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Edited Transcript of DENN earnings conference call or presentation 14-May-20 8:30pm GMT

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Q1 2020 Denny's Corp Earnings Call SPARTANBURG Jun 25, 2020 (Thomson StreetEvents) -- Edited Transcript of Denny's Corp earnings conference call or presentation Thursday, May 14, 2020 at 8:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Curtis L. Nichols Denny's Corporation - VP of IR and Financial Planning & Analysis * John C. Miller Denny's Corporation - CEO & Director * Robert P. Verostek Denny's Corporation - CFO & Senior VP ================================================================================ Conference Call Participants ================================================================================ * Brett Saul Levy MKM Partners LLC, Research Division - Executive Director * Jake Rowland Bartlett SunTrust Robinson Humphrey, Inc., Research Division - Analyst * James Paul Rutherford Stephens Inc., Research Division - Research Analyst * Michael A. Tamas Oppenheimer & Co. Inc., Research Division - Associate * Nerses Setyan Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst * Todd Morrison Brooks CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day, everyone, and welcome to the Denny's Corporation First Quarter 2020 Earnings Call. Today's call is being recorded. At this time, I would like to turn the conference over to Curt Nichols, Vice President, Investor Relations and Financial Planning and Analysis. Please go ahead, sir. -------------------------------------------------------------------------------- Curtis L. Nichols, Denny's Corporation - VP of IR and Financial Planning & Analysis [2] -------------------------------------------------------------------------------- Thank you, Christie. Good afternoon, everyone, and thank you for joining us for Denny's First Quarter 2020 Earnings Conference Call. With me today from management are John Miller, Denny's Chief Executive Officer; and Robert Verostek, Denny's Senior Vice President and Chief Financial Officer. Please refer to our website at investor.dennys.com to find our first quarter earnings press release along with any reconciliation of 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. John will begin today's call with a business update. Robert will provide a recap of our first quarter results and current trends before commenting on our recent credit facility amendment. 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 on 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 25, 2019, and in any subsequent Forms 8-K and quarterly reports on Form 10-Q. With that, I will now turn the call over to John Miller, Denny's Chief Executive Officer. -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [3] -------------------------------------------------------------------------------- Thanks, Curt, and good afternoon, everyone. We hope that you and your families are staying safe and healthy during these challenging times, the COVID-19 pandemic and related restrictive government mandates are having an unprecedented impact on our industry and our brand. And while we started the year with solid results in our fiscal January and February periods, things changed quickly in the latter weeks of the quarter as stay-at-home directives were implemented along with mandates requiring dining room closures. We were required to make equally swift adjustments in our business, and I'm proud of how well our team and our network of franchisees work so well together to implement these changes in a matter of days. As our business was abruptly limited to off-premise sales channels only, we were fortunate to already have an established off-premise business through our Denny's on-demand platform. Prior to the pandemic, off-premise sales represented approximately 12% of our business, and nearly 60% of these transactions were pick-up orders with delivery orders representing the balance. As our business was shifting, we were able to accelerate some national broadcast media to feature a free delivery message when ordering through our website or mobile app, while also introducing a contactless delivery option. We have continued to feature free delivery while transitioning media to digital and social channels. We also quickly implemented a dine-thru curbside program to build pickup transactions and over 700 company and franchised restaurants adopted the curbside service. As a result of these efforts, average unit volumes for off-premise sales more than doubled between February and April, with pickup representing 57% of April transactions. Of the remaining delivery transactions, 28% were attributed to third-party partners in April with the balance of delivery transactions coming through our website or our mobile app. And beyond reminding guests of our existing Denny's on Demand platform and implementing curbside service, we developed a streamlined menu that was optimized to feature some of our more popular products. It also allows for greater kitchen speed and efficiency as restaurants adjusted to significantly reduced staffing levels. We encourage online ordering, but restaurants can also download and print stream live menus for single-use by our guests. Earlier this week, we introduced a slightly larger menu, which added more of our popular products back. Shareable family meal packs were also quickly developed and brought to market initially featuring Grand Slam, Cheeseburger and chicken tender meals for feeding a family of 4. Where permitted, we introduced Denny's market, creating an opportunity for guests to purchase certain grocery items out of our pantry, and over 400 Denny's restaurants have adopted this program, enabling one-stop shopping for our guests to order some of our signature menu items as they always have and at the same time, add a few grocery items to their order. Communication and collaboration have been critical elements in our program. We developed and shared training materials with all franchisees and restaurant managers in preparation for the impact of the pandemic. We have conducted nearly 30 calls with our system, sharing key information and best practices in this challenging time in addition to daily system e-mail communications. In advance of jurisdictions starting to ease dine-in restrictions, our training team did a terrific job developing additional materials focused on our newly implemented health and safety measures, and these were designed to protect the well-being of our guests, restaurant teams, employees, suppliers and the public at large. Our new initiative includes best-in-class practices for operations, customer service, cleaning and sanitation and new social distancing measures. To that end, we are encouraging all restaurants to have a dedicated sanitation specialist who is tasked with disinfecting services following every guest visit. This person wears an arm band or vest that identifies their role and leaves a card on every table, notifying new guests that the area has been disinfected. To ensure the highest level of cleanliness and sanitation, our high-touch services will be regularly deep cleaned using a 2-step process, clean and disinfect then sanitize. We've also removed high-touch items like table caddies and condiments from tables and continue to utilize single-use menus. Our employees are expected to wear facemask and gloves, and we've supplied all restaurants with instructions and supplies for mandatory temperature checks using no-touch forehead thermometers. Temperature checks are necessary for employees as well as vendors and service personnel entering the restaurant. Employees will be required to wash their hands and apply an alcohol-based sanitizer every 20 minutes. In addition, guests will also have easy access to hand sanitizer, and we are encouraging the installation of sanitary shields at each cash register. Social distancing within restaurants is mission-critical. We are rearranging our dining rooms to accommodate proper social distancing measures and have supplied stores with signage to mark tables that are not currently in use. We have developed merchandising that highlight social distancing and other guests safety measures with floor decals, signs, door clings, roadside banners, yard signs, posters and table cards, just to name a few. With these measures in place, we're confident that we can deliver the same high-quality food and great experience that Denny's is known for and to do so in a safe manner. We will be sharing these enhanced health and safety measures with consumers to provide them with confidence to enjoy a great Denny's meal in one of our dining rooms where permitted. In addition to the health of our guest and the general public, we have been focused on the financial health of our franchisees. Direct financial relief has consisted of an immediate deferral of remodels until further notice, a deferral of royalties and advertising fees for fiscal week 11 and the full abatement or forgiveness of such fees for fiscal weeks 12 and 13. And we also provided a 12-week lease deferral for franchisees operating in the 73 properties owned by the company. Our development team has aggressively pursued rent relief in the form of abatements or deferrals securing such relief for approximately 75% of the leases in which the company is a lessee. We are extending that same relief to franchisees who sublease from the company. Furthermore, we have worked closely with key vendors and primary third-party banks who lend to our franchisees to secure additional relief on their behalf. And I want to take a moment to personally thank our little brand partners who, while enduring equally challenging times in their businesses found the ability to provide much-needed relief to our franchisees. Most of our franchisees are small, locally owned businesses that have actually felt the economic burden of this crisis that's been caused. In fact, over 70% of our franchisees operate 5 or fewer restaurants, and we still have 80 franchisees operating a single restaurant. That is why federal stimulus programs are critical to our franchisees' survival and ability to protect local jobs. We fully support their individual decisions to apply for and secure economic aid during this time. To date, franchisees representing over 82% of domestic franchise restaurants have received funding under the payroll -- the Paycheck Protection Program with another 7% approved and awaiting funding. In addition to implementing a number of cost savings measures, we also entered into an amendment to our credit facility yesterday. Robert will share more details on both of these items in just a moment. As of May 13, 2020, approximately 82% of domestic Denny's restaurants were operating with some limited capacity dining rooms, most still with off-premise sales channels only at this point. Let me close by reminding you that our brand was founded on a simple principle, "We love feeding people." That is why even in these challenging times, our restaurant teams have donated over 15,000 free meals to first responders and medical teams. That passion for feeding people runs deep in our franchise system and drives our collective resolve to quickly adapt to these current challenges while doing everything we can to continue safely serving our guests and the communities in which we live for many years to come. I'll now turn the call over to Robert Verostek, Denny's Chief Financial Officer. Robert? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [4] -------------------------------------------------------------------------------- Thank you, John, and good afternoon, everyone. As John mentioned, these are indeed unprecedented times. I will start with a brief review of our first quarter results then share some perspective on recent trends and wrap up with an update on our liquidity position, including details around the credit facility amendment we entered into yesterday. As John noted, we started the quarter on a solid footing, delivering domestic system-wide same-store sales of over 2% through our January and February fiscal periods. Due to the early impacts of COVID-19, particularly in the last 2 weeks of the quarter, domestic system-wide same-store sales for our March fiscal period were down 19.4%, ultimately yielding a same-store sales decline of 6.3% for the quarter. We ended the quarter with 1,695 total restaurants as Denny's franchisees opened 8 restaurants. These openings were offset by 15 franchise restaurant closings and 1 company restaurant closing. Franchise and license revenue increased 2.9% to $54.4 million primarily due to our refranchising and development strategy that was substantially complete at the end of 2019. This was partially offset by the early impact of COVID-19 on sales at franchise restaurants and a related abatement of approximately $1.9 million in royalties and $1.2 million in advertising fees for the last 2 weeks of the quarter. Franchise operating margin was 46.4% compared to 48.8% in the prior year quarter. This margin rate decrease was primarily driven by the royalty abatement and a $1 million bad debt allowance on franchise-related receivables due to COVID-19, partially offset by an improved occupancy margin. Company restaurant sales of $42.3 million were down 57.1% due to 102 equivalent unit decline in our portfolio as a result of our refranchising and development strategy as well as the early impact of COVID-19 at the end of the quarter. Company restaurant operating margin of 14.6% was flat compared to prior year quarter. This was because of increase in occupancy-related expenses from refranchising restaurants where we own the real estate as well as an increase in general liability costs primarily due to higher property insurance costs were offset by a decrease in other operating costs. Total general and administrative expenses were $7.7 million compared to $18.8 million in the prior year quarter. The decrease was driven by accrual reversals associated with both our short-term incentive plan and long-term share-based compensation plan based on revised achievement expectations, market valuation changes in the company's deferred compensation plan liabilities and the rationalization of certain business costs in connection with our refranchising and development strategy. These results contributed to adjusted EBITDA of $15.7 million. Depreciation and amortization expense was approximately $2.1 million lower at $4.1 million primarily resulting from a lower number of equivalent company restaurants due to our refranchising and development strategy. Interest expense was 4.1 -- $4.0 million compared to $5.4 million in the prior year quarter primarily due to lower interest rates, lower average credit facility borrowings and a reduction in financing leases. The provision for income taxes was $2.3 million, reflecting an effective income tax rate of 20.5%. Adjusted net income per share was $0.17 compared to $0.13 in the prior year quarter. Adjusted free cash flow after cash interest, cash taxes and cash capital expenditures was $9.0 million compared to $7.2 million in the prior year quarter primarily due to decreases in cash capital expenditures and cash interest. Cash capital expenditures, which included maintenance capital and remodels, was $2.8 million compared to $7.8 million in the prior year quarter. After drawing down $40.5 million under our credit facility near the end of the quarter, our quarter end debt-to-adjusted EBITDA leverage ratio was 3.6x and we had approximately $334 million of total debt outstanding, including $318 million under our credit facility. We allocated $34.2 million towards share repurchases during the quarter, but suspended share repurchases as of February 27, 2020, and we terminated the 10b5-1 trading plan on March 16, 2020, and as communicated in our press release that same day. As previously announced on March 16, 2020, we withdrew our guidance for the fiscal year ending December 30, 2020. Given the dynamic and evolving impact of COVID-19 pandemic on our operations and substantial uncertainty about future performance, we cannot reasonably provide an updated business outlook at this time. Turning to recent trends. We have seen sequential improvement in domestic same-store sales performance following our low point of negative 80%, which occurred in the final week of the first quarter. Our domestic same-store sales results for fiscal week 19 improved to approximately negative 68%. It is worth noting that restaurants with sales in both the current year fiscal week and the equivalent prior year week are included in the same-store sales calculation. The domestic same-store sales results for the second quarter are impacted by many restaurants operating with reduced hours particularly at late night in response to the pandemic. We exclude from our weekly same-store sales calculations, only those temporarily closed restaurants that are closed throughout the week. Any locations that report sales for portions of a week are included in the weekly calculation. As John noted earlier, we have seen a number of jurisdictions start to ease restrictions on dine-in service. With approximately 36% of a total week of sales in our restaurants occurring between Friday late night through Sunday lunch, a 50% dining room capacity limit would likely impact Denny's restaurants for only a few hours during weekends. Currently, there are 521 Denny's restaurants operating with dining room capacity limitations across 21 states. Same-store sales for locations that have been operating with open dining rooms for a full week are trending down approximately 50%, with dining room sales down approximately 68% and off-premise sales channels up approximately 105% compared to the prior year. Now I would like to provide some perspective on breakeven sales levels for restaurants. In an off-premise-only scenario, a Denny's restaurant would need sales of approximately $1,500 per day to cover food costs, team and manager labor and other variable costs. The average volume of off-premise-only Denny's restaurants exceeded this sales level in late April. Dining room service requires more staff, so our variable cost breakeven, inclusive of management labor would be approximately $2,000 to $2,500 per day. This would represent a sales level equivalent to approximately 55% of the average unit volumes generated by Denny's domestic franchise units in 2019. In an effort to reduce our use of cash, we implemented numerous cost savings measures, including suspended travel, canceled in-person field meetings, placed holds on all open corporate and field positions, significantly reduced restaurant level staffing across the portfolio, meaningfully reduced compensation for the Board of Directors and multiple levels of management and furloughed over 25% of the corporate office. While furloughed, the company has covered the benefits cost normally borne by the impacted employees. Unfortunately, with the uncertain length and magnitude of disruption of the pandemic on our business, we had to make the difficult decision to part ways with roughly half of those furloughed employees earlier this week. Severance costs for those impacted will be captured as a component of operating gains and losses and other charges net in our fiscal second quarter, while related payments will be made over the severance benefit period. Yesterday, May 13, 2020, we successfully entered into an amendment to our credit agreement. The amended credit agreement suspends the testing of the leverage ratio and the fixed charge coverage ratio until the first fiscal quarter ending March 31, 2021, at which time modified leverage ratio and fixed charge coverage ratio covenant testing will resume. The amendment adds a monthly minimum liquidity covenant defined as the sum of unrestricted cash and availability under the credit facility. Through the date of delivery of our financial statements for the fiscal quarter ending June 30, 2020 -- 2021, we will be unable to repurchase shares or make certain investments. Capital expenditures will also be restricted to $10 million through our first fiscal quarter ending March 31, 2021. We are extremely appreciative of the long-standing relationships we have had with our participating banks in our credit facility and the way in which they have continued to support our business. In these challenging times, our management team is focused on managing business costs while supporting Denny's recovery as dining rooms reopen. In doing so, we will leverage the strength of our asset-light business model to generate strong cash flows, which we are committed to using to reduce leverage in the near term. 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. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) And first, we'll go to Nick Setyan from Wedbush Securities. -------------------------------------------------------------------------------- Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [2] -------------------------------------------------------------------------------- John, I guess, bigger picture before any sort of specific questions, how do you compare the breakfast offering and the breakfast daypart relative to some other -- obviously, dayparts within the category? And how are you thinking about sort of addressing the potential changing habits, et cetera, that we're seeing, not only in the near term, but over the longer term? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [3] -------------------------------------------------------------------------------- Nick, it's great question. First of all, throughout the quarter, because the pandemic hit late in the quarter, it's hard to use that as a judge for what's happening today and what we expect to continue. There's no question that post pandemic, the pace at which things get back to normal or a new normal we'll be carefully watching, and we do not expect things to return to where they were anytime soon. One of the things sort of big picture that are going on, of course, is the heightened desire for convenience through technology, pickup delivery and family bundled meals, meal packs. You noted that we did quite a number of stores participated in a little bit of a grocery task. It's not a brand standard by any means, but it gave us an opportunity to manage inventory, but also to provide a one-stop shop service for consumers. So whether or not things like that persist over time, it's too early to say. But what I would say is the -- our franchise partners in collaboration with the Denny's leadership team, ops development and marketing team, all moved really quickly to listen and learn to what consumers expected from us and to adapt quickly. Some stores closed. Some stores operated dine-thru operations on the parking lot, some just allow -- stayed open for delivery and pickup and did not feel compelled to set up cones and parking lot host of stands and the like. So -- but we've got a lot of learning through the number of stores that participated through that, Nick. And I would expect that as dining rooms start to build back up and customers feel more comfortable and unemployment falls and momentum builds in the economy over time, some will return to normal and some, there is an expectation for complete touchless thick plates on bathroom doors, sneeze guards at registers, gloves and masks, puerile stations everywhere, people don't want to enter their ZIP code at the gas station. They don't want to touch anything. So I think some of these things will persist and you'd expect that our brand would be at the forefront of accommodating what consumer expectations are as this unfolds and unwinds. As far as breakfast daypart, it was our strongest daypart. The worst, of course, was late-night because we closed early to save hours for franchise system, one of the early adaptations we made. And -- but breakfast daypart continues to be very strong, and the breakfast mix continues to be very strong, mixing in the low 60s all day for Denny's. Prior to pandemic, breakfast as a daypart is roughly as product mix just in the low 60s, but as a daypart, call it 28%; lunch, 36%; dinner, 20%; and late night, 16% making up 100% of our daily sales. -------------------------------------------------------------------------------- Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [4] -------------------------------------------------------------------------------- And the other question that top of mind right now is the off-premise growth. And not just necessarily family dining, but in casual dining, we've seen a big variation, some as much as over 50% of their current sales are now off-premise. Comps down 40%, 45%. What accounts do you think for that big gap among the different concepts? How can Denny's bridge that gap in the near term? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [5] -------------------------------------------------------------------------------- Yes. I think it's bridged by awareness. Free delivery certainly helps raise awareness because we have breakfast and lunch equities over dinner and late night, you'd expect us not to fare as well in the early going as casual players that have more of their all day daypart mix already skewed toward dinner. I think the overall trend that wouldn't be lost on any of our peers or competitors and certainly not Denny's in that that's very different on the weekends. My need is I got to get out. I need to breathe the air, I have cabin fever. There is -- I don't want you to make me wait, but don't rush me. Whereas during the week, after 5 dinner sales in casual or family, I think, a consistent theme is we are time pressured. We have -- we are multitasking. We're doing homework with the kids or honey do items at home or extending our workday. And so the need for convenience will persist. And I'd say that's true across all retail, health care, restaurants, casual, fast food, whatever it might be, the consumer is looking to eliminate pain points and technology will play a role in that and adapting service style will play a role in that. So how Denny's expects to adapt is to make sure that we have the right pieces and components for our customers to use. There are -- even in the third-party delivery, they're not all equal. Some of their apps were just a little easier to use, and you see over time, how a preference is being developed by consumers of a couple over the 4 or 5 major players just over convenience alone. So that's very telling, Nick, of the consumer expectation. They have -- they're demanding of some level of perfection and the technology works and serves them. So we have to make sure Denny's is able to provide that as well. I also -- I don't want to understate the point. I don't want to take up more airtime than necessary here, but just to emphasize the point that anything you can do to signal sanitary environment is critically important right now. And so we're taking extra steps there. We outlined some of those things on our call. So there is an expectation of distancing and mask, but also all these other things to go touchless will more and more be consumer expectation and table stakes across the industry, in my view. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- And next, we'll go to Todd Brooks from CL King & Associates. -------------------------------------------------------------------------------- Todd Morrison Brooks, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [7] -------------------------------------------------------------------------------- Apologies. So I was on mute. I hope you're all well. Robert, when you were talking about the dine-in states and -- where we've opened stores down kind of 50% same-store sales. Can you give a stab at what the blended capacity restrictions are if you look across the units where they fall closer to 25% than 50%? Are they split right in the middle or? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [8] -------------------------------------------------------------------------------- Yes. That's an excellent question, Todd. I can give you kind of a sense. We -- of those 521 in the 21 states, 75% of those units are in 5 states. So that's Texas, Florida, Arizona, Nevada and Utah. So to give you a sense, Texas is at 25% capacity. So is Florida. Arizona just is using the terminology social distancing. That's about 71 units for us. And then Nevada, 30 -- around 30 units at 50%. So when I look across this board, my sense is, I mean, it's all over the place, Todd. And I think I would work you back to the point that I was trying to make within the script with regard to the idea that there are only a handful of hours over the weekend time frame where those capacity constraints really may come into play. But to give you a sense, I would say right now, it's probably in between that 25% and 50% on a blended average. -------------------------------------------------------------------------------- Todd Morrison Brooks, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [9] -------------------------------------------------------------------------------- Okay. Great. And just a follow-up because you did say, I think it was Arizona was just socially distanced. If we get from mandated capacity restrictions to just a space-based restriction and you look at the restaurant, and if you have to do the 6-foot separations, where do you think your capacity would level out if it was just socially distance as the guideline or maybe what are the Arizona capacities look like with that guideline? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [10] -------------------------------------------------------------------------------- Yes, Todd, a great follow-on there. When you look at the socially distance and you look at the different requirements with regard to the distance by feet, that actually gives us more capacity within those units, not less. We can rearrange the tables appropriately to capture even more than these -- the 50% top line that many of these states are showing. So that would give us more capacity. -------------------------------------------------------------------------------- Todd Morrison Brooks, CL King & Associates, Inc., Research Division - Senior VP & Senior Research Analyst [11] -------------------------------------------------------------------------------- Okay. Great. And then just a final question. The 18% of stores that are closed, as you're looking at that base of temporary closures, what's the trigger that you start to see those kind of continuing to reopen here? Is it dine-in open in their markets? Does it dine-in open at 50%? What are your thoughts of what's going to work that number down over the second quarter? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [12] -------------------------------------------------------------------------------- Yes. The trigger going into that was a mixed bag. Part of it is motion, a franchisee not knowing they could rely on the PPP or not certain that, that would come in. So you have this broad array of franchisees, some that have really good balance sheets that recently made investments in restaurants and maybe sort of capped out or levered to maybe the extent of their credit. But otherwise, really good franchisees, but a little more nervous about running out of cash. So liquidity played a role in some of those. And then some are just really sleepy little areas or some are resort areas that went sleepy really fast. So each has their own varied set of circumstances. As far as the reopening is concerned, I think to some degree, the franchisees will be looking to sort of reloading, restaffing, reopening inventory and then waiting for a 50% or better because of just the gear up cost. So I think a good portion of those will come online when it's more reliably past the 25% mark in their jurisdiction. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- And next, we'll go to Michael Tamas from Oppenheimer. -------------------------------------------------------------------------------- Michael A. Tamas, Oppenheimer & Co. Inc., Research Division - Associate [14] -------------------------------------------------------------------------------- You mentioned that the same-store sales units with dining that are open are down 50%. Just wondering, can you talk about what you saw about how consumers use the brand, what's the off-premise mix during that time frame versus the dine-in? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [15] -------------------------------------------------------------------------------- Sure. I'll start the answer and turn it over to Robert for anything I might have missed. But let's just use Texas as an example, with 25% capacity. The stores opened up and still because of a wary consumer or a little nervous, and some would say a schizophrenic message. That's not to disparage Governor Abbott in Texas or what he's trying to do to keep the public safe. But from a retail interpretation, socially distancing makes sense when someone's going to their grocery store and keeping 6 feet apart, or the gas station or the Home Depot. And then when they go in the restaurant, it's 25% capacity. So some argued that, that wasn't the most rational thing to unfold. And so with that, there was a lot of debate of whether or not it was really safe to go out to eat, but it's perfectly fine to pick up some screws and a hammer. So I think that message created a little bit of a slower pickup to dine in. And frankly, the business picked up faster than the dine-in business picked up. So to go was really accelerated. Then I think that continues to evolve daily. So it's -- I would not say it's a reliable predictive measure, but the early going is kind of all over the place. And Robert, would you -- you want to add anything to that? I think to go persist way higher and then dine-in is picking up slowly. -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [16] -------------------------------------------------------------------------------- That was the exact point I was going to add on, John, that we are still maintaining the -- to go off-prem has nearly doubled over this time frame. So with the advent of additional on-prem seating coming into play, we've been able to still maintain that really robust off-premise business even as the restaurants have come back online for in restaurant seating. -------------------------------------------------------------------------------- Michael A. Tamas, Oppenheimer & Co. Inc., Research Division - Associate [17] -------------------------------------------------------------------------------- Perfect. And then I think you mentioned somewhere around 90% of your franchisees either got or still waiting to be funded from some of these federal programs. And then just mentioned in response to prior question, some jitters from franchisees about potentially reopening some of those closed units. So I guess the question is, do you think that the federal programs out there are enough to get the franchisees that are jittery to reopen and be successful at reopening? And then just broadly across your franchise base, do you think that there's enough out there that can help bridge them until the environment does improve? Or do you think they're going to have to get a little creative between now and then as some of these programs potentially wear off or just don't have enough funds? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [18] -------------------------------------------------------------------------------- So -- yes, thanks, Michael. With regard to the programs, as you have seen, as this evolution has kind of taken place through time, these programs have evolved, come into play, been bolstered again with regard to the PPP with the second tranche. And the reality is one of the constraints now that's being looked at is this 8-week time frame for the forgiveness. I think many would hope that, that may be extended. And if that works to the extent, I think that would go a long way. With regard to becoming creative, I think many of the franchisees have already become creative with regard to ensuring that they will be able to reopen. And we have worked, as we noted in these commentaries with many of their lessors. We sit in the master lease position on many, and we've worked with many of those lessors to get deferrals and abatements. We worked with banks. We know many of the franchisees, the primary franchisee lending banks, and worked with them. So again, the liquidity that we have put in place has really relieved a lot of the early-on tensions and anxiousness. And we will continue to work down that path to bolster the liquidity to ensure that we can get reopened at the appropriate time as these -- as on-premise becomes more widely available. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- And next, we'll go to James Rutherford from Stephens. -------------------------------------------------------------------------------- James Paul Rutherford, Stephens Inc., Research Division - Research Analyst [20] -------------------------------------------------------------------------------- Robert, just first on housekeeping, excuse me. What assumptions go into those unit-level breakeven figures that you gave us? Specifically, does that include normal grant and royalty in the ads fee? Is it like a sustainable kind of long-term breakeven figure? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [21] -------------------------------------------------------------------------------- Yes. So great question, James. For clarity, it would include the variability of the ad fee. It would include the variability for franchisees with regard to royalty. With regard to the more fixed components, the rents that you just mentioned, they would not include that. It's hard to make a supposition around that for the fact that we build -- in all cases, we don't know the lease terms of all the franchisees or whether they own that unit or the debt that they may have on that unit. So it really includes all of the variable costs, except for those 2 larger pieces. Yes, so the other piece there that you may get into -- to take into consideration is somewhere between the 2,500 to 3,000 level, you start to cover the majority of those fixed costs. So it's not this you got to go from 55% capacity to 95% to get there. So with each sequential step, you're covering more and more of that but right now, given where the -- as you would suspect, as you've seen Curt report in numerous 8-Ks, 80% -- a negative 80% same-store sales, 55% -- 50% same-store sales is a dream. And we will continue to work to get far beyond that. -------------------------------------------------------------------------------- James Paul Rutherford, Stephens Inc., Research Division - Research Analyst [22] -------------------------------------------------------------------------------- That's very helpful. And as a follow-up and kind of circling back on the decision to open the dining room. If I got my math correct, it seems like you're picking up initially about an extra 20% lift or improvement in the comp when the restaurant reopens. And that's just going from the negative 68% in the most recent week to negative 50% for those that have reopened, which is about, I think, $900 a day or so, if that's the right math. And it also looks like the cost to reopen the dining room adds about $500 to $1,000 per day in cost. So it's -- the point I'm making is it seems like it's close to breakeven initially to reopen the dining room. So is that math correct? And if so, kind of what's the incentive initially for these franchisees to open back up? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [23] -------------------------------------------------------------------------------- So your math is correct. We would support generally that you certainly are in the ballpark with that. The reality is as you open back up, you ensure that you can open up and you can -- we've seen sales build upon themselves. So just the notion that you are open kind of feeds upon itself. And with very limited perspective, only a week or so with on-prem business, we are still getting and learning all of those various insights there. John, other thoughts on the benefits to getting open more quickly? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [24] -------------------------------------------------------------------------------- Well, obviously, you have to get momentum with staff. Employees need a certain number of hours a week to make it worth it to come off on employment. And so building cook hours in stages and then another cook and then building hours and then stages and then another server. All those things play a role. The dynamic of managing inventory and menus, the menu will get larger as the dining room goes back up again. So we sort of staged from a very small menu to -- we've added some items back, and then we'll continue to do that as sales increase. So it's -- all these things play a role in what a small staff can do and then what a larger staff can do on the line. But it also builds momentum and sort of hopefulness. You can see I toured quite a few restaurants yesterday with 1 of our larger franchisees, a 61-unit franchisee that has operations in Texas and Florida. And we -- it was just good to see cars on the parking lots. We toured competitors, fast food restaurants, fast casual and then quite a number of Denny's. And then you can just see the excitement of some of the guests to be able to sit down and be waited on. And so it's nice to see the momentum starting to slowly build. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- And next, we'll go to Jake Bartlett from SunTrust. -------------------------------------------------------------------------------- Jake Rowland Bartlett, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [26] -------------------------------------------------------------------------------- And I appreciate all the hard work you guys are doing right now, this tough time. My question was about the cash burn rate. In some companies, some of your peers have provided kind of on a weekly basis or a monthly basis, but kind of assuming a level of same-store sales. What would you estimate your kind of -- the overall cash burn rate to be? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [27] -------------------------------------------------------------------------------- Yes. So to frame that up for you, Jake, excellent question. What we can tell you is that in the month of April, our cash burn rate was somewhere in the $5 million to $7 million range for the month. So you break that down, that is somewhere between $1 million, $1.8 million on a weekly cash burn basis. Some of the things to take into account there is the idea that we are working -- we have a working capital deficit. So as you -- as the restaurants were closing down, we had that burn off. So that was somewhat taken into account in that cash burn rate. So that is one thing to note. The other piece of that is not wanting to be prospective with regard to that. That's why we are trying to focus everybody on these kind of these breakeven restaurant level, the $1,500 for off-prem and $2,500 for on-prem because the reality is that we move more and more of the units on there, 520 are on-prem now. We move more and more of the units into that status, that cash burn rate goes down. So I think what I can offer is that the -- kind of the worst of the cash flow burn rate would be in that $5 million to $7 million range, which represented really April. -------------------------------------------------------------------------------- Jake Rowland Bartlett, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [28] -------------------------------------------------------------------------------- Got it. Got it. And then just to clarify, maybe you've given the kind of the weekly sales, but and I think I'm calculating or it looks like I'm calculating about -- the same store sales would have to be somewhat north of 50% to be breakeven, including some of the G&A on the store level? Or what has been running was down much more than that. Is that right? What is the exact kind of breakeven that a franchisee, not really just you, but a franchisee would have to see to be breakeven at the -- I guess, at the store level? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [29] -------------------------------------------------------------------------------- Yes, Jake, I think you're in the ballpark there. I think that's what we're trying to relay with that $2,500 -- $2,000, $2,500 per unit. That is in that 50% to -- 45% to 50% range. So I think you're spot on it with that breakeven level. That's what we're trying to relay. -------------------------------------------------------------------------------- Jake Rowland Bartlett, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [30] -------------------------------------------------------------------------------- Okay. And then maybe if you can just explain a little bit more about the capacity constraints and what that means for you. I think you made the comment that it was only a few hours on the weekend that it would really impact you, but I know how important kind of Sunday brunches or something like that. Can you maybe help us understand just a little bit more of kind of what your typical capacity is and what -- at a 50% capacity constraint, what that actually means? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [31] -------------------------------------------------------------------------------- Yes. So Robert can you give sort of more of the financial precision here. But just big picture, every segment of the industry has its own rhythm. And ours, 24 hours, 7 days a week, basically has less pressure on any particular, dayparts are spread out. There's not a lot of peaks as a result until you get to the weekend where Saturday and Sunday -- Friday night, Saturday and Sunday represents some places where we go on waits. And so being fully listed would mean a lot to our brand on Saturday. But Sunday afternoon through Friday afternoon, there's -- we don't have the same bell curves as the casual business does without the breakfast and late night for 24-hour-a-day part. So it affects us less during the week and more on the weekends. So it's just very different between us and other brands. So therefore, building servers and cooks for us at 25% to 50% makes sense to start bringing people on because you can't get them really interested in the role only to work Saturday and Sunday, whereas another segment maybe really waiting for 50% or higher because of their peaks, they require them differently than we do. So I don't know if that helps or not. -------------------------------------------------------------------------------- Jake Rowland Bartlett, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [32] -------------------------------------------------------------------------------- Yes, that helps. I was wondering whether there was actually a disadvantage to how kind of -- maybe how kind of focus your business was on the weekends, but it sounds like it's an advantage to be so spread out. And I guess... -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [33] -------------------------------------------------------------------------------- Well, it's an advantage to start at less than 50% capacity to start to gear back up again. I wouldn't call that an advantage per se. It's just a restart advantage for a few weeks. It's not material. -------------------------------------------------------------------------------- Jake Rowland Bartlett, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [34] -------------------------------------------------------------------------------- Right. Right. And then I look in a state like Georgia, we've been tracking how many stores you have opened or open for dining -- dine-in. And it seems like about half are -- have dine-in available from what we can tell, that's a capacity that's at 50%. I mean I think you kind of addressed this question or you did address this question a little bit earlier, but what needs to change for those dine-in source for the dine-in to open, say, in Georgia? And then also, what have been the trends over the last couple of weeks as you've -- you told that's kind of the state that tenant opened the longest, if you could share any sort of trends there, if you can see one. -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [35] -------------------------------------------------------------------------------- So let me -- I'll start with that question with regard to George. I do think I would point you back to John's comments in that sitting here at the moment, I couldn't tell you exactly which half are open in Georgia. But the reality is that the determination on whether a unit opens or not has different dynamics to it, as John pointed out, with regard to whether it could be a tourist location that may not have come back to life yet. Or the other complications of that. I would say, in general, again, kind of pointing you back to the top 5 states, if you looked at Texas, Florida, Arizona, Nevada, Utah and the numbers that are reopened. Again, we nearly have 200 reopen in Texas. So the majority of Texas came back online fairly quickly. So I think there is a propensity for states that have opened on-premise dine-in for the franchisee to get back at it pretty quickly. So I think it's more of the unique case that may be -- where they have the opportunity to be on-prem, but have not taken that opportunity at that point. -------------------------------------------------------------------------------- Jake Rowland Bartlett, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [36] -------------------------------------------------------------------------------- Great. And then last question. Is there any changes you made with your marketing weights in the quarter, whether it be television or digital, the money have impacted your results versus casual dining as a whole or versus some of your competitors were either pulling back quicker or maybe continuing on? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [37] -------------------------------------------------------------------------------- Yes. So we focused our efforts on pre-delivery switch to some social digital channels to make sure, that was known, take advantage. Remember that family dining is, of all the full-service players out there, the lowest in overall to go sales, even though Denny's on Demand program has been successful for us. We're still a few hundred basis points behind our casual peers in total off-premise sales. So building momentum for that, especially with people staying at home and wanting to really focus on dinner where you can -- if you're at home, shelter in place, you can take care of breakfast and lunch pretty easily. So the focus on the off-premise or delivery dollars would have been in after 5. So we want to make sure we didn't -- that we could really optimize our Denny's on Demand platform. So free delivery messaging and a general focus on value seems to have played well for our brand. We also mentioned that a lot of quick work to get signage, streamers, banners, yard signs, sometimes tension awnings and exterior host of stands, cones for drive-thru curbside, we did a lot to call attention to ourselves where otherwise people may have just forgotten about a family diner for the weekend if they weren't going to go out. So we tried to create some prominence and visibility around our ability to sell to go food. We did some of those groceries sales. And anything we could -- even if they were low-margin in the case of groceries, are just strictly for the benefit of convenience for our customers. And to call some attention to ourselves. So that was the focus. And I'd say that fared well on a couple of fronts. One, I think the results improved where we would have been without those efforts. Number one, number two, I think our franchise community working side-by-side with us to move quickly to adapt was -- is great for our culture inside our brand to have the high degree of engagement and collaboration. Remember, we -- with our steering committee, the chairs of all of our brand advisory council, we were meeting twice a week and sometimes more often at that and lengthy calls to talk about our next step. So I think that's what you'll see. You'll see more of that throughout the balance of the year, I'd say, among all full-service peers, a focus on to go and delivery and family packs, bundled meals, homely replacement options. More of those kinds of things that eliminate pain points and provide convenient options for families. And Denny's is, of course, proud of the initiatives we have on each of those as well. -------------------------------------------------------------------------------- Operator [38] -------------------------------------------------------------------------------- And next will go to Brett Levy from MKM. -------------------------------------------------------------------------------- Brett Saul Levy, MKM Partners LLC, Research Division - Executive Director [39] -------------------------------------------------------------------------------- I hope everyone is doing well. I appreciate all of the color. I think you said this, but I might have missed it. Did you say what percentage of stores are currently generating either $1,500 per week or $2,000 per week? And also for the units that are open, you said off-premise sales have been up 105%. What were those trending at before we had the dining rooms reopen? And then I have 2 franchise questions. -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [40] -------------------------------------------------------------------------------- Yes. I'll let Robert talk about the sales that we reported for the quarter and the early look into Q2. I don't think we have a specific number of stores that are at or above a breakeven number. The -- I'm sorry, I should have used my pencil, the second part of your question was... -------------------------------------------------------------------------------- Brett Saul Levy, MKM Partners LLC, Research Division - Executive Director [41] -------------------------------------------------------------------------------- You gave us 105% of off-premise growth for units that were open with dining rooms. What was that trending at before the dining rooms were open? -------------------------------------------------------------------------------- John C. Miller, Denny's Corporation - CEO & Director [42] -------------------------------------------------------------------------------- Yes. So the -- we did -- I think the -- going back to the script, we were going into this call it, 12% wrapping up the year. -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [43] -------------------------------------------------------------------------------- That's correct, John. And it nearly doubled as we moved into the only on-prem business there. So -- and with regard to on-prem, I'll tell you that we got about 521 units, and I'll tell you that about 18% of the U.S. still remain closed. So the balance in there, Brett, would be the component that is still only off-prem. So -- and the reality is, is we'll move more and more to the on-prem as those -- as the states get to the point that they can loosen up those restrictions. But again, 521 on-prem, 18% still not either on-prem or off-prem. So the balance is really that off-prem business. -------------------------------------------------------------------------------- Brett Saul Levy, MKM Partners LLC, Research Division - Executive Director [44] -------------------------------------------------------------------------------- Right. What I was asking is just at the 521, would you reopened? Do you have any sense where the off-premise sales are for those units now versus where they were, well, say, the 2 weeks before they opened up the dining room? That's kind of what I was trying to ask. -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [45] -------------------------------------------------------------------------------- Yes. Sure. Absolutely. It goes back to the comments in my script. The good news is, is that with the on-prem, the off-prem business for the units that are -- that have moved to an on-prem have remained robust. They're still at 105%. So that 12% has nearly doubled even -- and has remained even though for the short -- again, it's a short period of time. Everything is moving here in real time. So that represents about 10 days and 2 weeks' worth of data, but we've been able to maintain that off-prem business with the same robust strength that we did as we moved through April. -------------------------------------------------------------------------------- Brett Saul Levy, MKM Partners LLC, Research Division - Executive Director [46] -------------------------------------------------------------------------------- Great. And with respect to franchisees, are you hearing any of your franchisees out there talking about maybe they need to step up closures, that's something that might have been down the road, but maybe they have to take a little bit more aggressive and -- aggressive stance. And also, if sales challenges persist, do you believe you have either the wherewithal or the need or the desire to offer additional franchisee relief? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [47] -------------------------------------------------------------------------------- So excellent question. With regard to the franchise closures, let's kind of step through that. I think it may be a little bit early in the cycle to understand that. I think the first focus was with regard to capturing liquidity and understanding what level of liquidity may be available in trying to assess how long this may last and when we were going to ramp back up. So with each passing day in a week, we get better insight to that. Would it surprise me if closure request went up? It wouldn't surprise me, but we're just not at a point right now. It would be conjecture on my part to really come put out a number of where that would be. As you might expect, we scenario plan every different version of what that might look like as we understand from a corporate perspective, what the financials may look like. But right now, I wouldn't say that we've had that big call nor would I be able to even hazard to guess what that might look like at this point in time. With regard to the availability of additional funding, our goal is -- we have worked through this with our franchisees to keep a strong, robust franchise system and to help our franchisees reopen would be in our best interest. But what we have committed to date is what we have said in the scripts, which was the deferral for week 11 and the abatements for weeks 12 and 13 with regard to royalty and the advertising brand building fund contribution. -------------------------------------------------------------------------------- Brett Saul Levy, MKM Partners LLC, Research Division - Executive Director [48] -------------------------------------------------------------------------------- Great. But there's nothing to preclude you other than possibly covenant-type restrictions? I see very much... -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [49] -------------------------------------------------------------------------------- Yes. So just quickly to that point, the covenant-type restriction is the direct loan to the franchisees. The amendment does put a cap within that. But outside of that, the restriction, we really don't have a restriction as long as we stay within all of our other covenants. -------------------------------------------------------------------------------- Operator [50] -------------------------------------------------------------------------------- And next we have a follow-up question from Nick Setyan from Wedbush Securities. -------------------------------------------------------------------------------- Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [51] -------------------------------------------------------------------------------- Robert, what's the G&A run right now? Is it -- whether it's on a per week or a per month basis? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [52] -------------------------------------------------------------------------------- Yes, Nick. So when we look at the G&A, is what we've said, and I see if I can figure out how to translate this. You've noticed that we -- virtually all travel has been shut off. We did have to, unfortunately, as I mentioned, we had furloughed people with regard to -- we have furloughed 25% of the home office staff, and that ended up becoming a more permanent. We parted ways with those individuals earlier in the week. I don't know in the moment if I have that run rate available, but we can probably -- I'll have Curt follow up with you on that one, Nick. -------------------------------------------------------------------------------- Nerses Setyan, Wedbush Securities Inc., Research Division - Senior VP of Equity Research & Senior Equity Analyst [53] -------------------------------------------------------------------------------- Yes. No problem. And then just one clarification. Of the 525 units that now have dine-in open, how many are company owned? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [54] -------------------------------------------------------------------------------- That's an excellent question, too. Yes, 521 open right now in 21 states. I don't -- again, that may have to be a current follow-up, too. It's not on my data sheet. I apologize for that, but we will certainly get that number to you. -------------------------------------------------------------------------------- Operator [55] -------------------------------------------------------------------------------- (Operator Instructions) And we'll go to James Rutherford from Stephens. -------------------------------------------------------------------------------- James Paul Rutherford, Stephens Inc., Research Division - Research Analyst [56] -------------------------------------------------------------------------------- I just had a quick 2-parter on the supply chain and what you're hearing on that front. The first part is on food availability, specifically around beef, if you had disruptions in your supply chain? The second part is just on the price increases around protein and how that might affect your franchisees' profitability picture in the near term? -------------------------------------------------------------------------------- Robert P. Verostek, Denny's Corporation - CFO & Senior VP [57] -------------------------------------------------------------------------------- James, good question. Yes. Thank you for that. With regard to the supply chain, as you might expect, every time I see one of those articles related to the processing plant, I would call up the head of our procurement, and he would tell me that we don't have issues that there are plenty of animals on the ground and that the processing disruption would not be long enough to work through the number of weeks on hand that we already had available to us. So with regard to the beef that you specifically mentioned, we certainly have weeks on hand with regard to that and believe that, that will get us through getting the processing plants reopened. With regard to commodity inflation, I -- again, we -- I think we're in a pretty good place. We are contracted with regard to many of our products. And so we don't -- we haven't quoted the exact commodity inflation this year. There are just a lot of disruptions. So beef and the ones that you mentioned, the beef and the pork have been highlighted, but there will be obviously, many other products that will be in abundance of, and we may be able to get a break on. With -- overall with regard to our supply chain, we've worked really quite well with our distributor, McLane. They have really been a valuable partner. As we have worked through this and as we have ramped back up our units, the 521 units that are open, we give them a heads up of what's coming online, and they've been able to get product there really in a timely fashion. So they've really stepped up. So with regard to a supply chain disruption, really haven't seen that in any regard. I think we're well covered with regard to our beef products. With our multiple weeks on hand and with commodity inflation, I think it's really kind of too soon to give a specific number of what that might look like. And just for everyone that's still on the call, so that Nick is not the only one that gets this piece of information. With regard to the 521 units that we have on-premise sales right now, 30 of those are company owned. So 30 out of the 521. So that's a piece of information that everyone on the line can have. -------------------------------------------------------------------------------- Operator [58] -------------------------------------------------------------------------------- And with no further questions in the queue, I'll turn it back to Curt Nichols for closing remarks. -------------------------------------------------------------------------------- Curtis L. Nichols, Denny's Corporation - VP of IR and Financial Planning & Analysis [59] -------------------------------------------------------------------------------- Thank you, Christie. I'd like to thank everyone for joining us on today's call. We look forward to our next earnings conference call in late July, in which we will discuss our second quarter 2020 results. Thank you, and have a great evening. -------------------------------------------------------------------------------- Operator [60] -------------------------------------------------------------------------------- And that does conclude our call for today. Thank you for your participation. You may now disconnect.