of our customers, suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; our ability to successfully complete the acquisition and subsequent integration of Keke's Breakfast Cafe; the level of success of our operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses, or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment and geopolitical events (including acts of war and terrorism); and other factors from time to time set forth in the Company’s SEC reports and other filings, including but not limited to the discussion in Management’s Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 29, 2021, this report on Form 10-Q and in the Company's subsequent quarterly reports on Form 10-Q.

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Statements of Operations

The following table contains information derived from our Consolidated Statements of Operations expressed as a percentage of total operating revenue, except as noted below. Percentages may not add due to rounding.

	Quarter Ended
	March 30, 2022					March 31, 2021
	(Dollars in thousands)
Revenue:
Company restaurant sales	$	43,976		42.7	%	$	33,569		41.7	%
Franchise and license revenue	59,131			57.3	%	47,007			58.3	%
Total operating revenue	103,107			100.0	%	80,576			100.0	%
Costs of company restaurant sales, excluding depreciation and amortization (a):
Product costs	11,244			25.6	%	8,272			24.6	%
Payroll and benefits	17,086			38.9	%	12,965			38.6	%
Occupancy	3,240			7.4	%	2,850			8.5	%
Other operating expenses	7,055			16.0	%	6,077			18.1	%
Total costs of company restaurant sales	38,625			87.8	%	30,164			89.9	%
Costs of franchise and license revenue, excluding depreciation and amortization (a)	30,669			51.9	%	23,758			50.5	%
General and administrative expenses	16,958			16.4	%	16,947			21.0	%
Depreciation and amortization	3,548			3.4	%	3,661			4.5	%
Operating (gains), losses and other charges, net	—			—	%	532			0.7	%
Total operating costs and expenses, net	89,800			87.1	%	75,062			93.2	%
Operating income	13,307			12.9	%	5,514			6.8	%
Interest expense, net	2,960			2.9	%	4,277			5.3	%
Other nonoperating income, net	(19,615)			(19.0)	%	(30,048)			(37.3)	%
Income before income taxes	29,962			29.1	%	31,285			38.8	%
Provision for income taxes	8,107			7.9	%	8,104			10.1	%
Net income	$	21,855		21.2	%	$	23,181		28.8	%
Other Data:
Company average unit sales	$	682				$	523
Franchise average unit sales	$	404				$	326
Company equivalent units (b)	64					64
Franchise equivalent units (b)	1,572					1,583
Company same-store sales increase (decrease) vs. prior year (c)(d)	30.6		%			(9.4)		%
Domestic franchise same-store sales increase (decrease) vs. prior year (c)(d)	22.8		%			(9.7)		%

(a)Costs of company restaurant sales percentages are as a percentage of company restaurant sales. Costs of franchise and license revenue percentages are as a percentage of franchise and license revenue. All other percentages are as a percentage of total operating revenue.

(b)Equivalent units are calculated as the weighted average number of units outstanding during a defined time period.

(c)Same-store sales include sales from company restaurants or non-consolidated franchised and licensed restaurants that were open during the comparable periods noted.

(d)Prior year amounts have not been restated for 2022 comparable units.

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Unit Activity

	Quarter Ended
	March 30, 2022	March 31, 2021
Company restaurants, beginning of period	65	65
Units opened	—	—
Units closed	—	—
End of period	65	65
Franchised and licensed restaurants, beginning of period	1,575	1,585
Units opened	5	3
Units closed	(11)	(4)
End of period	1,569	1,584
Total restaurants, end of period	1,634	1,649

Company Restaurant Operations

Company restaurant sales increased $10.4 million, or 31.0%, for the quarter ended March 30, 2022 as compared to the prior year period. The increase in sales was primarily due to easing of prior year period dine-in restrictions and limited operating hours related to the COVID-19 pandemic in addition to current quarter increases in guest check average. Company same-store sales increased 30.6% for the current year quarter as compared to the prior year period.

Total costs of company restaurant sales as a percentage of company restaurant sales were 87.8% for the quarter ended March 30, 2022 compared to 89.9%, for the prior year period.

Product costs were 25.6% of company restaurant sales for the quarter compared to 24.6% for the prior year period, primarily due to increased commodity costs.

Payroll and benefits were 38.9% of company restaurant sales for the quarter compared to 38.6% in the prior year period. For the current quarter, staff payroll increased 2.0 percentage points as a percentage of sales primarily due to labor inflation, partially offset by a 1.8 percentage point decrease in management payroll due to the leveraging effect of higher sales. Additionally, the current quarter included a 0.8 percentage point increase in workers' compensation costs, partially offset by a 0.7 percentage point decrease in group benefit costs.

Occupancy costs were 7.4% of company restaurant sales for the quarter compared to 8.5% in the prior year period. The decrease as a percentage of sales was primarily due to the leveraging effect of higher sales, partially offset by higher percentage rents due to the increase in sales.

Other operating expenses consist of the following amounts and percentages of company restaurant sales: 

	Quarter Ended
	March 30, 2022				March 31, 2021
	(Dollars in thousands)
Utilities	$	1,577	3.6	%	$	1,225	3.6	%
Repairs and maintenance	825		1.9	%	533		1.6	%
Marketing	1,207		2.7	%	967		2.9	%
Other direct costs	3,446		7.8	%	3,352		10.0	%
Other operating expenses	$	7,055	16.0	%	$	6,077	18.1	%

Other direct costs were lower as a percentage of sales due to the leveraging effect of higher sales and a 1.7 percentage point reduction in legal settlement costs.

19

Franchise Operations

Franchise and license revenue and costs of franchise and license revenue consisted of the following amounts and percentages of franchise and license revenue for the periods indicated:

	Quarter Ended
	March 30, 2022				March 31, 2021
	(Dollars in thousands)
Royalties	$	26,525	44.9	%	$	20,844	44.4	%
Advertising revenue	18,206		30.8	%	14,111		30.0	%
Initial and other fees	4,507		7.6	%	1,838		3.9	%
Occupancy revenue	9,893		16.7	%	10,214		21.7	%
Franchise and license revenue	$	59,131	100.0	%	$	47,007	100.0	%
Advertising costs	$	18,206	30.8	%	$	14,111	30.0	%
Occupancy costs	6,377		10.8	%	6,539		13.9	%
Other direct costs	6,086		10.3	%	3,108		6.6	%
Costs of franchise and license revenue	$	30,669	51.9	%	$	23,758	50.5	%

Franchise and license revenue increased $12.1 million, or 25.8%, for the quarter compared to the prior year period. Royalties increased $5.7 million, or 27.3%, for the current quarter compared to the prior year period. Advertising revenue increased $4.1 million, or 29.0%, for the current quarter compared to the prior year period. The increases in royalty and advertising revenue primarily resulted from a 22.8% increase in domestic same-store sales. These increases were partially offset by a decrease of 11 equivalent units for the quarter.

Initial and other fees increased $2.7 million, or 145.2%, for the quarter compared to the prior year period. The increase in initial and other fees primarily resulted from the recognition of $2.2 million of revenue from the sale and installation of kitchen equipment purchased by franchisees. The revenue recorded related to the sale of equipment has an equal and offsetting expense recorded in other direct costs as described below. Occupancy revenue decreased $0.3 million, or 3.1%, for the current quarter compared to the prior year period.

Costs of franchise and license revenue increased $6.9 million, or 29.1%, for the quarter compared to the prior year period. The increase was primarily related to the increase in advertising costs, which corresponded to the related advertising revenue increase noted above. Occupancy costs decreased $0.2 million, or 2.5%, for the current quarter compared to the prior year period. The decreases in occupancy costs for the current quarter primarily resulted from lease terminations, partially offset by increased percentage rent from higher sales. Other direct franchise costs increased $3.0 million, or 95.7%, for the current quarter compared to the prior year period. The increase in other direct franchise costs was primarily due to $2.2 million in expense recorded as part of the rollout of kitchen equipment to franchisees as mentioned above and a $0.5 million increase in franchise administrative costs in the current period. As a result, costs of franchise and license revenue increased to 51.9% for the quarter ended March 30, 2022 from 50.5% for the prior year period.

Other Operating Costs and Expenses

Other operating costs and expenses such as general and administrative expenses and depreciation and amortization expense relate to both company and franchise operations.

20

General and administrative expenses consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Corporate administrative expenses	$	11,383	$	10,872
Share-based compensation	4,015		3,472
Incentive compensation	2,119		2,086
Deferred compensation valuation adjustments	(559)		517
Total general and administrative expenses	$	16,958	$	16,947

Corporate administrative expenses increased $0.5 million for the quarter ended March 30, 2022 compared to the prior year period. The increase for the quarter was primarily due to temporary cost reductions in the prior year related to the COVID-19 pandemic. Share-based compensation increased $0.5 million for the quarter compared to the prior year period. Changes in deferred compensation valuation adjustments have offsetting gains or losses on the underlying nonqualified deferred plan investments included as a component of other non-operating expense (income), net, for the corresponding periods.

Depreciation and amortization consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Depreciation of property and equipment	$	2,647	$	2,715
Amortization of financing lease right-of-use assets	442		428
Amortization of intangible and other assets	459		518
Total depreciation and amortization expense	$	3,548	$	3,661

The decreases in depreciation and amortization expense during the quarter were primarily due to certain assets becoming fully amortized in the prior year.

Operating (gains), losses and other charges, net consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Gains on sales of assets and other, net	$	(146)	$	(942)
Restructuring charges and exit costs	146		1,474
Operating (gains), losses and other charges, net	$	—	$	532

Restructuring charges and exit costs consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Exit costs	$	12	$	82
Severance and other restructuring charges	134		1,392
Total restructuring and exit costs	$	146	$	1,474

Restructuring and exit costs decreased by $1.3 million for the current quarter compared to the prior year period. The decrease for the current quarter was primarily due to prior period relocation costs associated with moving certain employees to our support center in the Dallas, Texas area.

21

Operating income was $13.3 million for the quarter ended March 30, 2022, compared to $5.5 million for the quarter ended March 31, 2021.

Interest expense, net consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Interest on credit facility	$	899	$	1,701
Interest on interest rate swaps	990		995
Interest on financing lease liabilities	607		768
Letters of credit and other fees	309		355
Interest income	(4)		(8)
Total cash interest, net	2,801		3,811
Amortization of deferred financing costs	158		344
Amortization of interest rate swap losses	—		121
Interest accretion on other liabilities	1		1
Total interest expense, net	$	2,960	$	4,277

Total cash interest expense, net decreased by $1.0 million for the current quarter compared to the prior year period. Interest on credit facility borrowings decreased by $0.8 million for the current quarter. This decrease primarily resulted from decreased average borrowings and lower average interest rates in the current quarter compared to the respective prior year period. Interest rates on our borrowings primarily decreased as a result of our credit facility refinancing on August 26, 2021.

Other nonoperating income, net was income of $19.6 million for the current quarter, compared to income of $30.0 million for the prior year period. Other nonoperating income, net for the current quarter primarily consisted of $20.3 million of gains related to valuation adjustments for dedesignated interest rate hedges, partly offset by losses of $0.6 million on deferred compensation plan investments. Prior year other nonoperating income, net for the current quarter primarily consisted of $29.9 million of gains related to interest rate swap valuation adjustments.

Provision for income taxes was $8.1 million for both the current and prior year periods. The effective tax rate was 27.1% for the current quarter compared to 25.9% for the prior year period.

Net income was $21.9 million for the quarter ended March 30, 2022, compared to $23.2 million for the prior year period.

Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are cash generated from operations and borrowings under our credit facility (as described below). Principal uses of cash are operating expenses, capital expenditures and the repurchase of shares of our common stock.

The following table presents a summary of our sources and uses of cash and cash equivalents for the periods indicated:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Net cash provided by (used in) operating activities	$	(7,064)	$	10,235
Net cash provided by (used in) investing activities	(3,803)		180
Net cash provided by (used in) financing activities	(13,666)		201
Increase (decrease) in cash and cash equivalents	$	(24,533)	$	10,616

22

Net cash flows used in operating activities were $7.1 million for the quarter ended March 30, 2022 compared to net cash flows provided by operating activities of $10.2 million for the quarter ended March 31, 2021. The decrease in cash flows provided by (used in) operating activities was primarily due to the timing of prior year accrual payments, collections of receivables and purchases of inventory for our kitchen equipment project. We believe that our estimated cash flows from operations for 2022, combined with our capacity for additional borrowings under our credit facility and cash on hand, will enable us to meet our anticipated cash requirements and fund capital expenditures over the next 12 months.

Net cash flows used in investing activities were $3.8 million for the quarter ended March 30, 2022. These cash flows primarily consisted of capital expenditures of $2.8 million and investments purchases of $1.2 million. Net cash flows provided by investing activities were $0.2 million for the quarter ended March 31, 2021. These cash flows primarily consisted of proceeds from sales of real estate of $1.3 million, proceeds from sales of investments of $0.2 million and collections on notes receivable of $0.2 million, partially offset by capital expenditures of $1.6 million.

Our principal capital requirements have been largely associated with the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Facilities	$	913	$	997
Remodeling	1,310		340
Information technology	214		189
Other	341		57
Capital expenditures	$	2,778	$	1,583

Net cash flows used in financing activities were $13.7 million for the quarter ended March 30, 2022, which included cash payments for stock repurchases of $12.5 million and payments of tax withholding on share-based compensation of $2.2 million, partially offset by net long-term debt borrowings of $1.0 million. Net cash flows provided by financing activities were $0.2 million for the quarter ended March 31, 2021, which included net long-term debt borrowings of $4.5 million, partially offset by net bank overdraft payments of $3.1 million and payments of tax withholdings on share-based compensation of $1.3 million.

Our working capital deficit was $26.9 million at March 30, 2022 compared to $28.3 million at December 29, 2021. We are able to operate with a substantial working capital deficit because (1) restaurant operations and most food service operations are conducted primarily on a cash (and cash equivalent) basis with a low level of accounts receivable, (2) rapid turnover allows for a limited investment in inventories, and (3) accounts payable for food, beverages and supplies usually becomes due after the receipt of cash from the related sales.

Credit Facility

Denny's and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026.

The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of March 30, 2022.

As of March 30, 2022, we had outstanding revolver loans of $171.5 million and outstanding letters of credit under the credit facility of $15.7 million. These balances resulted in unused commitments of $212.8 million as of March 30, 2022 under the credit facility.

As of March 30, 2022, borrowings under the credit facility bore interest at a rate of LIBOR plus 1.75% and the commitment fee, paid on the unused portion of the credit facility, was set to 0.25%.

23

Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 1.98% and 2.09% as of March 30, 2022 and December 29, 2021, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 4.19% and 4.44% as of March 30, 2022 and December 29, 2021, respectively.

Kitchen Modernization and Technology Transformation Initiatives

The Company is currently in the process of upgrading and improving its kitchen equipment throughout the domestic system. The rollout began during the first quarter of 2022 and is expected to be substantially complete by the end of 2022. This investment is expected to yield long-term benefits through menu enhancements across all dayparts but especially the dinner daypart with new and improved food offerings. The new equipment is also expected to provide immediate benefits through increased kitchen efficiency and productivity while also reducing food waste.

The Company has entered into equipment purchase contracts of approximately $18.3 million related to the rollout of kitchen equipment for franchise restaurants, which will be paid by the franchisees as the equipment is installed, less approximately $5.7 million in commitments from the Company. Amounts committed from the Company are contract assets that have been netted against deferred revenue and recognized as a component of franchise and license revenue over the remaining term of the related franchise agreement. At March 30, 2022, our remaining obligation under these contracts was approximately $9.2 million, $1.6 million of which is included in accounts payable. At March 30, 2022, we had approximately $8.4 million in inventory and $0.7 million in contract assets related to the kitchen equipment rollout.

The Company intends to initiate the rollout of a new cloud-based restaurant technology platform throughout the domestic system which will lay the foundation for future technology initiatives to further enhance the guest experience. The rollout is expected to begin during the second half of 2022 and be substantially complete by the end of 2023.

The Company has committed to investing approximately $10 million towards the cost and installation of the kitchen equipment package (approximately $5.7 million) and the new cloud-based restaurant technology platform (approximately $4.3 million) in domestic franchise restaurants. Additionally, the Company has negotiated favorable financing terms on behalf of its franchisees for the remaining cost.

Critical Accounting Policies and Estimates

For information regarding our Critical Accounting Policies and Estimates, see the "Critical Accounting Policies and Estimates" section in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 29, 2021.

Implementation of New Accounting Standards

Information regarding the implementation of new accounting standards is incorporated by reference from Note 2 to our unaudited Consolidated Financial Statements set forth in Part I, Item 1 of this report.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We have exposure to interest rate risk related to certain instruments entered into for other than trading purposes. Specifically, as of March 30, 2022, borrowings under our credit facility bore interest at variable rates based on LIBOR plus 1.75% per annum.

We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt.

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A summary of our interest rate swaps as of March 30, 2022 is as follows:

Trade Date	Effective Date	Maturity Date	Notional Amount			Fair Value		Fixed Rate
			(In thousands)
Swaps designated as cash flow hedges
March 20, 2015	March 29, 2018	March 31, 2025	$	120,000		$	104	2.44	%
October 1, 2015	March 29, 2018	March 31, 2026	$	50,000		$	(59)	2.46	%
Dedesignated swaps
February 15, 2018	March 31, 2020	December 31, 2033	$	120,000	(1)	$	(23,309)	3.19	%
Total			$	290,000		$	(23,264)

(1)     The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029.

As of March 30, 2022, the total notional amount of our interest rate swaps was in excess of 100% of our floating rate debt. Based on the portion of the swaps in excess of our floating rate debt as of March 30, 2022, a hypothetical change of 100 basis points in LIBOR would change our annual cash flow by approximately $1.2 million. Depending on market considerations, fluctuations in the fair values of our interest rate swaps could be significant. With the exception of these changes in the fair value of our interest rate swaps and in the levels of borrowings under our credit facility, there have been no material changes in our quantitative and qualitative market risks since the prior reporting period. For additional information related to our interest rate swaps, including changes in the fair value, refer to Notes 6, 7 and 13 to our unaudited Consolidated Financial Statements in Part I, Item 1 of this report.

Item 4.     Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management conducted an evaluation (under the supervision and with the participation of our Chief Executive Officer, John C. Miller, and our Executive Vice President and Chief Financial Officer, Robert P. Verostek) as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, Messrs. Miller and Verostek each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to our management, including Messrs. Miller and Verostek, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during our fiscal quarter ended March 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.     Legal Proceedings

Information regarding legal proceedings is incorporated by reference from Note 14 to our unaudited Consolidated Financial Statements set forth in Part I, Item 1 of this report.

Item 1A.     Risk Factors

There have been no material changes in the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

The table below provides information concerning repurchases of shares of our common stock during the quarter ended March 30, 2022.

Period	Total Number of Shares Purchased	Average Price Paid Per Share (1)		Total Number of Shares Purchased as Part of Publicly Announced Programs (2)	Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs (2)
	(In thousands, except per share amounts)
December 30, 2021 - January 26, 2022	422	$	15.71	422	$	210,768
January 27, 2022 - February 23, 2022	332	15.73		332	$	205,547
February 24, 2022 - March 30, 2022	—	—		—	$	205,547
Total	754	$	15.72	754

(1)Average price paid per share excludes commissions.

(2)On December 2, 2019, we announced that our Board of Directors approved a share repurchase program, authorizing us to repurchase up to an additional $250 million of our common stock (in addition to prior authorizations). Such repurchases may take place from time to time in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Exchange Act) or in privately negotiated transactions, subject to market and business conditions. During the quarter ended March 30, 2022, we purchased 0.8 million shares of our common stock for an aggregate consideration of approximately $11.9 million pursuant to the share repurchase program.

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Item 6.     Exhibits

The following are included as exhibits to this report: 

Exhibit No.	Description
10.1	2022 Long-Term Incentive Program Restricted Stock Unit Award Certificate.
10.2	2022 Long-Term Incentive Program Performance Share Unit Award Certificate.
31.1	Certification of John C. Miller, Chief Executive Officer of Denny's Corporation, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Robert P. Verostek, Executive Vice President and Chief Financial Officer of Denny's Corporation, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of John C. Miller, Chief Executive Officer of Denny's Corporation, and Robert P. Verostek, Executive Vice President and Chief Financial Officer of Denny's Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DENNY'S CORPORATION
Date:	May 3, 2022	By:	/s/ Robert P. Verostek
			Robert P. Verostek
			Executive Vice President and Chief Financial Officer
Date:	May 3, 2022	By:	/s/ Jay C. Gilmore
			Jay C. Gilmore
			Senior Vice President, Chief Accounting Officer and Corporate Controller

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EX-10.1

2022 Long-Term Incentive Program Denny’s Corporation Restricted Stock Unit 203 East Main Street Award Certificate Spartanburg, SC 29319 (“Grantee”), Denny’s Corporation (the “Company”) has granted to you (“Grantee”) a restricted stock unit award (the “Award”) denominated in a number of restricted stock units (the “Restricted Stock Units”). The terms and conditions relating to the Restricted Stock Units are set forth in this Award Certificate. The Restricted Stock Units are rights that entitle you to earn shares of the Company’s $0.01 par value common stock (“Shares”), on a one-for-one basis. The Award is granted under the Denny’s Corporation 2021 Omnibus Incentive Plan (the “Plan”). By accepting the Award, you shall be deemed to have agreed to the terms and conditions set forth in this Award Certificate. The Restricted Stock Units will vest (become non-forfeitable) in three (3) equal installments on the last day of the Company’s 2022, 2023, and 2024 fiscal years, subject in each case to your continued employment with the Company through such date, unless vesting is accelerated under Section 2 or Section 3 of the attached Terms and Conditions in the event of certain employment terminations or a change in control. The number of Restricted Stock Units covered by your Award will be determined as follows:  Target Value of Restricted Stock Units (“Target Value”) = _____  Number of Restricted Stock Units (“RSUs”) = Target Value/$_____1 or ____ RSUs2 This Award is governed by the terms of the Plan, and subject to the Terms and Conditions on the following page. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. /s/ F. Mark Wolfinger Grant Date: _2/1/2022____ F. Mark Wolfinger President For Denny’s Corporation 1The average closing market price per Share for the last 20 trading days of the Company’s 2021 fiscal year. 2Rounded up to nearest whole share.

TERMS AND CONDITIONS 1. Vesting and Forfeiture of Award. The Award will vest and become non-forfeitable in three (3) equal installments on the last day of the Company’s 2022, 2023 and 2024 fiscal years (each a “Regular Vesting Date”) subject in each case to Grantee’s continued employment. Only a whole number of Restricted Stock Units will become vested as of any given Regular Vesting Date. If the number of Restricted Stock Units determined as of a Regular Vesting Date is a fractional number, the number vesting will be rounded down to the nearest whole number with any fractional portion carried forward. The Award shall vest on an accelerated basis under certain circumstances as provided in Section 2 and Section 3 below. Notwithstanding anything contained in the Plan to the contrary, if Grantee’s employment with the Company terminates for any reason other than as set forth in paragraph (a) or (b) of Section 2 below, Grantee shall forfeit all of Grantee’s right, title and interest in and to any unvested Restricted Stock Units as of the date of termination of employment. In addition, if Grantee’s employment is terminated by the Company for Cause, Grantee shall also forfeit any vested Restricted Stock Units that have not yet been converted to Shares. 2. Accelerated Vesting Under Certain Employment Terminations. The Award shall be subject to accelerated vesting in connection with a termination of employment under certain circumstances, as set forth below. (a) Upon Grantee’s termination of employment with the Company due to death or Disability, a pro rata portion of the Restricted Stock Units to the extent then outstanding and not previously vested will vest and become non-forfeitable. The pro rata portion shall be determined by multiplying one third (1/3) of the number of Restricted Stock Units covered by Grantee’s Award by a fraction, (i) the numerator of which is the number of days that Grantee was employed during the Company’s fiscal year in which the employment termination date occurs, and (ii) the denominator of which is the total number of days in that fiscal year, rounded up to the next whole Restricted Stock Unit (as so determined, the “Pro Rata Amount”). (b) Upon Grantee’s termination of employment with the Company due to Retirement (as defined below), the Pro Rata Amount (as defined in Section 2(a) above) of the Restricted Stock Units will vest and become non-forfeitable, provided Grantee does not engage in any Restricted Activities with a Competitor (each as defined below) prior to the next Regular Vesting Date (to the extent such restrictions are permissible under applicable law). For purposes of this Award Certificate: “Competitor” means all breakfast and family dining restaurants, including without limitation, IHOP, Bakers Square, Black Bear Diner, Bob Evans, Carrows, Coco’s, Country Kitchen, Country Waffles, Cracker Barrel, Eat ‘n Park, Farmer Boys, Friendly’s, Frisch’s or Big Boy, Huddle House, Lumberjacks, Lyon’s, Marie Callender, Mimi’s, Norms Original Pancake House, Perkins, Metro Diner, Ruby’s Diner, Shari’s, Shoney’s, Silver Diner, Steak ‘n Shake, Village Inn, Waffle House, Weck’s, Another Broken Egg, Broken Yolk, Egg and I, First

Watch, Flying Biscuit, The Good Egg, Jimmy’s Egg, Keke’s, LePeep, Smitty’s, Sunset Grill and Swiss Chalet. “Restricted Activities” means with respect to a Competitor, accepting employment, serving on a board of directors or otherwise being engaged as a consultant or advisor. “Retirement” means Grantee’s voluntary resignation or termination of employment without Cause on or after attainment of age 55, provided that the sum of Grantee’s age and years of service with the Company is equal to or greater than 70. 3. Accelerated Vesting Upon a Change in Control. Upon a Change in Control of the Company during Grantee’s employment, the Restricted Stock Units (to the extent then unvested and not previously forfeited) will vest and become non-forfeitable. 4. Settlement of Restricted Stock Units. Except as otherwise provided in this Section 4 or in Section 6, (i) Restricted Stock Units that vest pursuant to Section 1 on a Regular Vesting Date (and are not otherwise forfeited due to a termination for Cause) shall convert into Shares and be paid out within 30 days following the applicable Regular Vesting Date, (ii) the Pro Rata Amount of Restricted Stock Units that vest pursuant to Section 2(a) (termination due to death or Disability) shall convert into Shares and be paid out within 30 days following the date of termination of employment, (iii) the Pro Rata Amount of Restricted Stock Units that vest pursuant to Section 2(b) (Retirement) shall convert into Shares and be paid out within 30 days following the next Regular Vesting Date to occur (or if sooner, a Change in Control), but in no event later than March 15 of the year following the year in which the termination of employment described in Section 2 occurs, and (iv) Restricted Stock Units that vest pursuant to Section 3 shall convert into Shares and be paid out within 30 days following the Change in Control. Shares paid upon conversion of the Restricted Stock Units will be registered on the books of the Company in Grantee’s name (or in street name to Grantee’s brokerage account) as of the date of payment in uncertificated (book-entry) form. 5. Limitation of Rights. The Award does not confer to Grantee or Grantee’s beneficiary any rights of a stockholder of the Company unless and until Shares are in fact issued to such person in connection with the Award. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate Grantee’s employment at any time, nor confer upon Grantee any right to continue in employment of the Company or any Affiliate. From and after the Grant Date and until the earlier of (a) the time when the Restricted Stock Units become vested and are paid in accordance with this Award Certificate or (b) the time when Grantee’s right to receive Shares in payment of the Restricted Stock Units is forfeited in accordance with this Award Certificate, on the date the Company pays a cash dividend (if any) to holders of Shares generally, Grantee shall be credited with cash per Restricted Stock Unit equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including vesting, payment and forfeitability) as apply to the Restricted Stock Units to which they relate, and such cash amounts shall be paid only if and when the Restricted Stock Units to which they relate are settled.

6. Payment of Taxes. Grantee will owe federal, state, and local taxes in connection with the Award (the “Taxes”)). The withholding of Taxes shall be mandatorily satisfied by withholding from the settlement of the Restricted Stock Units a number of Shares having a fair market value equal to the amount required to be withheld for the Taxes. Grantee’s acceptance of the Award constitutes Grantee’s acknowledgement that the Company will withhold on Grantee’s behalf a number of Shares sufficient to satisfy the Taxes. The obligations of the Company under this Award Certificate will be conditional on such payment of the Taxes by Grantee. Notwithstanding anything to the contrary contained in this Section 6, Section 15, or otherwise, the Company (i) makes no representations or undertakings regarding the treatment of Taxes in connection with any aspect of this Award, and (ii) does not commit to structure the terms of the Award to reduce or eliminate Grantee’s liability for Taxes. 7. Restrictions on Issuance of Shares. If at any time the Compensation and Incentives Committee of the Board (the “Compensation Committee”) shall determine, in its discretion, that registration, listing or qualification of the Shares underlying the Restricted Stock Units upon any securities exchange or similar self-regulatory organization or under any foreign, federal, or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the settlement of the Restricted Stock Units, the Shares will not be paid unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Compensation Committee. 8. Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative. 9. Successors. This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan. 10. Severability. If any one or more of the provisions contained in this Award Certificate is deemed to be invalid, illegal or unenforceable, the other provisions of this Award Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included. 11. Notice. Notices and communications under this Award Certificate must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to Denny’s Corporation, 203 East Main Street, Spartanburg, SC 29319-0001, Attn: Secretary, or any other address designated by the Company in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company. 12. Clawback or Recoupment Policy. Grantee agrees that Grantee will be subject to any compensation, clawback and recoupment policies in the Plan and that may be applicable

to Grantee as an employee of the Company, as in effect from time to time and as approved by the Board of Directors, the Compensation Committee or a duly authorized committee thereof, whether or not approved before or after the Grant Date. 13. Other Company Policies. Grantee agrees, in consideration for the grant of the Restricted Stock Units, to be subject to any policies of the Company and its Affiliates regarding securities trading, and hedging or pledging of securities, that may be in effect from time to time, or as may otherwise be required by applicable law, regulation or exchange listing standard. 14. Governing Law. This Award Certificate shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law, rule or principle that might otherwise refer construction or interpretation of this Award Certificate to the substantive law of another jurisdiction. 15. Section 409A Compliance. This Award Certificate is intended to be exempt from or otherwise comply with the provisions of Section 409A of the Code. The Company may change or modify the terms of this Award Certificate without Grantee’s consent or signature if the Company determines, in its sole discretion, provided that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder. 16. Electronic Delivery of Documents. Grantee authorizes the Company to deliver electronically any prospectuses or other documentation related to the Award and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by means of e-mail or e-mail notification that such documentation is available on the Company’s Intranet site. Upon written request, the Company will provide to Grantee a paper copy of any document also delivered to Grantee electronically. The authorization described in this paragraph may be revoked by Grantee at any time by written notice to the Company. 17. Further Assurances. Grantee agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver, and perform all additional documents, instruments, and agreements that may be reasonably required by the Company or the Committee, as the case may be, to implement the provisions and purposes of this Award and the Plan.

EX-10.2

2022 Long-Term Incentive Program Denny’s Corporation Performance Share Unit 203 East Main Street Award Certificate Spartanburg, SC 29319 «Name» (“Grantee”) Denny’s Corporation (the “Company”) has granted to you a performance share unit award (the “Award”) denominated in a target number of performance share units (the “Performance Share Units” or “PSUs”). The PSUs are rights that entitle you to earn shares of the Company’s $0.01 par value common stock (“Shares”), on a one-for-one basis. The Award is granted under the Denny’s Corporation 2021 Omnibus Incentive Plan (the “Plan”). By accepting the Award, you shall be deemed to have agreed to the terms and conditions set forth in this Award Certificate and the Plan. As described in detail in the Terms and Conditions attached to this Award Certificate, you may earn between 0 to 200% of the PSUs based on the Company’s achievement of two performance metrics. The first metric is the Company’s Total Shareholder Return (“TSR,” as defined in the Award Certificate) ranking relative to the S&P 600 Small Cap Consumer Discretionary Index companies listed on Appendix A to the Award Certificate (the “rTSR,” as defined in the Award Certificate) during the Performance Period. The second metric is the average of the Company’s annual Adjusted EPS Growth (the “Adjusted EPS Growth,” as defined in the Award Certificate), measured year-over-year during the Performance Period (as described below). Each metric is equally weighted (i.e. 50% of the PSUs may be earned based on rTSR and 50% based on Adjusted EPS Growth). The PSUs that may be earned based on rTSR are referred to as the “rTSR PSUs” and the PSUs that may be earned based on Adjusted EPS Growth are referred to as the “EPS PSUs.” The target number of PSUs underlying this Award were determined as follows: Target Grant Date Value of Award: $_________/$XX.XX1 = _________ Total Target Number of Performance Share Units2, divided between the two metrics as follows:  Target Number of rTsr PSUs = _________ (the “rTSR Target PSUS”)  Target Number of EPS PSUs = _________ (the “EPS Target PSUs”) Performance Period: December 30, 2021 to December 25, 2024 1 The average closing market price per Share for the last 20 trading days of the Company’s 2021 fiscal year. 2 Rounded up to nearest whole share.

2 This Award is governed by the terms of the Plan, and subject to the Terms and Conditions on the pages that follow. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. /s/ F. Mark Wolfinger Grant Date: 2/01/2022 F. Mark Wolfinger President For Denny’s Corporation

3 TERMS AND CONDITIONS 1. Vesting and Forfeiture of Award. The Award will vest and become non-forfeitable on the last day of the Performance Period, subject to Grantee’s continued employment through such date, based on the achievement of rTSR and Adjusted EPS Growth as described in Sections 1(a)- Error! Reference source not found. below. (a) rTSR will be measured during the Performance Period on a cumulative basis. If the rTSR performance is equal to or greater than the 25th percentile, then a percentage of rTSR Target PSUs will vest as set forth in the following table: Degree of Performance rTSR % of rTSR Target PSUs to Vest Below Threshold <25th percentile 0% Threshold 25th percentile 50% Target 50th percentile 100% Maximum 75th percentile 200% In the event that the rTSR falls between Threshold and Target, or Target and Maximum, the number of rTSR PSUs that vest will be determined based upon linear interpolation. Notwithstanding the foregoing, in the event that the Company’s TSR is a negative number, the number of rTSR PSUs to vest shall not exceed 100% of the rTSR Target PSUs. (b) Adjusted EPS Growth will be measured at the end of each fiscal year during the Performance Period by calculating the percentage increase in the Actual Adjusted EPS for such fiscal year over the Actual Adjusted EPS for the immediately preceding fiscal year. Specifically, (i) Adjusted EPS Growth for fiscal 2022 will be measured by calculating the percentage increase in Actual Adjusted EPS from fiscal 2021 to fiscal 2022, (ii) Adjusted EPS Growth for 2023 will be measured by calculating the percentage increase in Actual Adjusted EPS from fiscal 2022 to fiscal 2023; and (iii) Adjusted EPS Growth for 2024 will be measured by calculating the percentage increase in Actual Adjusted EPS from fiscal 2023 to fiscal 2024. The Annual Percentage Achieved for each fiscal year will be determined based upon which Adjusted EPS Growth Goal, if any, is met, in accordance with the following table.3 Degree of Performance Attainment Adjusted EPS Growth Goal Annual Percentage Achieved Below Threshold < 8% 0% Threshold 8% 50% 3 If Actual Adjusted EPS for either fiscal year 2022 or fiscal year 2023 is a negative number, growth for the following fiscal year shall be determined by assuming Actual Adjusted EPS for the base year was $0.01 with the Annual Percentage Achieved for that year capped at 100%; provided, however, that if Actual Adjusted EPS Growth determined using the Actual Adjusted EPS amount for the year preceding the year in which it was a negative number would have resulted in the Annual Percentage Achieved at greater than 100%, such greater than 100% amount shall be used.

4 Target 18% 100% Maximum 28% 200% In the event that the Adjusted EPS Growth Goal met for any fiscal year during the Performance Period falls between Threshold and Target, or Target and Maximum, the Annual Percentage Achieved for such fiscal year will be determined based upon linear interpolation. At the end of the Performance Period, the Annual Percentage Achieved for each of the three fiscal years will be added together, and such sum will then be divided by three, resulting in the “Average EPS Growth Achieved.” The amount of EPS Target PSUs that will vest will be calculated by multiplying the Average EPS Growth Achieved by the number of EPS Target PSUs. (c) The Award shall vest on an accelerated basis under certain circumstances, as provided in Section 2 and Section 3 below. Notwithstanding anything contained in the Plan to the contrary, if Grantee’s employment with the Company terminates for any reason other than as set forth in Section 2(a) or Section 2(b) below, Grantee shall forfeit all of Grantee’s right, title and interest in and to unvested PSUs as of the date of termination of employment. In addition, if Grantee’s employment is terminated by the Company for Cause, Grantee shall also forfeit any vested PSUs that have not yet been converted to Shares; provided, that the foregoing shall not apply to any vested PSUs that are deferred pursuant to Section 15 below. 2. Accelerated Vesting Under Certain Employment Terminations. The Award shall be subject to accelerated vesting in connection with termination of employment under certain circumstances, as set forth below. (a) Upon Grantee’s termination of employment with the Company due to death or Disability prior to the end of the Performance Period, the Award will vest as follows: (i) The Company will multiply the rTSR Target PSUs or EPS Target PSUs, as the case may be, by a fraction, the numerator of which is the number of days elapsed from the first day of the Performance Period through the employment termination date, and the denominator of which is 1092 (such amount, the “Pro Rata Target rTSR PSUs” or “Pro Rata Target EPS PSUs”). (1) With respect to the rTSR PSUs, the Award will vest in accordance with Section 1(a) above, provided that, (x) for purposes of the calculation, “Pro Rata Target rTSR PSUs” will be substituted for “rTSR Target PSUs,” and (y) the Performance Period shall be considered to have ended on the last day of the Company’s most recently completed fiscal quarter. (2) With respect to the EPS PSUs, 100% of the Pro Tata Target EPS PSUs shall vest. (b) Upon Grantee’s termination of employment with the Company due to Retirement (as defined below), the Award will vest in accordance with Sections 1(a)-1(b) above at the end of the regular Performance Period, provided that, (x) for purposes of the calculations, “Pro Rata Target rTSR PSUs” or “Pro Rata Target EPS PSUs,” as applicable, will be substituted for “rTSR Target PSUs” or “EPS Target PSUs,” respectively, and (y) Grantee has not engaged in any Restricted Activities with a Competitor (each as defined below) during the Performance Period (to the extent such restrictions are permissible under applicable law). For the avoidance of doubt, the

5 calculation described in this Section 2(b) shall be based on rTSR and Adjusted EPS Growth performance for the three-year Performance Period, provided that in the event of a Change in Control following Grantee’s Retirement but before the end of the Performance Period, the number of PSUs earned shall be calculated in accordance with Section 3 but shall still be prorated in accordance with this Section 2(b) based upon the Grantee’s Retirement date. 3. Accelerated Vesting Upon a Change in Control. Upon a Change in Control of the Company during the Performance Period, the Award will vest in accordance with Sections 1(a)- 1(b), subject to Grantee’s continued employment through the Change in Control, provided that (i) with respect to the rTSR PSUs, the Performance Period shall be considered to have ended on the date of the Change in Control and (ii) with respect to the EPS PSUs, the number of PSUs to vest will be based on assumed Adjusted EPS Growth performance results at the greater of (x) target and (y) estimated actual performance through the Change in Control, as determined by the Committee. 4. Settlement of Performance Share Units. Except to the extent deferred in accordance with Section 15 below, (i) PSUs that vest pursuant to Section 1 (and are not otherwise forfeited due to a termination for Cause) will convert into Shares and be paid out as soon as practicable following the Performance Period, but in no event later than 60 days following the Performance Period, (ii) PSUs that vest pursuant to Section 2(a) (termination due to death or Disability) will convert into Shares and be paid out within 30 days following the employment termination date, (iii) PSUs that vest pursuant to Section 2(b) (Retirement) will convert into Shares and be paid out as soon as practicable following the Performance Period, but in no event later than 60 days following the Performance Period (or if sooner, within 30 days following a Change in Control) and (iv) PSUs that vest pursuant to Section 3 (Change in Control) will convert into Shares and be paid out within 30 days following the Change in Control. Any fractional Shares will be rounded up or down to the nearest next whole Share. Any PSUs that do not become vested will be forfeited. Stock certificates evidencing Shares paid hereunder will be registered on the books of the Company in Grantee’s name (or in street name to Grantee’s brokerage account) as of the date of payment in uncertificated (book-entry) form. 5. Definitions. For purposes of this Award Certificate: (a) “Actual Adjusted EPS” for a fiscal year means the Company’s earnings (net income), adjusted to exclude losses on sales of assets and other items, net of taxes, divided by the fully diluted Shares of the Company’s common stock outstanding, as described and quantified in the Company’s year-end earnings press release for such year. (b) “Adjusted EPS Growth” means the percentage increase in Actual Adjusted EPS for each fiscal year in the Performance Period. (c) “Average Closing Price” means, as of any date, the 20-day average of the closing prices of the applicable stock for the last twenty trading days immediately preceding the applicable determination date. (d) “Competitor” means all breakfast and family dining restaurants, including without limitation, IHOP, Bakers Square, Black Bear Diner, Bob Evans, Carrows, Coco’s, Country

6 Kitchen, Country Waffles, Cracker Barrel, Eat ‘n Park, Farmer Boys, Friendly’s, Frisch’s or Big Boy, Huddle House, Lumberjacks, Lyon’s, Marie Callender, Mimi’s, Norms Original Pancake House, Perkins, Metro Diner, Ruby’s Diner, Shari’s, Shoney’s, Silver Diner, Steak ‘n Shake, Village Inn, Waffle House, Weck’s, Another Broken Egg, Broken Yolk, Egg and I, First Watch, Flying Biscuit, The Good Egg, Jimmy’s Egg, Keke’s, LePeep, Smitty’s, Sunset Grill and Swiss Chalet. (e) “Restricted Activities” means with respect to a Competitor, accepting employment, serving on a board of directors or otherwise being engaged as a consultant or advisor. (f) “Retirement” means Grantee’s voluntary resignation or termination of employment without Cause on or after attainment of age 55, provided that the sum of Grantee’s age and years of service with the Company is equal to or greater than 70. (g) “rTSR” or relative total shareholder return, means the Company’s TSR ranking relative to the TSR of the Company’s peer group, as scheduled on Appendix A. (h) “TSR” or total shareholder return, means (x) the Average Closing Price of a company’s share of common stock determined as of the last day of the Performance Period (or such earlier date as provided in Section 2 or 3) less the Average Closing Price of a company’s share of common stock determined as of the first day of the Performance Period plus reinvested dividends), (y) divided by the Average Closing Price of a company’s share of common stock determined as of the first day of the Performance Period. For purposes of this calculation, the Average Closing Price of a company’s share of common stock on the first day of the Performance Period may be equitably adjusted by the Committee in its discretion to reflect any material changes in the applicable company’s capital structure while the Award remains outstanding, such as a stock split, reverse stock split, stock dividend, split up, spin-off, or other distribution, combination or exchange of such company’s stock. 6. Limitation of Rights. The Award does not confer to Grantee or Grantee’s beneficiary any rights of a stockholder of the Company unless and until Shares are in fact issued to such person in connection with the Award. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate Grantee’s employment at any time, nor confer upon Grantee any right to continue in employment of the Company or any Affiliate. 7. Payment of Taxes. Grantee will owe federal, state, and local taxes in connection with the Award (the “Taxes”). The withholding of Taxes shall be mandatorily satisfied by withholding from the settlement of the PSUs a number of Shares having a fair market value equal to the amount required to be withheld for the Taxes (provided, however, that if Grantee has elected to defer 100% of his or her Award as provided in Section 15 herein (or a lesser amount but the remaining number of Shares are insufficient to cover the applicable FICA obligation), any Grantee FICA obligation will be separately payable to the Company by cash or check). Grantee’s acceptance of the Award constitutes Grantee’s acknowledgement that the Company will withhold on Grantee’s behalf a number of Shares sufficient to satisfy the Taxes. The obligations of the Company under this Award Certificate will be conditional on such payment of the Taxes by Grantee. Notwithstanding anything to the contrary contained in this Section 7, Section 15, Section 17, or otherwise, the Company (i) makes no representations or undertakings regarding the treatment of Taxes in connection with any

7 aspect of this Award, and (ii) does not commit to structure the terms of the Award to reduce or eliminate Grantee’s liability for Taxes. 8. Restrictions on Issuance of Shares. If at any time the Compensation and Incentives Committee of the Board (the “Compensation Committee”) shall determine, in its discretion, that registration, listing or qualification of the Shares underlying the PSUs upon any securities exchange or similar self-regulatory organization or under any foreign, federal, or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the settlement of the PSUs, the Shares will not be paid unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Compensation Committee. 9. Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Award Certificate and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative. 10. Successors. This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan. 11. Severability. If any one or more of the provisions contained in this Award Certificate is deemed to be invalid, illegal or unenforceable, the other provisions of this Award Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included. 12. Notice. Notices and communications under this Award Certificate must be in writing and either personally delivered or sent by registered or certified United States mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to Denny’s Corporation, 203 East Main Street, Spartanburg, SC 29319-0001, Attn: Secretary, or any other address designated by the Company in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company. 13. Clawback or Recoupment Policy. Grantee agrees that Grantee will be subject to any compensation, clawback and recoupment policies in the Plan and that may be applicable to Grantee as an employee of the Company, as in effect from time to time and as approved by the Board of Directors, the Compensation Committee or a duly authorized committee thereof, whether or not approved before or after the Grant Date. 14. Other Company Policies. Grantee agrees, in consideration for the grant of the PSUs, to be subject to any policies of the Company and its Affiliates regarding securities trading, and the hedging or pledging of securities, that may be in effect from time to time, or as may otherwise be required by applicable law, regulation or exchange listing standard. 15. Deferral Election. Notwithstanding anything contained herein to the contrary, Grantee will be permitted to make deferral elections with respect to the Award pursuant to the Denny’s Deferred Compensation Plan, as amended and restated (the “DC Plan”). Any deferral election

8 shall be made in accordance with Section 409A of the Code, the DC Plan terms and pursuant to a Deferral Agreement (as defined in the DC Plan) and may be credited with Dividend Equivalents as set forth in the DC Plan. 16. Governing Law. This Award Certificate shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law, rule or principle that might otherwise refer construction or interpretation of this Award Certificate to the substantive law of another jurisdiction. 17. Section 409A Compliance. This Award Certificate is intended to be exempt from or otherwise comply with the provisions of Section 409A of the Code. The Company may change or modify the terms of this Award Certificate without Grantee’s consent or signature if the Company determines, in its sole discretion, provided that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder. 18. Electronic Delivery of Documents. Grantee authorizes the Company to deliver electronically any prospectuses or other documentation related to the Award and any other compensation or benefit plan or arrangement in effect from time to time (including, without limitation, reports, proxy statements or other documents that are required to be delivered to participants in such arrangements pursuant to federal or state laws, rules or regulations). For this purpose, electronic delivery will include, without limitation, delivery by means of e-mail or e-mail notification that such documentation is available on the Company’s Intranet site. Upon written request, the Company will provide to Grantee a paper copy of any document also delivered to Grantee electronically. The authorization described in this paragraph may be revoked by Grantee at any time by written notice to the Company. 19. Further Assurances. Grantee agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver, and perform all additional documents, instruments, and agreements that may be reasonably required by the Company or the Committee, as the case may be, to implement the provisions and purposes of this Award and the Plan.

9 Appendix A S&P 600 Small Cap Consumer Discretionary Index The following companies comprise the Company’s peer group for the purposes of the rTSR calculation under this Award, provided that each company shall only be included in the rTSR calculation to the extent that it is a publicly traded company on the first day and the last day of the Performance Period (or such earlier date upon which the rTSR is calculated under Section 2 or 3 of the Award), provided that if a company ceases to be publicly traded as a result of insolvency or a bankruptcy proceeding, it shall be included in the peer group as the lowest performing company. The peer group is a closed group (i.e. no additional companies may be added to the peer group). [LIST PEER GROUP]

EX-31.1

Exhibit 31.1

CERTIFICATION

I, John C. Miller, certify that:

1. I have reviewed this report on Form 10-Q of Denny’s Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:	May 3, 2022	By:	/s/ John C. Miller
			John C. Miller
			Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Robert P. Verostek, certify that:

1. I have reviewed this report on Form 10-Q of Denny’s Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date:	May 3, 2022	By:	/s/ Robert P. Verostek
			Robert P. Verostek
			Executive Vice President and
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

John C. Miller

Chief Executive Officer of Denny’s Corporation

and

Robert P. Verostek

Executive Vice President and Chief Financial Officer

of Denny's Corporation

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Denny’s Corporation (the “Company”) on Form 10-Q for the quarter ended March 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John C. Miller, Chief Executive Officer of the Company, and I, Robert P. Verostek, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 3, 2022	By:	/s/ John C. Miller
			John C. Miller
			Chief Executive Officer

Date:	May 3, 2022	By:	/s/ Robert P. Verostek
			Robert P. Verostek
			Executive Vice President and
			Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Denny’s Corporation and will be retained by Denny’s Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Cover Page - shares	3 Months Ended
	Mar. 30, 2022	Apr. 28, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 30, 2022
Document Transition Report	false
Entity File Number	0-18051
Entity Registrant Name	DENNY’S CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3487402
Entity Address, Address Line One	203 East Main Street
Entity Address, City or Town	Spartanburg,
Entity Address, State or Province	SC
Entity Address, Postal Zip Code	29319-0001
City Area Code	864
Local Phone Number	597-8000
Title of 12(b) Security	$.01 Par Value, Common Stock
Trading Symbol	DENN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		61,712,452
Entity Central Index Key	0000852772
Current Fiscal Year End Date	--12-28
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands	Mar. 30, 2022	Dec. 29, 2021
Current assets:
Cash and cash equivalents	$ 6,091	$ 30,624
Investments	3,687	2,551
Receivables, net	23,161	19,621
Inventories	9,829	5,060
Assets held for sale	1,322	0
Prepaid and other current assets	7,941	11,393
Total current assets	52,031	69,249
Property, net of accumulated depreciation of $150,914 and $151,836, respectively	89,878	91,176
Financing lease right-of-use assets, net of accumulated amortization of $9,772 and $11,210, respectively	7,399	7,709
Operating lease right-of-use assets, net	125,012	128,727
Goodwill	36,884	36,884
Intangible assets, net	49,892	50,226
Deferred financing costs, net	2,813	2,971
Deferred income taxes, net	5,139	11,502
Other noncurrent assets	32,346	37,083
Total assets	401,394	435,527
Current liabilities:
Current finance lease liabilities	1,962	1,952
Current operating lease liabilities	15,406	15,829
Accounts payable	12,998	15,595
Other current liabilities	48,524	64,146
Total current liabilities	78,890	97,522
Long-term liabilities:
Long-term debt	171,500	170,000
Noncurrent finance lease liabilities	10,374	10,744
Noncurrent operating lease liabilities	122,470	126,296
Liability for insurance claims, less current portion	7,860	8,438
Other noncurrent liabilities	58,055	87,792
Total long-term liabilities	370,259	403,270
Total liabilities	449,149	500,792
Shareholders' deficit
Common stock $0.01 par value; 135,000 shares authorized; March 30, 2022: 64,457 shares issued and 61,713 outstanding; December 29, 2021: 64,200 shares issued and 62,210 shares outstanding	645	642
Paid-in capital	137,332	135,596
Deficit	(94,586)	(116,441)
Accumulated other comprehensive loss, net	(48,689)	(54,470)
Treasury stock, at cost, 2,744 and 1,990 shares, respectively	(42,457)	(30,592)
Total shareholders' deficit	(47,755)	(65,265)
Total liabilities and shareholders' deficit	$ 401,394	$ 435,527
Common stock, shares outstanding (in shares)	61,713	62,210

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 30, 2022	Dec. 29, 2021
Assets
Accumulated depreciation	$ 150,914	$ 151,836
Accumulated amortization	$ 9,772	$ 11,210
Shareholders' deficit
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	135,000,000	135,000,000
Common stock, shares issued (in shares)	64,457,000	64,200,000
Common stock, shares outstanding (in shares)	61,713,000	62,210,000
Treasury stock, at cost, shares (in shares)	2,744,000	1,990,000

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Revenue:
Total operating revenue	$ 103,107	$ 80,576
Costs of company restaurant sales, excluding depreciation and amortization:
Product costs	11,244	8,272
Payroll and benefits	17,086	12,965
Occupancy	3,240	2,850
Other operating expenses	7,055	6,077
Total costs of company restaurant sales	38,625	30,164
Costs of franchise and license revenue, excluding depreciation and amortization	30,669	23,758
General and administrative expenses	16,958	16,947
Depreciation and amortization	3,548	3,661
Operating (gains), losses and other charges, net	0	532
Total operating costs and expenses, net	89,800	75,062
Operating income	13,307	5,514
Interest expense, net	2,960	4,277
Other nonoperating income, net	(19,615)	(30,048)
Income before income taxes	29,962	31,285
Provision for income taxes	8,107	8,104
Net income	$ 21,855	$ 23,181
Net income per share - basic (in dollars per share)	$ 0.35	$ 0.36
Net income per share - diluted (in dollars per share)	$ 0.34	$ 0.35
Basic weighted average shares outstanding (in shares)	63,343	65,251
Diluted weighted average shares outstanding (in shares)	63,580	65,749
Company restaurant sales
Revenue:
Total operating revenue	$ 43,976	$ 33,569
Franchise and license revenue
Revenue:
Total operating revenue	$ 59,131	$ 47,007

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 21,855	$ 23,181
Other comprehensive income, net of tax:
Minimum pension liability adjustment, net of tax of $8 and $10, respectively	24	30
Changes in the fair value of cash flow derivatives, net of tax of $1,673 and $763, respectively	5,015	2,215
Reclassification of cash flow derivatives to interest expense, net of tax of $248 and $255, respectively	742	740
Amortization of unrealized losses related to dedesignated derivatives to interest expense, net of tax of $0 and $31, respectively	0	90
Other comprehensive income	5,781	3,075
Total comprehensive income	$ 27,636	$ 26,256

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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Tax effect of minimum pension liability adjustment	$ 8	$ 10
Changes in fair value of cash flow derivatives, tax	1,673	763
Reclassification of cash flow derivatives to interest expense, tax	248	255
Reclassification of unrealized losses related to derivatives to interest expense, tax	$ 0	$ 31

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Consolidated Statements of Shareholders' Deficit - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Paid-in Capital	Deficit	Accumulated Other Comprehensive Loss, Net
Balance as of beginning of period (in shares) at Dec. 30, 2020		63,962
Balance as of beginning of period at Dec. 30, 2020	$ (130,446)	$ 640	$ 0	$ 123,833	$ (194,514)	$ (60,405)
Balance as of beginning of period, treasury stock (in shares) at Dec. 30, 2020			0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	23,181				23,181
Other comprehensive income	3,075					3,075
Share-based compensation on equity classified awards, net of withholding tax	2,002			2,002
Issuance of common stock for share-based compensation (in shares)		153
Issuance of common stock for share-based compensation	0	$ 1		(1)
Exercise of common stock options (in shares)		30
Exercise of common stock options	116			116
Balance as of end of period (in shares) at Mar. 31, 2021		64,145
Balance as of end of period at Mar. 31, 2021	$ (102,072)	$ 641	$ 0	125,950	(171,333)	(57,330)
Balance as of end of period, treasury stock (in shares) at Mar. 31, 2021			0
Balance as of beginning of period (in shares) at Dec. 29, 2021	64,200	64,200
Balance as of beginning of period at Dec. 29, 2021	$ (65,265)	$ 642	$ (30,592)	135,596	(116,441)	(54,470)
Balance as of beginning of period, treasury stock (in shares) at Dec. 29, 2021	(1,990)		(1,990)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 21,855				21,855
Other comprehensive income	5,781					5,781
Share-based compensation on equity classified awards, net of withholding tax	$ 1,739			1,739
Purchase of treasury stock (in shares)	(800)		(754)
Purchase of treasury stock	$ (11,865)		$ (11,865)
Issuance of common stock for share-based compensation (in shares)		257
Issuance of common stock for share-based compensation	$ 0	$ 3		(3)
Balance as of end of period (in shares) at Mar. 30, 2022	64,457	64,457
Balance as of end of period at Mar. 30, 2022	$ (47,755)	$ 645	$ (42,457)	$ 137,332	$ (94,586)	$ (48,689)
Balance as of end of period, treasury stock (in shares) at Mar. 30, 2022	(2,744)		(2,744)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 21,855	$ 23,181
Adjustments to reconcile net income to cash flows provided by (used in) operating activities:
Depreciation and amortization	3,548	3,661
Operating (gains), losses and other charges, net	0	532
Gains and amortization on interest rate swap derivatives, net	(20,253)	(29,733)
Amortization of deferred financing costs	158	344
Losses on investments	65	8
Losses on early termination of debt and leases	24	34
Deferred income tax expense	4,436	4,099
Share-based compensation expense	4,015	3,472
Changes in assets and liabilities:
Receivables	(3,567)	353
Inventories	(4,768)	13
Prepaids and other current assets	3,451	5,294
Other noncurrent assets	4,085	(201)
Operating lease assets and liabilities	(244)	(604)
Accounts payable	(2,405)	1,820
Accrued payroll	(7,475)	(1,704)
Accrued taxes	(1)	(380)
Other accrued liabilities	(7,488)	1,195
Other noncurrent liabilities	(2,500)	(1,149)
Net cash flows provided by (used in) operating activities	(7,064)	10,235
Cash flows from investing activities:
Capital expenditures	(2,778)	(1,583)
Proceeds from sales of restaurants, real estate and other assets	108	1,348
Investment purchases	(1,200)	0
Proceeds from sale of investments	0	200
Collections on notes receivable	67	215
Net cash flows provided by (used in) investing activities	(3,803)	180
Cash flows from financing activities:
Revolver borrowings	13,825	7,500
Revolver payments	(12,325)	(2,500)
Long-term debt payments	(503)	(473)
Proceeds from exercise of stock options	0	116
Tax withholding on share-based payments	(2,165)	(1,309)
Deferred financing costs	0	(8)
Purchase of treasury stock	(12,498)	0
Net bank overdrafts	0	(3,125)
Net cash flows provided by (used in) financing activities	(13,666)	201
Increase (decrease) in cash and cash equivalents	(24,533)	10,616
Cash and cash equivalents at beginning of period	30,624	3,892
Cash and cash equivalents at end of period	$ 6,091	$ 14,508

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Introduction and Basis of Presentation

3 Months Ended

Mar. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Introduction and Basis of Presentation

Introduction and Basis of Presentation

Denny’s Corporation, or Denny’s or the Company, is one of America’s largest full-service restaurant chains based on number of restaurants. At March 30, 2022, the Denny's brand consisted of 1,634 restaurants, 1,569 of which were franchised/licensed restaurants and 65 of which were company operated.

The global crisis resulting from the spread of coronavirus ("COVID-19") has had a substantial impact on our restaurant operations starting in the quarter ended March 25, 2020 with continuing impacts into the current quarter ended March 30, 2022. While we have seen improvements compared to earlier periods during the COVID-19 pandemic, we cannot currently estimate the duration or future financial impact of the COVID-19 pandemic on our business. Ongoing material adverse effects of the COVID-19 pandemic for an extended period could negatively affect our business, results of operations, liquidity and financial condition and could impact our impairment assessments of accounts receivable, intangible assets, long-lived assets and goodwill.

Our unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, certain information and notes normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of the interim periods presented have been included. Such adjustments are of a normal and recurring nature. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates are reasonable.

These interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto as of and for the fiscal year ended December 29, 2021 which are contained in our audited Annual Report on Form 10-K for the fiscal year ended December 29, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year ending December 28, 2022. Our significant interim accounting policies include the recognition of advertising and marketing costs, generally in proportion to revenue, and the recognition of income taxes using an estimated annual effective rate.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 30, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Newly Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which was later clarified in January 2021 by ASU 2021-01, “Reference Rate Reform (Topic 848): Scope”. The guidance provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The Company adopted ASU 2020-04 on March 12, 2020. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on the Company’s consolidated financial position or results of operations. The guidance is effective through December 31, 2022.

Accounting Standards to be Adopted

We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our consolidated financial statements as a result of future adoption.

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Receivables

3 Months Ended

Mar. 30, 2022

Receivables [Abstract]

Receivables

Receivables

Receivables consisted of the following:

	March 30, 2022		December 29, 2021
	(In thousands)
Receivables, net:
Trade accounts receivable from franchisees	$	12,897	$	13,430
Financing receivables from franchisees	2,811		1,027
Vendor receivables	2,803		4,041
Credit card receivables	625		747
Other	4,574		950
Allowance for doubtful accounts	(549)		(574)
Total receivables, net	$	23,161	$	19,621
Other noncurrent assets:
Financing receivables from franchisees	$	252	$	293

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Intangible Assets

3 Months Ended

Mar. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets consisted of the following:

	March 30, 2022				December 29, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Intangible assets with indefinite lives:
Trade names	$	44,087	$	—	$	44,087	$	—
Liquor licenses	120		—		120		—
Intangible assets with definite lives:
Reacquired franchise rights	11,801		6,116		12,218		6,199
Intangible assets, net	$	56,008	$	6,116	$	56,425	$	6,199

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Other Current Liabilities

3 Months Ended

Mar. 30, 2022

Other Liabilities, Current [Abstract]

Other Current Liabilities

Other Current Liabilities

Other current liabilities consisted of the following:

	March 30, 2022		December 29, 2021
	(In thousands)
Accrued payroll	$	13,232	$	20,676
Current portion of liability for insurance claims	3,947		4,285
Accrued taxes	4,532		4,533
Accrued advertising	9,538		15,355
Gift cards	5,818		7,170
Other	11,457		12,127
Other current liabilities	$	48,524	$	64,146

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Fair Value of Financial Instruments

3 Months Ended

Mar. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

	Total		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Fair value measurements as of March 30, 2022:
Deferred compensation plan investments (1)	$	12,925	$	12,925	$	—	$	—
Interest rate swaps, net (2)	(23,264)		—		(23,264)		—
Investments (3)	3,687		—		3,687		—
Total	$	(6,652)	$	12,925	$	(19,577)	$	—
Fair value measurements as of December 29, 2021:
Deferred compensation plan investments (1)	$	13,726	$	13,726	$	—	$	—
Interest rate swaps (2)	(52,121)		—		(52,121)		—
Investments (3)	2,551		—		2,551		—
Total	$	(35,844)	$	13,726	$	(49,570)	$	—

(1)    The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments and are included in other noncurrent assets in our Consolidated Balance Sheets.

(2)    The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps.

(3)    The fair values of our investments are valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments.

The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The outstanding senior secured revolver is carried at historical cost, which approximates fair value. The fair value of our senior secured revolver approximates its carrying value since it is a variable rate facility (Level 2).

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Long-Term Debt

3 Months Ended

Mar. 30, 2022

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Denny's and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026.

The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of March 30, 2022.

As of March 30, 2022, we had outstanding revolver loans of $171.5 million and outstanding letters of credit under the credit facility of $15.7 million. These balances resulted in unused commitments of $212.8 million as of March 30, 2022 under the credit facility.

As of March 30, 2022, borrowings under the credit facility bore interest at a rate of LIBOR plus 1.75% and the commitment fee, paid on the unused portion of the credit facility, was set to 0.25%.

Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 1.98% and 2.09% as of March 30, 2022 and December 29, 2021, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 4.19% and 4.44% as of March 30, 2022 and December 29, 2021, respectively.

Interest Rate Hedges

We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. We initially designated the interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to variable interest payments due on forecasted notional amounts. A summary of our interest rate swaps as of March 30, 2022 is as follows:

Trade Date	Effective Date	Maturity Date	Notional Amount			Fair Value		Fixed Rate
			(In thousands)
Swaps designated as cash flow hedges
March 20, 2015	March 29, 2018	March 31, 2025	$	120,000		$	104	2.44	%
October 1, 2015	March 29, 2018	March 31, 2026	$	50,000		$	(59)	2.46	%
Dedesignated swaps
February 15, 2018	March 31, 2020	December 31, 2033	$	120,000	(1)	$	(23,309)	3.19	%
Total			$	290,000		$	(23,264)

(1)     The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029.

Swaps Designated as Cash Flow Hedges

To the extent the swaps are highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in the Consolidated Statements of Operations but are reported as a component of other comprehensive income. The interest rate swaps entered into in 2015 are designated as cash flow hedges with unrealized gain and losses recorded as a component of accumulated other comprehensive loss, net.

As of March 30, 2022, the fair value of the swaps designated as cash flow hedges was a net asset of less than $0.1 million. One was recorded as an asset of $0.1 million as a component of other noncurrent assets and the other as a liability of $0.1 million as a component of other noncurrent liabilities. The designated swaps have an offsetting amount (before taxes) recorded as a component of accumulated other comprehensive loss, net in our Consolidated Balance Sheets. See Note 13 for amounts recorded in accumulated other comprehensive loss related to interest rate swaps. We expect to reclassify approximately $3.4 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to swaps designated as cash flow hedges during the next twelve months.

Dedesignated Interest Rate Hedges

During the year ended December 30, 2020, we determined that a portion of the underlying cash flows related to our hedging relationship entered into in 2018 (“2018 Swaps”) were no longer probable of occurring over the term of the interest rate swaps. Accordingly, we dedesignated the cash flow relationship and discontinued hedge accounting treatment for the 2018 Swaps. As a result, we reclassified a portion of losses from accumulated other comprehensive loss, net to other nonoperating income, net in our Consolidated Statements of Operations and began amortizing the remaining amounts of unrealized losses related to the 2018 Swaps from accumulated other comprehensive loss, net into our Consolidated Statements of Operations as a component of interest expense, net over the remaining term of the 2018 Swaps. For the quarter ended March 30, 2022, no unrealized losses were reclassified to interest expense, net related to the 2018 Swaps. For the quarter ended March 31, 2021, we reclassified unrealized losses of approximately $0.1 million to interest expense, net related to the 2018 Swaps. At March 30, 2022, approximately $64.2 million (before taxes) of unrealized losses remained in accumulated other comprehensive loss, net. We expect to amortize less than $0.1 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to dedesignated interest rate swaps during the next twelve months.

As a result of the dedesignated cash flow relationship related to the 2018 Swaps, changes in the fair value of the 2018 Swaps are recorded as a component of other nonoperating income, net in our Consolidated Statements of Operations. For the quarter ended March 30, 2022, we recorded income of approximately $20.3 million as a component of other nonoperating income, net related to the 2018 Swaps resulting from changes in fair value. For the quarter ended March 31, 2021, we recorded income of approximately $29.9 million as a component of other nonoperating income, net related to the 2018 Swaps resulting from changes in fair value. As of March 30, 2022, the fair value of the dedesignated interest rate swaps was a liability of $23.3 million, $0.3 million of which was recorded as a component of other current liabilities and $23.0 million of which was recorded as a component of other noncurrent liabilities in our Consolidated Balance Sheets.

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Revenues

3 Months Ended

Mar. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Our revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channel and type of good or service:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Company restaurant sales	$	43,976	$	33,569
Franchise and license revenue:
Royalties	26,525		20,844
Advertising revenue	18,206		14,111
Initial and other fees	4,507		1,838
Occupancy revenue	9,893		10,214
Franchise and license revenue	59,131		47,007
Total operating revenue	$	103,107	$	80,576

Franchise occupancy revenue consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Operating lease revenue	$	7,418	$	7,913
Variable lease revenue	2,475		2,301
Total occupancy revenue	$	9,893	$	10,214

Balances related to contracts with customers consist of receivables, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables.

The components of the change in deferred franchise revenue are as follows:

	(In thousands)
Balance, December 29, 2021	$	19,896
Fees received from franchisees	1,199
Franchisee deferred costs (1)	(626)
Revenue recognized, net (2)	(739)
Balance, March 30, 2022	19,730
Less current portion included in other current liabilities	1,928
Deferred franchise revenue included in other noncurrent liabilities	$	17,802

(1)    Deferred costs are contract assets consisting of incentives given to franchisees related to the rollout of kitchen equipment to all franchise locations.

(2)    Of this amount $0.6 million was included in the deferred franchise revenue balance as of December 29, 2021.

Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that we will begin amortizing into revenue when the related restaurants are opened net of certain deferred costs. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising.

The Company has entered into equipment purchase contracts of approximately $18.3 million related to the rollout of kitchen equipment for franchise restaurants, which will be paid by the franchisees as the equipment is installed, less approximately $5.7 million in commitments from the Company. Amounts committed from the Company are contract assets that have been netted against deferred revenue and will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreement. At March 30, 2022, our remaining obligation under these contracts was approximately $9.2 million, $1.6 million of which is included in accounts payable. At March 30, 2022, we had approximately $8.4 million in inventory and $0.7 million in contract assets related to the kitchen equipment rollout.

Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to our customers. The balance of deferred gift card liabilities as of March 30, 2022 and December 29, 2021 was $5.8 million and $7.2 million, respectively. During the quarter ended March 30, 2022, we recognized revenue of $0.2 million from gift card redemptions at company restaurants.

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Operating (Gains), Losses and Other Charges, Net

3 Months Ended

Mar. 30, 2022

Other Income and Expenses [Abstract]

Operating (Gains), Losses and Other Charges, Net

Operating (Gains), Losses and Other Charges, Net

Operating (gains), losses and other charges, net consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Gains on sales of assets and other, net	$	(146)	$	(942)
Restructuring charges and exit costs	146		1,474
Operating (gains), losses and other charges, net	$	—	$	532

As of March 30, 2022, we had recorded assets held for sale at their carrying amount of $1.3 million (consisting of property of $1.0 million and other assets of $0.3 million) related to three parcels of real estate. There were no assets held for sale recorded as of December 29, 2021.

Restructuring charges and exit costs consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Exit costs	$	12	$	82
Severance and other restructuring charges	134		1,392
Total restructuring charges and exit costs	$	146	$	1,474

Exit costs primarily consist of costs related to closed restaurants. Exit cost liabilities related to lease costs are included as a component of operating lease liabilities in our Consolidated Balance Sheets.

As of March 30, 2022 and December 29, 2021, we had accrued severance and other restructuring charges of $0.1 million and $0.1 million, respectively. The balance as of March 30, 2022 is expected to be paid during the next 12 months.

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Share-Based Compensation

3 Months Ended

Mar. 30, 2022

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

Total share-based compensation included as a component of general and administrative expenses was as follows:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Employee share awards	$	3,794	$	3,253
Restricted stock units for board members	221		219
Total share-based compensation	$	4,015	$	3,472

Employee Share Awards

During the quarter ended March 30, 2022, we granted certain employees approximately 233,000 performance share units ("PSUs") with a grant date fair value of $24.51 per share that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and approximately 233,000 PSUs with a grant date fair value of $15.59 per share that vest based on our Adjusted EPS growth rate versus plan, as defined under the terms of the award. As the TSR based PSUs contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value. The performance period for these PSUs is the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. The PSUs will completely vest and be earned at the end of the performance period at which point the relative TSR and Adjusted EPS growth rate achievement percentages will be applied to the vested units (from 0% to 200% of the target award). We recognize compensation cost associated with approximately 312,000 of these PSU awards over the entire performance period on a straight-line basis, with compensation cost for the remaining 154,000 PSU awards recognized on a graded-vesting basis due to the accelerated vesting terms for certain retirement eligible individuals.

We also granted certain employees approximately 310,000 restricted stock units ("RSUs") with a grant date fair value of $15.59 per share. The RSUs vest evenly over the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. We recognize compensation cost associated with these RSU awards on a straight-line basis over the entire performance period of the award.

During the quarter ended March 30, 2022, we issued 257,000 shares of common stock related to vested PSUs and RSUs. In addition, approximately 24,000 shares of common stock were deferred and approximately 136,000 shares of common stock were withheld in lieu of taxes related to vested PSUs and RSUs.

As of March 30, 2022, we had approximately $22.9 million of unrecognized compensation cost related to unvested PSU awards and RSU awards outstanding, which have a weighted average remaining contractual term of 2.3 years.

Restricted Stock Units for Board Members

As of March 30, 2022, we had approximately $0.1 million of unrecognized compensation cost related to unvested RSU awards outstanding, which have a weighted average remaining contractual term of 0.2 years.

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Income Taxes	3 Months Ended
	Mar. 30, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesThe effective income tax rate was 27.1% for the quarter ended March 30, 2022, compared to 25.9% for the prior year period.

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Net Income Per Share

3 Months Ended

Mar. 30, 2022

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per Share

The amounts used for the basic and diluted net income per share calculations are summarized below:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands, except per share amounts)
Net income	$	21,855	$	23,181
Weighted average shares outstanding - basic	63,343		65,251
Effect of dilutive share-based compensation awards	237		498
Weighted average shares outstanding - diluted	63,580		65,749
Net income per share - basic	$	0.35	$	0.36
Net income per share - diluted	$	0.34	$	0.35
Anti-dilutive share-based compensation awards	829		273

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Shareholders' Deficit

3 Months Ended

Mar. 30, 2022

Stockholders' Equity Attributable to Parent [Abstract]

Shareholders' Deficit

Shareholders' Deficit

Share Repurchases

Our credit facility permits the repurchase of Denny’s stock and the payment of cash dividends subject to certain limitations. Our Board of Directors approves share repurchases of our common stock. Under these authorizations, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions. Currently, we are operating under a $250 million share repurchase authorization approved by the Board of Directors in December 2019.

During the quarter ended March 30, 2022, we repurchased a total of 0.8 million shares of our common stock for approximately $11.9 million. This brings the total amount repurchased under the current authorization to approximately $44.5 million, leaving approximately $205.5 million that can be used to repurchase our common stock under this authorization as of March 30, 2022. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statement of Shareholders' Deficit.

As of March 30, 2022, 2.7 million shares were held in treasury stock.

Accumulated Other Comprehensive Loss, Net

The components of the change in accumulated other comprehensive loss, net were as follows:

	Defined Benefit Plans		Derivatives		Accumulated Other Comprehensive Loss, Net
	(In thousands)
Balance as of December 29, 2021	$	(900)	$	(53,570)	$	(54,470)
Amortization of net loss (1)	32		—		32
Changes in the fair value of cash flow derivatives	—		6,688		6,688
Reclassification of cash flow derivatives to interest expense, net (2)	—		990		990
Income tax expense related to items of other comprehensive income	(8)		(1,921)		(1,929)
Balance as of March 30, 2022	$	(876)	$	(47,813)	$	(48,689)

(1)    Before-tax amount related to our defined benefit plans that was reclassified from accumulated other comprehensive loss, net and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Operations during the quarter ended March 30, 2022.

(2)    Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statements of Operations represent payments either received from or made to the counterparty for the interest rate swaps. See Note 7 for additional details.

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Commitments and Contingencies	3 Months Ended
	Mar. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesLegal ProceedingsThere are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect our consolidated results of operations or financial position.

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Supplemental Cash Flow Information

3 Months Ended

Mar. 30, 2022

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Income taxes paid, net	$	449	$	421
Interest paid	$	2,849	$	4,743
Noncash investing and financing activities:
Issuance of common stock, pursuant to share-based compensation plans	$	4,081	$	2,435
Execution of finance leases	$	133	$	—

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Subsequent Event

3 Months Ended

Mar. 30, 2022

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

On May 3, 2022, the Company entered into an Asset Purchase Agreement, by and between the Company, as purchaser, and K2 Restaurants, Inc. together with the other sellers and principals party thereto (the "Purchase Agreement") for the acquisition of certain assets and assumption of certain liabilities of the franchise business, Keke's Breakfast Cafe ("Keke's"), and eight Keke’s restaurants owned and operated by the sellers (the "Acquisition"). The Company anticipates that the Acquisition will close during the Company’s second fiscal quarter of 2022.

The aggregate consideration payable to Keke's equityholders will be $82,500,000, payable in cash, subject to certain adjustments. The Company expects to fund the purchase price with a combination of cash on hand and funds available under its existing credit agreement.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 30, 2022

Accounting Policies [Abstract]

Newly Adopted Accounting Standards and Accounting Standards to be Adopted

Newly Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which was later clarified in January 2021 by ASU 2021-01, “Reference Rate Reform (Topic 848): Scope”. The guidance provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The Company adopted ASU 2020-04 on March 12, 2020. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on the Company’s consolidated financial position or results of operations. The guidance is effective through December 31, 2022.

Accounting Standards to be Adopted

We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our consolidated financial statements as a result of future adoption.

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Receivables (Tables)

3 Months Ended

Mar. 30, 2022

Receivables [Abstract]

Schedule of Receivables, Net

Receivables consisted of the following:

	March 30, 2022		December 29, 2021
	(In thousands)
Receivables, net:
Trade accounts receivable from franchisees	$	12,897	$	13,430
Financing receivables from franchisees	2,811		1,027
Vendor receivables	2,803		4,041
Credit card receivables	625		747
Other	4,574		950
Allowance for doubtful accounts	(549)		(574)
Total receivables, net	$	23,161	$	19,621
Other noncurrent assets:
Financing receivables from franchisees	$	252	$	293

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Intangible Assets (Tables)

3 Months Ended

Mar. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Indefinite-Lived Intangible Assets

Intangible assets consisted of the following:

	March 30, 2022				December 29, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Intangible assets with indefinite lives:
Trade names	$	44,087	$	—	$	44,087	$	—
Liquor licenses	120		—		120		—
Intangible assets with definite lives:
Reacquired franchise rights	11,801		6,116		12,218		6,199
Intangible assets, net	$	56,008	$	6,116	$	56,425	$	6,199

Schedule of Finite-Lived Intangible Assets

Intangible assets consisted of the following:

	March 30, 2022				December 29, 2021
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(In thousands)
Intangible assets with indefinite lives:
Trade names	$	44,087	$	—	$	44,087	$	—
Liquor licenses	120		—		120		—
Intangible assets with definite lives:
Reacquired franchise rights	11,801		6,116		12,218		6,199
Intangible assets, net	$	56,008	$	6,116	$	56,425	$	6,199

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Other Current Liabilities (Tables)

3 Months Ended

Mar. 30, 2022

Other Liabilities, Current [Abstract]

Schedule of Other Current Liabilities

Other current liabilities consisted of the following:

	March 30, 2022		December 29, 2021
	(In thousands)
Accrued payroll	$	13,232	$	20,676
Current portion of liability for insurance claims	3,947		4,285
Accrued taxes	4,532		4,533
Accrued advertising	9,538		15,355
Gift cards	5,818		7,170
Other	11,457		12,127
Other current liabilities	$	48,524	$	64,146

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

	Total		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Fair value measurements as of March 30, 2022:
Deferred compensation plan investments (1)	$	12,925	$	12,925	$	—	$	—
Interest rate swaps, net (2)	(23,264)		—		(23,264)		—
Investments (3)	3,687		—		3,687		—
Total	$	(6,652)	$	12,925	$	(19,577)	$	—
Fair value measurements as of December 29, 2021:
Deferred compensation plan investments (1)	$	13,726	$	13,726	$	—	$	—
Interest rate swaps (2)	(52,121)		—		(52,121)		—
Investments (3)	2,551		—		2,551		—
Total	$	(35,844)	$	13,726	$	(49,570)	$	—

(1)    The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments and are included in other noncurrent assets in our Consolidated Balance Sheets.

(2)    The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps.

(3)    The fair values of our investments are valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments.

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Long-Term Debt (Tables)

3 Months Ended

Mar. 30, 2022

Debt Disclosure [Abstract]

Schedule of Interest Rate Swaps

A summary of our interest rate swaps as of March 30, 2022 is as follows:

Trade Date	Effective Date	Maturity Date	Notional Amount			Fair Value		Fixed Rate
			(In thousands)
Swaps designated as cash flow hedges
March 20, 2015	March 29, 2018	March 31, 2025	$	120,000		$	104	2.44	%
October 1, 2015	March 29, 2018	March 31, 2026	$	50,000		$	(59)	2.46	%
Dedesignated swaps
February 15, 2018	March 31, 2020	December 31, 2033	$	120,000	(1)	$	(23,309)	3.19	%
Total			$	290,000		$	(23,264)

(1)     The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029.

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Revenues (Tables)

3 Months Ended

Mar. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates our revenue by sales channel and type of good or service:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Company restaurant sales	$	43,976	$	33,569
Franchise and license revenue:
Royalties	26,525		20,844
Advertising revenue	18,206		14,111
Initial and other fees	4,507		1,838
Occupancy revenue	9,893		10,214
Franchise and license revenue	59,131		47,007
Total operating revenue	$	103,107	$	80,576

Schedule of Components of Lease Income

Franchise occupancy revenue consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Operating lease revenue	$	7,418	$	7,913
Variable lease revenue	2,475		2,301
Total occupancy revenue	$	9,893	$	10,214

Schedule of Components of the Change in Deferred Franchise Revenue

The components of the change in deferred franchise revenue are as follows:

	(In thousands)
Balance, December 29, 2021	$	19,896
Fees received from franchisees	1,199
Franchisee deferred costs (1)	(626)
Revenue recognized, net (2)	(739)
Balance, March 30, 2022	19,730
Less current portion included in other current liabilities	1,928
Deferred franchise revenue included in other noncurrent liabilities	$	17,802

(1)    Deferred costs are contract assets consisting of incentives given to franchisees related to the rollout of kitchen equipment to all franchise locations.

(2)    Of this amount $0.6 million was included in the deferred franchise revenue balance as of December 29, 2021.

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Operating (Gains), Losses and Other Charges, Net (Tables)

3 Months Ended

Mar. 30, 2022

Other Income and Expenses [Abstract]

Schedule of Operating Gains Losses and Other Charges, Net

Operating (gains), losses and other charges, net consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Gains on sales of assets and other, net	$	(146)	$	(942)
Restructuring charges and exit costs	146		1,474
Operating (gains), losses and other charges, net	$	—	$	532

Schedule of Restructuring Charges and Exit Costs

Restructuring charges and exit costs consisted of the following:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Exit costs	$	12	$	82
Severance and other restructuring charges	134		1,392
Total restructuring charges and exit costs	$	146	$	1,474

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 30, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Total Share-based Compensation

Total share-based compensation included as a component of general and administrative expenses was as follows:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Employee share awards	$	3,794	$	3,253
Restricted stock units for board members	221		219
Total share-based compensation	$	4,015	$	3,472

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Net Income Per Share (Tables)

3 Months Ended

Mar. 30, 2022

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income Per Share

The amounts used for the basic and diluted net income per share calculations are summarized below:

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands, except per share amounts)
Net income	$	21,855	$	23,181
Weighted average shares outstanding - basic	63,343		65,251
Effect of dilutive share-based compensation awards	237		498
Weighted average shares outstanding - diluted	63,580		65,749
Net income per share - basic	$	0.35	$	0.36
Net income per share - diluted	$	0.34	$	0.35
Anti-dilutive share-based compensation awards	829		273

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Shareholders' Deficit (Tables)

3 Months Ended

Mar. 30, 2022

Stockholders' Equity Attributable to Parent [Abstract]

Schedule of Components of Accumulated Other Comprehensive Income (Loss)

The components of the change in accumulated other comprehensive loss, net were as follows:

	Defined Benefit Plans		Derivatives		Accumulated Other Comprehensive Loss, Net
	(In thousands)
Balance as of December 29, 2021	$	(900)	$	(53,570)	$	(54,470)
Amortization of net loss (1)	32		—		32
Changes in the fair value of cash flow derivatives	—		6,688		6,688
Reclassification of cash flow derivatives to interest expense, net (2)	—		990		990
Income tax expense related to items of other comprehensive income	(8)		(1,921)		(1,929)
Balance as of March 30, 2022	$	(876)	$	(47,813)	$	(48,689)

(1)    Before-tax amount related to our defined benefit plans that was reclassified from accumulated other comprehensive loss, net and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Operations during the quarter ended March 30, 2022.

(2)    Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statements of Operations represent payments either received from or made to the counterparty for the interest rate swaps. See Note 7 for additional details.

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 30, 2022

Supplemental Cash Flow Information [Abstract]

Schedule of Supplemental Cash Flow Information

	Quarter Ended
	March 30, 2022		March 31, 2021
	(In thousands)
Income taxes paid, net	$	449	$	421
Interest paid	$	2,849	$	4,743
Noncash investing and financing activities:
Issuance of common stock, pursuant to share-based compensation plans	$	4,081	$	2,435
Execution of finance leases	$	133	$	—

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Introduction and Basis of Presentation (Details)	Mar. 30, 2022 restaurant
Franchisor Disclosure [Line Items]
Number of restaurants	1,634
Franchised/licensed Restaurants
Franchisor Disclosure [Line Items]
Number of restaurants	1,569
Company Restaurants
Franchisor Disclosure [Line Items]
Number of restaurants	65

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Receivables - Receivables, Net (Details) - USD ($) $ in Thousands	Mar. 30, 2022	Dec. 29, 2021
Receivables, net:
Trade accounts receivable from franchisees	$ 12,897	$ 13,430
Financing receivables from franchisees	2,811	1,027
Allowance for doubtful accounts	(549)	(574)
Receivables, net	23,161	19,621
Other noncurrent assets:
Financing receivables from franchisees	252	293
Vendor receivables
Receivables, net:
Other receivables, gross, current	2,803	4,041
Credit card receivables
Receivables, net:
Other receivables, gross, current	625	747
Other
Receivables, net:
Other receivables, gross, current	$ 4,574	$ 950

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Intangible Assets - Finite-Lived and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 30, 2022	Dec. 29, 2021
Intangible Assets
Trade names	$ 44,087	$ 44,087
Liquor licenses	120	120
Reacquired franchise rights	11,801	12,218
Accumulated Amortization	6,116	6,199
Intangible assets, net	$ 56,008	$ 56,425

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Other Current Liabilities - Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 30, 2022	Dec. 29, 2021
Other Liabilities, Current [Abstract]
Accrued payroll	$ 13,232	$ 20,676
Current portion of liability for insurance claims	3,947	4,285
Accrued taxes	4,532	4,533
Accrued advertising	9,538	15,355
Gift cards	5,818	7,170
Other	11,457	12,127
Other current liabilities	$ 48,524	$ 64,146

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Fair Value of Financial Instruments - Assets and Liabilities on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Mar. 30, 2022	Dec. 29, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan investments	$ 12,925	$ 13,726
Interest rate swaps	(23,264)	(52,121)
Investments	3,687	2,551
Total	(6,652)	(35,844)
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan investments	12,925	13,726
Interest rate swaps	0	0
Investments	0	0
Total	12,925	13,726
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan investments	0	0
Interest rate swaps	(23,264)	(52,121)
Investments	3,687	2,551
Total	(19,577)	(49,570)
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan investments	0	0
Interest rate swaps	0	0
Investments	0	0
Total	$ 0	$ 0

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Long-Term Debt - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021	Dec. 29, 2021	Dec. 30, 2020
Line of Credit Facility [Line Items]
Unrealized losses remained in accumulated other comprehensive loss, net	$ 47,755,000	$ 102,072,000	$ 65,265,000	$ 130,446,000
Derivatives
Line of Credit Facility [Line Items]
Reclassification	990,000
Unrealized losses remained in accumulated other comprehensive loss, net	47,813,000		$ 53,570,000
Effective Interest Rate Swaps
Line of Credit Facility [Line Items]
Cash flow hedge, net asset value (less than)	100,000
Other noncurrent asset	100,000
Other noncurrent liability	100,000
Expected reclassification within next twelve months	3,400,000
Dedesignated Interest Rate Swaps
Line of Credit Facility [Line Items]
Other noncurrent liability	23,000,000
Interest rate swaps	23,300,000
Other current liability	300,000
Dedesignated Interest Rate Swaps | Other Nonoperating Income (Expense)
Line of Credit Facility [Line Items]
Unrealized gain (loss) on derivatives	20,300,000	29,900,000
Dedesignated Interest Rate Swaps | Derivatives
Line of Credit Facility [Line Items]
Reclassification		$ 100,000
Dedesignated Interest Rate Swaps | Derivatives
Line of Credit Facility [Line Items]
Unrealized losses remained in accumulated other comprehensive loss, net	64,200,000
Dedesignated Interest Rate Swaps | Derivatives
Line of Credit Facility [Line Items]
Expected reclassification within next twelve months	$ 100,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, term	5 years
Line of credit facility, current borrowing capacity	$ 400,000,000
Line of credit facility, borrowing capacity, accordion feature	450,000,000
Outstanding amount under credit facility	171,500,000
Availability under the credit facility	$ 212,800,000
Commitment fee, percent	0.25%
Weighted-average interest rate	1.98%		2.09%
Revolving Credit Facility | Interest Rate Swap
Line of Credit Facility [Line Items]
Weighted-average interest rate	4.19%		4.44%
Revolving Credit Facility | Libor
Line of Credit Facility [Line Items]
Basis spread on variable rate debt (as a percent)	1.75%
Letter of Credit
Line of Credit Facility [Line Items]
Line of credit facility, current borrowing capacity	$ 25,000,000
Outstanding amount of letters of credit	$ 15,700,000

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Long-Term Debt - Interest Rate Swaps (Details)	Mar. 30, 2022 USD ($)
Derivative [Line Items]
Notional Amount	$ 290,000,000
Fair Value	(23,264,000)
Interest Rate Swap 2018-2025
Derivative [Line Items]
Notional Amount	120,000,000
Fair Value	$ 104,000
Fixed Rate	2.44%
Interest Rate Swap 2018-2026
Derivative [Line Items]
Notional Amount	$ 50,000,000
Fair Value	$ (59,000)
Fixed Rate	2.46%
Interest Rate Swap 2020-2033
Derivative [Line Items]
Notional Amount	$ 120,000,000
Fair Value	$ (23,309,000)
Fixed Rate	3.19%
Interest Rate Swap 2020-2029 | Maximum
Derivative [Line Items]
Notional Amount	$ 425,000,000

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Revenues - Disaggregation of Revenues (Details) $ in Thousands	3 Months Ended
	Mar. 30, 2022 USD ($) segment channel	Mar. 31, 2021 USD ($)
Revenue from Contract with Customer [Abstract]
Number of sales channels | channel	2
Number of segments | segment	1
Disaggregation of Revenue [Line Items]
Total operating revenue	$ 103,107	$ 80,576
Company restaurant sales
Disaggregation of Revenue [Line Items]
Total operating revenue	43,976	33,569
Royalties
Disaggregation of Revenue [Line Items]
Total operating revenue	26,525	20,844
Advertising revenue
Disaggregation of Revenue [Line Items]
Total operating revenue	18,206	14,111
Initial and other fees
Disaggregation of Revenue [Line Items]
Total operating revenue	4,507	1,838
Occupancy revenue
Disaggregation of Revenue [Line Items]
Total operating revenue	9,893	10,214
Franchise and license revenue
Disaggregation of Revenue [Line Items]
Total operating revenue	$ 59,131	$ 47,007

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Revenues - Components of Lease Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Revenue from Contract with Customer [Abstract]
Operating lease revenue	$ 7,418	$ 7,913
Variable lease revenue	2,475	2,301
Total occupancy revenue	$ 9,893	$ 10,214

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Revenues - Components of the Change in Deferred Franchise Revenue (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 30, 2022	Dec. 29, 2021
Movement In Deferred Revenue Roll Forward
Balance, December 29, 2021	$ 19,896
Fees received from franchisees	1,199
Franchisee deferred costs	(626)
Revenue recognized	(739)
Balance, March 30, 2022	19,730	$ 19,896
Less current portion included in other current liabilities	1,928
Deferred franchise revenue included in other noncurrent liabilities	$ 17,802
Deferred revenue recognized		$ 600

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Revenues - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 30, 2022	Dec. 29, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Liability balance	$ 1,928
Deferred revenue recognized		$ 600
Gift Card Redemption
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Liability balance	5,800	$ 7,200
Deferred revenue recognized	200
Kitchen Equipment Rollout For Franchise Restaurants
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Equipment purchase contract	18,300
Amount committed by the company	5,700
Purchase obligations	9,200
Inventory related to kitchen equipment rollout	8,400
Contract assets	700
Kitchen Equipment Rollout For Franchise Restaurants | Accounts Payable
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Purchase obligations	$ 1,600

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Operating (Gains), Losses and Other Charges, Net - Operating Gains Losses and Other Charges, Net and Restructuring Charges and Exit Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Other Income and Expenses [Abstract]
Gains on sales of assets and other, net	$ (146)	$ (942)
Restructuring charges and exit costs	146	1,474
Operating (gains), losses and other charges, net	0	532
Restructuring Charges [Abstract]
Exit costs	12	82
Severance and other restructuring charges	134	1,392
Total restructuring charges and exit costs	$ 146	$ 1,474

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Operating (Gains), Losses and Other Charges, Net - Narrative (Details)	Mar. 30, 2022 USD ($) real_estate	Dec. 29, 2021 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Severance and other restructuring charges	$ 100,000	$ 100,000
Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Carrying amount	1,300,000	$ 0
Property	1,000,000
Other assets	$ 300,000
Number of real estate properties | real_estate	3

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Share-Based Compensation - Total Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 4,015	$ 3,472
Employee share awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	3,794	3,253
Restricted stock units for board members
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation	$ 221	$ 219

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Share-Based Compensation - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Mar. 30, 2022 USD ($) $ / shares shares
Certain Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 22.9
Unrecognized contractual term	2 years 3 months 18 days
PSUs, TSR | Certain Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in periods (in shares)	233
Fair value of units granted (in dollars per share) | $ / shares	$ 24.51
PSUs, Adjusted EPS | Employee Share Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in periods (in shares)	233
Fair value of units granted (in dollars per share) | $ / shares	$ 15.59
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost, straight-line basis	312
Compensation cost, graded-vesting basis	154
Performance Shares | Certain Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of performance	3 years
Performance Shares | Employee Share Awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target achievement	0.00%
Performance Shares | Employee Share Awards | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of target achievement	200.00%
Restricted Stock Units | Certain Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in periods (in shares)	310
Fair value of units granted (in dollars per share) | $ / shares	$ 15.59
Period of performance	3 years
Restricted Stock Units | Board Members
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 0.1
Unrecognized contractual term	2 months 12 days
PSUs and RSUs | Certain Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares issued (in shares)	257
Deferred common stock (in shares)	24
Shares paid for tax withholding (in shares)	136

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Income Taxes (Details)	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Effective tax rate expense (benefit), percent	27.10%	25.90%

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Net Income Per Share - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Earnings Per Share [Abstract]
Net income	$ 21,855	$ 23,181
Weighted average shares outstanding - basic (in shares)	63,343	65,251
Effect of dilutive share-based compensation awards (in shares)	237	498
Weighted average shares outstanding - diluted (in shares)	63,580	65,749
Net income per share - basic (in dollars per share)	$ 0.35	$ 0.36
Net income per share - diluted (in dollars per share)	$ 0.34	$ 0.35
Anti-dilutive share-based compensation awards (in shares)	829	273

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Shareholders' Deficit - Narrative (Details) - USD ($) shares in Thousands	3 Months Ended
	Mar. 30, 2022	Dec. 29, 2021	Dec. 25, 2019
Equity, Class of Treasury Stock [Line Items]
Purchase of treasury stock (in shares)	800
Purchase of treasury stock	$ 11,865,000
Treasury stock, at cost, shares (in shares)	2,744	1,990
Share Repurchase Program 2019
Equity, Class of Treasury Stock [Line Items]
Share repurchase, authorized amount			$ 250,000,000
Purchase of treasury stock	$ 44,500,000
Remaining shares to be repurchased	$ 205,500,000

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Shareholders' Deficit - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance as of beginning of period	$ (65,265)	$ (130,446)
Income tax expense related to items of other comprehensive income	(1,929)
Balance as of end of period	(47,755)	(102,072)
Defined Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance as of beginning of period	(900)
Reclassification	32
Income tax expense related to items of other comprehensive income	(8)
Balance as of end of period	(876)
Derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance as of beginning of period	(53,570)
Reclassification	990
Changes in the fair value of cash flow derivatives	6,688
Income tax expense related to items of other comprehensive income	(1,921)
Balance as of end of period	(47,813)
Accumulated Other Comprehensive Loss, Net
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balance as of beginning of period	(54,470)	(60,405)
Balance as of end of period	$ (48,689)	$ (57,330)

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Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 30, 2022	Mar. 31, 2021
Supplemental Cash Flow Information [Abstract]
Income taxes paid, net	$ 449	$ 421
Interest paid	2,849	4,743
Noncash investing and financing activities:
Issuance of common stock, pursuant to share-based compensation plans	4,081	2,435
Execution of finance leases	$ 133	$ 0

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Subsequent Event - Narrative (Details) - Subsequent Event - Keke's $ in Thousands	May 03, 2022 USD ($) restaurant
Subsequent Event [Line Items]
Number of franchises acquired | restaurant	8
Total purchase price | $	$ 82,500