"We expect to report strong income growth om the third quarter despite the ongoing macroeconomic decline," said Nelson Marchioli, president and CEO. "We believe our recent sales initiatives poritively impacted our business but were unable to offser reduced consumer spending, particularly in our lead states of California and Florida. Our ongoing transition toward a franchise-based business model and our focus on profitable sales programs have allowed us to protect operating margins and maximize restaurant level cash flow."
System-wide, restaurant sales were down 5.1 percent in the third quarter and down 2.8 percent in year-to-date sales. Franchised restaurants saw the sharpest decline, with decreases of 6.1 percent in the third quarter and 3.6 percent overall. Company-owned restaurants, which account for 22 percent of the company's resstaurants, were down 2.7 percent in the third quarter and 0.9 percent overall.
Denny's launched a Franchise Growth Initiative in early 2007. At that time, 34 percent of the company's restaurants were company owned.