Greetings. Welcome to Denny's Corporation Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the conference over to your host, Curt Nichols, Vice President of Investor Relations and Financial Analysis. You may begin. Good afternoon. Thank you for joining us for Denny's Fourth Quarter 2023 Earnings Conference Call. With me today for management are Kelli Valade, Denny's President and Chief Executive Officer, and Robert Verostek, Denny's Executive Vice President and Chief Financial Officer. Please refer to our website at investor.dennys.com to find our fourth quarter earnings press release, along with the reconciliation of any non-GAAP financial measures mentioned on the call today. This call is being webcast, and an archive of the webcast will be available on our website later today. Kelli will begin today's call with a business update, then Robert will provide a development update and recap of our fourth quarter financial results before commenting on guidance. After that, we will open it up for questions. Before we begin, let me remind you that in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the company knows that certain matters to be discussed by members of management during this call may constitute forward-looking statements. Management urges caution in considering its current trends and any outlook on earnings provided during this call. Such statements are subject to risk, uncertainties, and other factors that may cause the actual performance of Denny's to be materially different from the performance indicated or implied by such statements. Such risks and factors are set forth in the company's most recent annual report on Form 10-K for the year ended December 28, 2022, and in any subsequent Forms 8-K and quarterly reports on Form 10-Q. With that, I will now turn the call over to Kelli Valade, Denny's President and Chief Executive Officer. Thank you, Curt, and good afternoon, everyone. Thank you for joining us today. We were pleased to close out 2023 with solid domestic system-wide same-restaurant sales of 1.3% in the fourth quarter, reflecting sequential improvement throughout the quarter. Because of that improvement in momentum, we delivered system-wide same-restaurant sales growth of positive 3.6% for the full year, which was above the high end of our previously guided range, a satisfying achievement given the operational challenges the industry endured again in 2023. In fact, Denny's same-restaurant sales outperformed the full-service industry benchmark for both the fourth quarter and for the full year. An impressive statistic for sure. Looking ahead to 2024, we entered the new year with a clear focus on what we know is resonating with our consumers and a laser-like focus on our three strategic areas of focus. These are: a best-in-class breakfast with craveable items, an unbeatable value proposition, and convenience in the form of unique off-premise options. We spent last summer cascading these new strategies to our franchisees, culminating with a comprehensive unveiling of our new playbook at our annual convention in October. By November, we put these strategies in play with bold moves, with a new menu, new food innovation, and an unbeatable value proposition. The playbook is now working and is providing momentum in this new year. First, let's talk about our craveable breakfast items and new menu. According to recent Yelp data, there were nearly 6,000 new restaurant openings with the breakfast and brunch category in 2023. Clearly, there's an enormous demand for breakfast, coupled with consumers wanting breakfast items whenever it suits them. This is obviously our sweet spot. We are America's diner after all, and we own breakfast. Our November menu launch showcased that breakfast leadership in a big way, as we leaned into our unique ownable equities with our Slam platforms, including our new Strawberry Stuffed French Toast Slam, now made with our delicious premium brioche French toast. Guests are clearly loving it, given their reaction to this launch, as we are selling over 150 total French toast plates per week per restaurant. Additionally, this menu launch was a key activation point in our new playbook, and that we revamped the look and the feel of the menu also, and leaned into what's most important to our guests while being focused on ease of execution for our operators. Specifically, along with new product innovation, we simplified the menu layout while minimizing customizations and the Build Your Own categories on the menu. This not only allowed us to highlight our most popular and most craveable items, but it simplified operations without any impact on the guests or to guest preferences. This new menu also led to margin improvements, given our strategic approach to highlighting our most profitable items and ones we know to be guest favorites. Finally, the recent menu also incorporated a new pricing model that will help protect our value leadership while better enabling franchisees to make smart pricing decisions that are aligned with regional factors and more localized competitive benchmarking. The new pricing structure and approach will help us minimize traffic erosion when we do take price, as we now have a heightened focus on the elasticity of certain menu categories and items. At a time when the guest is still extremely sensitive to price increases at the grocery store and in restaurants, this strategy and focus is well-timed and will continue to help us with our goal of smart menus, smart pricing. Importantly, this improved approach will also be critically important in California as we work to offset the potential impact of AB 1228, formerly known as the FAST Act. This quarter's results were also aided by our approach to leading with value and leveraging our increasingly successful Barbell Strategy. Our Original Grand Slam, starting at the unbeatable price of $5.99, was featured nationwide starting in late November with positive results. We believe we brought this compelling offer to the guests at the perfect moment, helping them balance holiday travel and shopping, knowing they could count on Denny's for the best breakfast out there at an incredibly compelling price. The guests responded well and quickly as we saw traffic and sales trends increase, and we immediately noticed share gains against both family dining and casual dining. Mix on our value platform remained consistent at 17%, but we grew check with premium offerings merchandised in restaurants, which is proof positive of our successful Barbell Strategy, where some guests indeed are coming in for our value equity, but others are ordering more premium options. In addition, we remain focused on providing convenience through our off-premise business, and we saw pickup here on a year-over-year basis also. Specifically, off-premise sales were approximately 20% of total sales, up from 19% in the third quarter. We feel good about this sales mix, considering that many in our industry are actually experiencing sales declines in this channel. For us, these channels provide a unique opportunity to leverage operating capacity at dinner and late night to a distinctly new consumer. For these reasons, this will continue to be a part of our strategies, which is why we're leaning into testing our third virtual brand with Banda Burrito, and why we're leaning into a test with Franklin Junction, a global leader in branded virtual restaurants. We should be able to speak to both of these tests in more depth in our upcoming calls, but we continue to be hopeful and encouraged by the results we're seeing so far. Now, I'd like to provide updates to some of our other priorities captured in our Crave framework. Here, we'll focus on technology and innovation first. We're pleased with our recent progress on our new cloud-based POS platform, as we are now moving forward with installations in all company restaurants, expected to be completed by the second quarter of this year, with franchise restaurants to follow. This foundation will enable improved kitchen video systems, or KVS, server handhelds, and QR Pay, resulting in more consistent operation execution, labor efficiencies, and enhanced guest experiences. In addition, our culinary and operations teams are continuing to lean in and explore opportunities to further leverage our ovens and other kitchen equipment to drive menu innovation and kitchen efficiencies. In fact, next quarter, you'll see new exciting products which will leverage our new ovens as the primary cooking platform. Importantly, we've also seen improvement in our food quality scores year-over-year, and a high percentage of this improvement can be attributed to our new kitchen equipment. Of course, we have to talk about our people and our guests. We're extremely proud of the progress we have made with our people programs, including the launch of our GAIN program this last year. We're impacting lives and careers by offering education and attainment for all. As a result, we continue to see improvements in staffing and reduced turnover rates at Denny's. In fact, management turnover for 2023 improved 400 basis points compared to 2022, and was approximately 400 basis points lower than Guest XM Family Dining Index, formerly Black Box Intelligence. As for the guest experience, our overall 2023 net sentiment score was 41%, compared to 32% for the family dining segment and 23% for the overall restaurant industry. Our Google ratings continue to improve as we recently reached a 4.3 rating. I can't say enough about the progress of both our teams and our guests as we have our company and franchise operators to thank for taking such great care of our guests always. Their continued commitment to delighting every guest is appreciated and apparent. We also continue to remodel restaurants with our Heritage 2.0 program while testing the next evolution of our prototype, which will lean into our unique diner image with a modern, updated, and fresh look. Early results from the modern diner test are strong, with positive marks for a unique, brighter, yet warm approach to a modern diner. Sales and traffic results are also promising. We'll have full results from this test to share soon, and we'll begin incorporating the modern diner remodel program into the mix in the back half of the year. Finally, I want to pivot and talk about the growth and expansion of Keke's Breakfast Cafe. We are thrilled to have opened our first Keke's location outside the state of Florida a couple weeks ago in Hendersonville, Tennessee, just outside of Nashville. Despite opening during a snowstorm, sales were strong for the first week and continue to be impressive. We also recently held an official grand opening ceremony for the new cafe, receiving a warm welcome as we were joined by the Hendersonville community, including the mayor, the city chamber, and local businesses. With this new location, we debuted a new cafe design, an updated look and feel that was developed through our learnings from last year's brand ethos work. It's a beautiful design, highlighting the things unique to Keke's that we know our guests love. Mornings from Scratch is a prominent tagline and our unique positioning, which serves to highlight our core differentiators of fresh from scratch cooking daily, made with the highest quality ingredients, offered in great abundance. We've also now launched a new menu in this location and in all existing Keke's restaurants. This menu offers a simplified approach with less items and a focus on what we know Keke's does best. In addition, the alcohol program test was a success and a system-wide rollout now is underway. This program will become a brand standard and a requirement for all new cafe openings. For us, this has been a critical year, building a strong foundation for the brand and integrating the Keke's brand into the portfolio at Denny's. We're incredibly pleased with the progress President David Schmidt has made as he has built a strong team, cemented a unique position in the AM breakfast segment, and a competitive, differentiated path that will allow us to win in new markets this year and beyond. As a reminder, we have a franchise disclosure document in place and 14 signed development agreements for over 100 Keke's cafes across multiple states, 11 of those with Denny's franchisees and 3 with Keke's existing franchisees. We expect this number to grow and will soon be talking about many more. Our approach to Keke's and our early results are in line with our expectations. Our strategic intent in purchasing Keke's was to compete in this highly fractured, yet steadily growing daytime eatery segment. We have the unique opportunity to leverage our model franchisor approach and our strong network of franchisees in both brands to grow exponentially and capture market share. We are well on our way with the work we have done so far. Finally, we have been laser-like in our focused approach to understanding what the guests love about Keke's, and the results here are also phenomenal. The Keke's brand 2023 overall net sentiment of 54% significantly outperformed the Family Dining Index of 31%, in addition to significantly outperforming the segment in scores for service, ambiance, and intent to return. This tells us we have a winning formula and a brand that guests absolutely love. The future is bright for our small but mighty Keke's brand.... In closing, 2023 marked another year of resilience for our dedicated franchisees, our operators, and support teams, and we look to build on our achievements in 2024. This past year, we honored our past, celebrating our 70 years in the business at Denny's, and we chartered a clear path to winning for the next 70 years. We couldn't do this without the strong partnership and collaborative approach with our incredible franchisees and owners. They are the reason we push to deliver our best every day. They deserve it, and our guests deserve it. It's clear we have the right approach to win in today's environment, with committed leaders and partners, and a game plan for our two unique, incredible brands, primed for growth and continued momentum for 2024 and beyond. With that, I'll turn the call over to Robert. Thank you, Kelli, and good afternoon, everyone. Today, I will provide a development update and a review of our fourth quarter results before discussing our 2024 annual guidance. Starting with development highlights, our brands opened 32 combined restaurants in 2023, marking the highest number of openings since 2017. Within the quarter, Denny's franchisees opened 7 new restaurants, including one international location. This resulted in 28 Denny's restaurant openings for the year, flat with 2022 and consistent with pre-pandemic opening rates. Keke's opened two franchise cafes during the quarter, resulting in a total of 4 cafes for the full year. As Kelli noted, we also opened an additional Keke's company cafe in late January in Hendersonville, Tennessee, marking the first cafe outside of Florida. This marks the first of several company cafes as we plan to utilize company capital to develop oversight efficiency in various markets within and outside of Florida. In addition, Keke's currently has four cafes under construction, with several others in permitting and site approval phases. Moving to our fourth quarter results, Denny's domestic system-wide same restaurant sales grew 1.3% in the fourth quarter compared to 2022, anchored by a 1.5% increase at domestic franchised restaurants. Denny's domestic system-wide same-restaurant sales were 3.6% for the full year 2023, exceeding the performance for eight of the nine years prior to the pandemic. Denny's domestic system-wide same-restaurant sales growth was primarily driven by pricing of approximately 7.5%, along with a product mix benefit of approximately 0.3%. Denny's domestic average weekly sales for Q4 were approximately $38,000, including off-premises sales of approximately $8,000 or 20% of total sales. As a result, average unit volumes for 2023 were approximately $1.9 million. Franchise and license revenue was $61.3 million, compared to $66.5 million in the prior year quarter. This change was primarily driven by a $5.3 million decrease in initial and other fees associated with the sale of kitchen equipment in the prior year quarter. Franchise operating margin was $31.5 million or 51.4% of franchise and license revenue, compared to $31.6 million or 47.6% in the prior year quarter. Approximately 430 basis points of this favorable change in margin rate resulted from the completion of our kitchen modernization rollout during 2023. Company restaurant sales were $54 million, compared to $54.4 million in the prior year quarter. Company restaurant operating margin was $5.4 million or 10%, compared to $6.8 million or 12.6% in the prior year quarter. This margin change was primarily due to $1.8 million in legal costs in the current quarter, partially offset by improvements in product costs compared to the prior year quarter. The $1.8 million in legal costs had an unfavorable 340 basis point impact on the company restaurant operating margin rate for the current quarter. Commodity inflation was in line with our internal expectations at approximately 2% in Q4 2023, compared to 1% deflation experienced in Q3 2023. Additionally, labor inflation for Q4 2023 was 3%, flat with Q3 2023. G&A expenses for Q4 totaled $19.3 million, compared to $17 million in the prior year quarter. These results collectively contributed to adjusted EBITDA of $18.6 million. The provision for income taxes was $1.7 million, reflecting an effective income tax rate of 36.9% for the quarter, compared to 20.7% in the prior year quarter. Adjusted net income per share was $0.14. We generated adjusted free cash flow of $7.4 million. Our quarter end total debt to adjusted EBITDA leverage ratio was 3.26x. We had approximately $266 million of total debt outstanding, including $256 million borrowed under our credit facility. During the quarter, we allocated $16.2 million to share repurchases, continuing our commitment of returning capital to our shareholders. At the end of the quarter, we had approximately $100 million remaining under our existing repurchase authorization.... Since beginning our share repurchase program in late 2010, we have allocated over $700 million to repurchase approximately 67 million shares at an average share price of $10.39. Let me now take a few minutes to expand on the business outlook section of our earnings release. We anticipate Denny's domestic system-wide same restaurant sales will be between 0% and 3% compared to 2023. We anticipate opening 40-50 restaurants and cafes on a consolidated basis, inclusive of 12-16 Keke's openings and a consolidated net decline of 10-20 restaurants. We are projecting commodity inflation to be between 0% and 2% for 2024. We expect labor inflation between 4% and 5% for the year. This labor inflation guidance takes into account the anticipated impact from AB 1228 in California. Our expectations for consolidated total general and administrative expenses are between $83 million and $86 million, including $12 million related to share-based compensation expense, which does not impact Adjusted EBITDA. This consolidated range contemplates a full year of G&A for Keke's new management team and a fully reloaded incentive plan, which is paid out at approximately 70% over the last four years. Additionally, this range would suggest corporate administrative expenses have grown at a compounded annual rate of 2.5%-3% from pre-pandemic 2019, before considering the investment in Keke's management team, who will drive that brand's growth. That compares to a compounded annual growth rate of 4.3% nationally for private industry salaries and wages between 2019 and 2023. As a result, we anticipate consolidated adjusted EBITDA of between $85 million and $89 million. Finally, I would like to thank our engaged franchisees and results-driven brand teams who have remained focused on serving our guests while supporting the transformation of the Denny's brand and the growth of Keke's. That wraps up our prepared remarks. I will now turn the call over to the operator to begin the Q&A portion of our call. Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Michael Tamas with Oppenheimer and Company. Please proceed with your question. Hi, thanks. Good afternoon. You know, you provided same-store sales guidance of 0%-3% for the year. So can you first touch on maybe what level of menu pricing you're anticipating within that for 2024? And then can you talk about the cadence? You know, should we see sales build throughout the year, or how do you, how do you want us thinking about that trajectory? Thanks. Yeah. Hey, Michael, how are you? Hope you're well. With regard to pricing, for the year, we are going to roll into some rollover pricing on the year of approximately 2%, and there will be additional pricing. We have two pricing windows. We're getting back to our normal cadence of the year, which is an April menu print and an October menu print, which will have two additional menu opportunities for pricing within those menu prints. So, we're rolling over two, you have two additional pricings. The April pricing will allow us to contemplate AB 1228 in California. So I would expect that window to probably have more pricing than the October window. So I would think that the pricing will be in the range of 5%-6%, with that build that I just described there. With regard to the cadence, I think you probably captured it correctly. I think it does somewhat build over the course of the year. We are rolling over the prior year, some pretty strong numbers from the first quarter of the prior year. And we have seen some impacts from weather, as we started off January here. So I do believe it'll build over the course of the year, based on some of those items I just mentioned, along with our initiatives becoming even further baked as we move throughout the year with regard to menu innovation, value messaging, off-prem, off-prem with regard to the virtual brand. So I think all of those will continue to mature across the year. So, with regard to pricing, I think that 5%-6% range, and I do think, as you described, it does build over the course of the year. Thank you. And then, you know, I think the unit growth guidance suggests you close about 50-70 units this year. Can you talk about maybe what led to that decision? Any help on timing, you know, pacing of that throughout the year? And then can you talk about maybe the financial impact to maybe EBITDA or how we should think about that? Thanks. Yeah. So it's another really good question. So to your point, that the midpoint there would suggest about 60 closures, right? That 50-70 range that you described. The reality of that situation is having come through the inflation environment that we've had, although it did temper quite a bit in 2023, the profitability of restaurants where it kind of that breakeven for a unit, a Denny's restaurant, to remain open, has really kind of elevated from about $1 million to about $1.2 million. And so we're continuing. That used to be, that level used to be that $1 million that I just referenced, that used to be the break point of a closure. So we are continuing to work through some additional closures as a result of those inflationary pressures. Our goal, as I've said previously, is to get back to a more normalized rate, but we wanted to be, as we started off the year, to be somewhat conservative with regard to that. When you think of these restaurants, to your point with regard to what the EBITDA impact would be, these generally are about million-dollar units, million-dollar restaurants. So at $40,000-$50,000 in EBITDA, that is rolling off. So as we build new higher Denny's restaurant openings, so we guided 40-50 openings, 12-16 of those being Keke's. You would expect us to open somewhere around 30 Denny's. Those are almost double the volume nowadays of the closures. So the reality is it's somewhat net neutral on the EBITDA between those two. The closings about half the number of openings as there are closings, but the volume of the openings are about double that of the closings. And we are at that level of openings, the guidance actually suggests the highest number of Denny's openings since 2017. So we have that machine back open and with the 12-16 Keke's, that's 3-4 times the level of openings that we have seen out of that brand at any point in its history, really. So we're really excited about what that's starting to produce for us. Thank you. Thanks. Thanks, Michael. Thank you. Our next question comes from the line of Jake Bartlett with Truist Securities. Please proceed with your question. Great. Thanks for taking the question. You know, first, I just want to dig into kind of what drove the, you know, the miss on EBITDA versus your expectations. It looked like, you know, sales was a little bit above. So, so what was the surprise that, that drove that miss? I think at the versus the midpoint of guidance is about 5% lower. So any help there would be- Yeah. That's a really good question, Jake, and hello, good to hear your voice. It really was, and they were in some of our prepared remarks, really kind of revolving around $2.5-$3 million worth of reserve adjustments that we really didn't have a good line of sight into. More than half of that came from some legal reserves that we had to book into late into the year. $2.5 million of that really sat in the company margin. And if you right-size for that on the quarter, it would have been between 14.5% and 15%. And that $2.5 million would have added basically another full point to the year. And there was about $500,000 of reserve adjustments related to our captive within the G&A section of our P&L also. So again, we really, it bothers us. We put out guidance with the full intention of achieving it. And the fact that we didn't because of these kind of one-time events was truly bothersome to us. But when you adjust for those, right size for those, it, the margins, particularly on the company side, are much better. The other, some of the other pieces of those one-time charges, $2.5 million, the largest part was legal. We also had some claims development into workers' comp and GL, general liability, and some minor medical that impacted that. So just kind of pervasive across the board, nothing really going in our favor, this fourth quarter. Got it. Got it. That all makes sense. You know, my other question was about traffic and your expectations in 2024. You know, given the guidance for same-store sales and the pricing that you talked about, it's, like, pretty negative traffic. So, you know, I guess I'm wondering what is driving that? Is it—are you seeing trade out of the category? I know at some point you were talking about kind of trade down and trade out and kind of, you know, being maybe a net neutral for on that. But, you know, what are you seeing with the consumer? What, why do you think you're seeing this pressure on traffic? And, you know, do you—what can you do about it? You know, is there a—I know you're working on some innovation on the lower end of the menu. You know, what's your confidence that you can kind of try to really move the needle here with the traffic? Yeah. So, another really good question, Jake. So when we look at it, and we pay attention to what's happening in the general economy, we're seeing somewhat. There's not a lot of confidence into what we're seeing into 2024. So our guidance, in to your point on the guest traffic side, is really a reflection of that. As you're aware, our consumer set is half of our consumer has an income base of less than $50,000. So again, we're just being conservative there. We are really bullish about everything that we have into the hopper. We have new, we've caught the original Grand Slam, that $5.99, $7.99 messaging that we launched into in mid-November, really trained, changed trends in a very material way. We have concept, new value concepts in various levels of testing. We have multiple virtual brands in various levels of testing. So... In large part, we being conservative because the rhetoric in the environment is there, but bullish about the other things that we have going. Yeah. Yeah, Jake, I think, hi, it's great to hear your voice- Hi As well. And just to, just to echo what Robert said, and just piggyback, it really is about just watching the predictions from economists, just watching, you know, those that we track and those that are putting out those reports that just tell us whether it's inflation and the recent reports that just came out, or just that, you know, a lot went into thinking about it and being optimistic, yet just realistic. I would also call out, our value mix has been ticking up, and we've seen that just in January alone. So we feel like we're probably projecting it the right way and looking at it the right way, and yet we are still optimistic. Lastly, I would tell you, in both the fourth quarter of last year and in January, we can tell that we are stealing share, both on sales and traffic, against our competitive benchmarks, which are both benchmarks for family dining and casual dining. So, you know, is there trade down from casual? Perhaps. Is there trade out from us? Perhaps. We also see evidence that people, in fact, are still, you know, anxious enough to maybe visit less often. But again, for us, we can see what we're doing against the competitive set. The last thing I'll say relative to this, Jake, is that our value mix, while ticking up and an indicator perhaps of indeed where people are being cautious, our GCA is still up, and we continue to just be really excited about and encouraged by our Barbell strategy, in that those that Robert called out, less than $50,000, may be the ones definitely coming in, sensing that we do have great value at this unbeatable price and great food. Are also though, there are also people coming in and then upgrading to our amazing new products, like the Strawberry Stuffed French Toast, just continues to sell incredibly well. So I feel like we're balanced. We've thought a lot about it, and we're really still pretty optimistic about the things we have in the hopper, as you heard from Robert. Great. I appreciate it all. Thank you so much. Thank you. Thanks, Jake. Thank you. Our next question comes from the line of Nick Setyan with Wedbush. Please proceed with your question. Thank you. I just wanna first clarify the pricing commentary. Did I understand correctly that Q1 pricing is 2%? Yeah, sorry, Nick. No, sorry if I misled you. We're rolling off 2% in pricing in the quarter. The pricing that we will see throughout the year is in that 5%-6% range, and that will be fairly steady across the year, maybe a little bit tick higher in April as we take into account pricing related to AB 1228. I apologize if I misled with my remarks, but no, the pricing in Q1 will be more in line with the 5%-6% that I referenced to Jake. Okay. And Q4 sounds like it was in that mid-5% range, just to kind of get to that 7.5% for the year. Is that correct? The math of it is that we actually layered in additional pricing with a November print. So while we're rolling off various pieces of that as we move into Q1, the actual pricing effect in the quarter, in Q3, Q4 2023, was more in the 7.5% range. So that's the number you should think about. So the 1.3 would suggest about a six-point traffic decline. About a 6.3 traffic decline? Yeah, about that. It again, it's not perfectly perfect math in that when you're dealing with same store sales. So, but yes, in that 6% range. Yes, sir. I appreciate You giving me the opportunity to clarify those remarks. No, it's very helpful. Thank you. And then just on the G&A guidance, it does sound like you're pretty much, you know, assuming sort of a full payout across the board, and so, you know, it, it, it's, you know, when, when it's all said and done, it seems like, you know, G&A may not be as high as, as, as the full year guidance implies. I mean, hopefully it is, and, and everything, you know, across the top line and margins are great, but if not, it sounds like G&A is actually gonna be a little bit lower. Is that a fair understanding of how you're guiding G&A? Given the last four years, Nick, it would represent 70%, but I liked your more bullish claim that we're gonna hit all of our guidance and actually pay out that level, and everybody will be excited to do that. But yes, the $83 million-$86 million range does include a 100% short-term incentive compensation assumption. Okay. And on the franchise margin, can we just talk about sort of the trajectory on the franchise margin, you know, in 2024, and then just how many company-owned Keke's you guys are thinking of, you know, within that guidance in 2024? Yeah, let me start with the second part first. I'll give Curt a chance to help me out with the margin question on the franchise. But with regard to the Keke's openings, the 12-16, I would tell you that in the current year, in 2024, that those will likely be 40%-50% company openings. As we build the pipeline with additional Keke's franchisee development in some great strength within the Denny's franchise development related to the development agreements that we announced on the last call, those 14 agreements for 100 additional cafe commitments. So, in the current year, as we build out operational efficiency in places like Tennessee, in Jacksonville, you'll see us invest more into company-operated cafes. So the 12-16 would likely be 40%-50%, 40%-50% of company cafe openings. With regard to the margin, what I'm being shown is that it will be very, very similar to 2023, so approximately 51%. And the changes as you note, in the remarks, is we, we have this odd revenue recognition standard that impacted the prior year, where we were having to recognize the kitchen equipment that we were installing for franchisees, as revenue with a complete contra offset into the expense, which depressed margins by 4-5 franchise margins by 4-5 percentage points. So but we don't have that same type of impact within the 2023 results, so you shouldn't see, you shouldn't expect or anticipate another 4-5 percentage point growth. It'll be very similar, that low 50s% range, 50, 51 range, so. Got it. Okay. Thank you very much. Thanks, Nick. Thank you. Our next question comes from the line of Todd Brooks with Benchmark Company. Please proceed with your question. Hey, good evening, everyone. Thanks for taking my questions. Hey, Todd. Hey, Todd. One follow-up... Hey, good to talk to you both. One follow-up to Jake's question, actually. Kelli, I think when you were answering, you said value mix has ticked up in January. I know it was stable Q4 versus Q3. Can you share with us how much it has ticked up just to maybe dimensionalize...? Sure. Thanks. Yeah, absolutely, Todd. A couple points. We've seen it go up a couple points. It's a recent trend change, but again, we're still seeing that check hold, reiterate that, and we're still seeing, you know, people coming in and ordering some of these great new products around innovation. So the value messaging we know is working to get them in the door. We'll refresh that messaging this quarter and... But it's ticked up a couple points as of late, and again, probably evidence to what most are saying about, you know, how people are feeling. But for us, again, still confident in the strategy on barbell, and that is really working for us. If I think back historically, this has run in the low to mid-20s before, hasn't it? We're not back to maybe historical peaks for where value's mixed out. I think that's correct. Robert is nodding his head as well. Yeah. Yeah. Todd, when we during the heights of the 2-4-6-8 launch, it was in the 23%-25% range. And as long as the barbell strategy is effective, as Kelli's alluding to, we're not afraid of driving that value instance rate. These are, this is not just the Original Grand Slam and the one that we're talking about as of late, although that has been incredibly successful, as we've talked about. This is other things that are messaged in the restaurant that we would classify our Everyday Value Slam or Super Slam. We kinda capture those all in that kind of value incidence bucket for us. Okay. The Original Grand Slam is the one that is upticked as of late. Yeah. Yep. Okay, that's helpful. Thanks. I want to get a little bit on Keke's. So at the end of Q3, you updated us on the 14 agreements, 100 units, and I think today's commentary was 14 agreements, 100+ units. Are we actively selling agreements now? Are we digesting the explosion that we had in agreements in Q3? I'm just curious. I felt there was more momentum maybe to continue off the franchisee convention and the signings that you saw there. Sure. So could you talk about that? Yeah. Yeah, I think that's fair, Todd. And, you know, what we're seeing is obviously there's a lot of excitement about it, and there's also been a lot of... And I think we've mentioned this and talked about it quite a bit. There's a tremendous amount of excitement still, and there's momentum, and there's a lot of conversations about Nashville. You know, it's that new prototype, it's the new design, it's the-- all those things were in play, and then we still have levers to pull in terms of just continuing to drive that momentum. But a lot of folks, really excited, a lot of things that are in play with the new menu, cocktails, you know, again, successful Tennessee opening. We're really encouraged by what we saw there. So there's quite a few that are lined up as of right now, as you know, the ones that we've talked about. And then we literally had people waiting to come to that opening and said: "Hey, let's get this thing open. Let's do a great job opening it." We got that ceremony. We did the ceremony, the grand opening, ribbon cutting with everyone in the community that we could get, so that we could get this name out there, and it's been really successful. But we also have franchisees waiting to go there, lining up to go there and be introduced via our development team, and those people are coming in as we speak. So we expect that momentum to continue. There's really no pause other than to say, "Hey, let's get this thing out of Florida and see how it can perform for us." We also have 4 cafes under construction, and then, you know, again, these openings next year are pretty accelerated rate, as Robert already talked about. Are the 4 or the 40% of growth this year that's anticipated to be company stores, are you seeding other states for proof of concept, or are you looking to get that kind of operational efficiency in the Tennessee market as a corporate- market? Yeah. And then, May— Go ahead. Go ahead, Robert, sorry. Yeah, so just so Todd, we're really excited by what we're seeing in Tennessee. We already have another corporate cafe under construction in Tennessee right now. We have another corporate cafe in Jacksonville under construction right now. And you will see us move into Texas, seeing Texas as the next corporate area for development. So, but we'll be in places other than Florida and Tennessee this year. Okay, great. And then just a couple to wrap up on Keke's, and I'll get back in queue. Can you speak to—since the program was successful, can you speak to maybe alcohol incidence or lift in check that you saw in the test that, that we should think about for, for AUVs, for the concept? And then the second one, just with the new, the new prototype opening in Tennessee, which looks great from the pictures I've seen online. Thoughts on, is there, is there a point in, or do the franchisees existing in Florida want to go back and rework their units in the new prototype Or is this really a go-forward type of prototype for Keke's? Thanks. That's a lot in there, Todd, and really great questions. So first, to take maybe the last thing that you mentioned in terms of going back in Florida, there are a lot of franchisees really excited about... It's a beautiful building. It's a beautiful design, really leaned into what Keke's is known for and what's special about it with an updated, really bright, fresh look. So I'm glad you got to see that. Pictures don't totally do it justice. It really is a stunning building. The franchisees will go back. There's conversations with a lot of them in Florida to go back and look at paint colors, look at some of the things that they could pull forward. There's really not been a comprehensive remodel program for the Keke's brand up until now. So they're excited about the things that we can pull forward and having those conversations for sure. In terms of the alcohol programs, we're really encouraged by what we're seeing. It's a really simplified approach with mimosas, sangrias, and 5%-7% mix is really what we're seeing there. Higher on the weekends. This is obviously expected, but really in line with what we thought that that would do for us. So it's not been rolled out system-wide. In fact, that Tennessee location did not yet open with it. It's one of those things where we're excited about the potential this has. This is a brand where it doesn't have a honeymoon curve that, like other brands I'm used to, it doesn't have a honeymoon curve where it decreases. It actually grows over time, and we're actually not talking about it just yet because we know it's got the potential, and we've already seen it starting to grow. And again, we didn't open with the cocktails or the alcohol program. We didn't open with some of the other things that we know we can pull, and that will help it to continue to grow for us. So we are excited about what that can do for the Keke's system in terms of rolling that alcohol program, as well as even the remodels and what that could do for the Florida market. Okay. Thanks, Kelli. You're welcome. Thank you. Our next question comes from the line of Jon Tower with Citi. Please proceed with your question. Great. Thanks for taking my questions. Maybe if we could start off on the unit closures, and specifically, I'm just trying to... Maybe you can help us ring-fence how many of the stores are potentially at risk, you know, of closure? I think, Robert, you mentioned earlier that, you know, profitability breakevens are close to $1.2 million now at Denny's. I'm just curious, you know, if you could maybe give us some an idea of like what percentage of the system might be at or near those levels and, yeah, maybe that's where I'll stop for the moment. Yeah, Jon. So I'm happy to try to provide some additional color to that. We assess our Denny's system with regard to the kind of quintiles. I can tell you that our lowest quintile in aggregate is actually above the $1.2 million. So it's only a subset of that lowest quintile that we are really dealing with. The other piece that makes this a little bit harder to predict is that it's made up of the-- There's many franchisees that have restaurants within there, and they all have different motivations, right? So if it's covering the lease cost but not necessarily profitable, it may be a restaurant that remains open in that scenario. So it's hard to say of that subset of units, of that subset of quintile, how many are likely to close near-term. Over time, in an elongated timeframe, you may be looking at half that quintile. But right now, what we're comfortable doing is to guide one year at a time, with what we know and really watch closely, particularly as we move across this year and with the initiatives that we have in place, to hopefully grow out of it. I can tell you that, of these quintiles, the four of them actually grew volume over the course of the pandemic. The only one that did not was that lowest quintile. So if we can get that moving also, it may put less of those at risk. Again, another reason why we're just trying to give that one-year look right now is, as opposed to looking out much further than that. A lot of nuances that go into predicting how many of those will actually close in the near term. Thank you. And I guess on the flip side of that, it sounds encouraging with the new store openings on the Denny's side The first numbers reaching 2017 levels. So I'm just curious, maybe you can give us a little bit of color on where these stores are. Are they more infill? Are they new markets? Are they new franchisees, existing franchisees? Are they effectively relocations of, you know, existing stores? Just curious if you could provide some color. Yeah, happy to do that also. Generally, not offsets, not close this Denny's, open this Denny's. So they're not generally offsets. 90% of the restaurants that close are what we were just talking about, these very, very low volume units. So, it's not that we're not offsetting because of a property control issue, so not offsets. Every year we have new franchisees, somewhere in the neighborhood of, let's say, 4-6 new franchisees, so there, that there, though, there will always be some new franchisee development. But generally, the vast majority of these openings would be infill restaurants from existing franchisees. So that, I think that's probably the best way to look at it. With and now 1,342 franchise domestic restaurants, another 65 company, we're fairly penetrated into most markets. You can go find some, particularly if you look east of the Mississippi, that we could potentially build out. But in general, these are infills into existing markets where we know the Denny's has a lot of strength. Got it. And then, just kind of thinking about California a little bit more in detail. You know, do you have any specific plans to address value in that market, given obviously the changes in pricing structure across the industry coming in April? I mean, are there any explicit plans that you might have to attack the value messaging, whether it's on, you know, building brand awareness with incremental marketing? You know, obviously, you've got a lot of innovation in the pipeline when it comes to product, but I'm just curious how you plan on handling that market specifically in April forward. It's a great, great question, and lots of conversations that we have. We're working very closely with the California franchisees. In fact, we call it our situation room, where we come to them, and we partner with them, both in them sharing, you know, kind of ideas that they might have. Many of them have other brands, many of them have QSR brands, actually. So while we're not in that same situation, of course, being a full-service brand, we're being very mindful of that. So what I can tell you is, you know, the value messaging there, so we've got a, you know, price point at $5.99 in many markets, but in California, $7.99, that's competitive for there. That's been working there fairly well. It's actually been working really well there also. So we'll continue with that messaging. The other thing that we have done, we are re-implementing or reinstituting the co-op program, and so we'll continue to spend at the local level. We'll spend more at the local level, working in partnership with them. So we'll do things unique to the market wherever possible. We're doing our match again for that co-op program, so we're bringing that back after several years of not doing that. And we know that'll help strengthen the market. And then finally, really, really looking to strengthen the top line for them in as many ways as possible. Looking at, I've mentioned this before, but looking at the virtual brands, the things we're testing in off-premise. So not only helping them with analytics, with metrics to understand the effectiveness of their off-premise channels today, but also potentially bringing those virtual brands to them first, bringing those to enable as much revenue that we could possibly help them drive. So that's really the focus for us; it's almost a triage approach with them, and at the same time, you know, you know, making sure just we're available to have the conversation. So we're staying really close to it. Got it. Thank you for taking the questions. Of course. Yeah. Thanks, Jon. Thank you, Jon. Thank you. Our next question comes from the line of Brian Mullan, with Piper Sandler. Please proceed with your question. Hi, good afternoon. It's great to hear about all the momentum with Keke's development, but, just on the franchise comp result for the quarter, could you speak to what is behind the softness there? Is it specific to, like, the Florida consumer, or is there a primary driver you'd point us at? Yeah. So that's a really good question. Florida remains a-- You must have been looking at some of the my cheat sheets that we prepared. Florida is by far the weakest state that we've had. There's actually some good strength throughout the Midwest when you look at New York, Pennsylvania, Ohio, Indiana, Illinois, strength there, but Florida still trails quite significantly with regard to that. And the reality is if you look at the pace of our same store sales across the quarter, October was weaker than November, and November was weaker than December, and December actually showed some significant strength as we got deep into our value messaging, the $5.99, $7.99 Original Grand Slam messaging. So, again, with regard to that, we were pretty pleased on the way we finished out the year. Great, thanks for that. My second question is on 24/7. Now that we're in 2024, I'm just hoping you could give us an update on what% of the store base is back to 24/7 and what your expectations are for the return to 24/7 this year? Yeah, again, really good question. That's really stabilized. When we've looked at it, it grew through about just the July-August time frame. We had a pretty conservative, concerted effort to get back as many as we could to 24/7. And it's kind of leveled off at about the 75% level. And the other piece to note, though, is even if you're not at 24/7, the vast are already over 20 hours. So I think we've stabilized. I don't think you'll see material growth from here, nor do I think you'll see a material slide from here. I think this is somewhat of the new norm. Thanks for the- I think the other reality. Oh, sorry. Thank you. No, no, that's okay. I was only gonna add to what Robert mentioned in terms of just, you know, we just came off the last question on the FAST Act or AB 1228 and the impact there in California. So, you know, we're just always mindful, you know, of the profitability of our franchisees, the health of those franchisees that we talked about. So it's about driving top line. It's about just showing them every opportunity, but also just being the best partner possible. We still know, given the percentage not only of, oh, you know, those that are 24/7 at 75% and holding, but also the amount of hours that we are open, that as a full-service brand, that you know, we are back strong and as strong as many other players that used to be 24/7 and haven't gotten even close to 75% back. So we feel good about it, and yet, you know, given the pressures in some of the states like California, we're just mindful of that. Thanks. You're welcome. Thank you. We have reached the end of the question and answer session. I'll turn the call back over to Curt Nichols for closing remarks. I'd like to thank everyone for joining us on today's call. We look forward to our next earnings conference call in the spring, when we will discuss our first quarter of 2024 results. Thank you all, and have a great evening. Thank you, and this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.