Diner Chain Company Denny’s Explodes After This Announcement

Dennys announced that it would be selling most of its company-owned stores this week, sending shares up over 25% on Wednesday.

The company said on Tuesday that it would sell off most of its remaining company-owned stores over the next 18 months and plans to become 95 to 97 percent franchised.

Mark Wolfinger, the company’s CFO, said on the company’s earnings call that the company is planning to sell around 25 to 30 percent of the 95 properties it owns. Denny’s expects to earn around $30 million by selling the properties off. Proceeds will be reallocated toward purchasing higher-quality real estate, according to the CFO.

“Our refranchising and development strategy will enable us to further evolve as a franchisor of choice that provides more focused support services, all while yielding a higher quality, more asset-light business model,” CEO John Miller said in a statement.

For the third quarter, Denny’s reported earnings of 17 cents a share, compared to 14 cents in the year ago quarter. Revenues were $158.02 million compared to year-ago revenues of $132.38 million.

Disclaimer: We have no position in Denny’s Corp. (NASDAQ: DENN) and have not been compensated for this article.