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Denny's CEOs Commitment – Denny’s President and CEO Nelson Marchioli is one of the driving forces behind the Company’s diversity success at Denny’s. He holds his direct reports accountable for results in this area. For example, he instituted a Senior Leadership Supplier Diversity Committee two years ago to re-energize Denny’s supplier diversity program. He tied 5% of each senior leader’s annual bonus to supplier diversity goals. He likewise tasked the heads of Purchasing, Quality Assurance and Product Development. The Supplier Committee meets every month to assess progress and work through issues. The results have been quite positive, producing a 15% increase last year, arresting a five-year decline. Today the Company is on track to double our 2005 results in 2006! Management of Diverse Workforce – Denny’s has won awards for its highly diverse workforce. Some initiatives the Company has pursued include: cultivating relationships with Historically Black Colleges & Universities and HACU (Hispanic Association of Colleges & Universities) for recruitment opportunities; using diverse executive recruitment and staffing firms that are minority or women-owned; employing Employee Opinion Surveys to learn how we can make Denny’s a better place to work for employees; creating an Employee Disaster Relief Fund to help employees and their families hit by disasters (contributes to our “cared for, cared about” culture); establishing a Women’s Leadership Network to support senior women in the organization; instituting one-on-one mentoring between senior managers and board directors; teaching English to 4,000 Hispanic crew employees who have limited or no English skills, increasing their productivity, morale and chances for promotion. Supplier Diversity – Denny’s instituted its supplier diversity program in 1995. It is run by the Manager of Supplier Diversity, who reports directly to the Chief Diversity Officer. This executive serves on local, regional and national supplier diversity boards to help Denny’s keep abreast of best practices in the industry as well as “give back.” Every major function at Denny’s is assigned an annual supplier diversity goal. The head of each function and CEO are given quarterly updates on how the function is progressing toward goal achievement. Denny’s Manager of Supplier Diversity pro-actively sources potential suppliers for the company (via conferences, conventions, ad placements, etc.) as does each purchaser and the head of Product Development. If a function fails to meet its goal, the senior leader (direct report to CEO) loses 5% of his/her annual bonus. Denny’s also actively “marries” minority suppliers with existing majority suppliers in its 2nd Tier Program, which broadens the opportunity for minority suppliers to supply the Company further down the supply chain. How success is measured In 1995, Denny’s created a Diversity Affairs Department, which is run by a Chief Diversity Officer (CDO), who reports directly to the president and CEO. The CDO sits on Denny’s Management Committee and is responsible for ensuring Denny’s is diverse and inclusive. The CDO keeps the senior leadership team and board of directors apprised of the company’s diversity progress on a regular basis, continually monitoring and measuring the results of key initiatives and programs. Below are some of the key outcomes of the Company’s efforts: - 56% of Denny’s Board of Directors are women and people of color; 33% minority - 50% of Denny’s senior management team are women and people of color; 29% is minority - 32% of Denny’s overall management is minority; 49% women - 51% of Denny’s overall workforce is minority; 54% women - 43% of Denny’s franchised restaurants are minority-owned (Denny’s system is 66% franchised.) Prior to 1994, Denny’s had no women or minorities on its board or in senior management; no women or minority suppliers; only one minority-owned franchise; and it is estimated that only 12% of its overall management was minority since the Company did not regularly track workforce statistics prior to 1995. In addition to regularly tracking our numerical progress in the above-mentioned areas of operation, Denny’s also tracks customer perceptions and attitudes toward the brand within the General Market and among African-Americans and Hispanic-Americans. African-Americans are, by far, Denny's toughest customer because of the Company’s history. Denny’s has made significant progress in restoring its name and reputation, especially among African-Americans. For example, in 1997, only 48% of African-American users felt welcomed at Denny’s. Today that number is 79%. In 1997, only 48% felt respected at Denny’s. Today that number is 72%. Only 59% would recommend Denny’s to a family member or friend in 1997. Today that number is 79%. Finally, nearly half of all African-Americans in the nation linked Denny’s name to discrimination in 1996 – a clear barrier to visitation. Today, only 10% make that association. Because of our history, some people and many in the media (who have great influence over the public) have been reluctant to recognize our leadership in the diversity arena. Denny’s has come to accept the fact that it “lives in a glass house” and comes under greater scrutiny than other companies. It resolved years ago to remain committed to doing the right things in this area … even if no one notices. This year the following magazines bestowed honors on Denny’s for its diversity record: Black Enterprise, Family Digest, Essence, Hispanic Business and Asian Enterprise. The Company realizes it still has a ways to go to convince others that it is a transformed company. Denny's Diversity Facts It is our strong belief that America’s diversity is one of our greatest assets in a global economy. At Denny’s, we continue to find diversity to be a rich source of ideas, creativity and innovation. We have diversity initiatives in many different areas of the company’s operations. Board of Directors: The board of Denny’s Corporation consists of nine directors of whom 56% percent are women and people of color. Members of the board include Debra Smithart-Oglesby, Chair, President of O/S Partners; Vera King Farris, President Emerita and Distinguished Professor of The Richard Stockton College of New Jersey, Professor of The University of Pennsylvania; Vada Hill, Former Senior Vice President and Chief Marketing Officer, Federal National Mortgage Association (“ Fannie Mae”); Brenda J. Lauderback, Retired President of Wholesale and Retail Group of Nine West Group, Inc.; Nelson J. Marchioli, Chief Executive Officer and President of Denny’s Corporation; Robert E. Marks, President, Marks Ventures, LLC; Michael Montelongo, Senior Vice President, Strategic Marketing of Sodexho, Inc.; Henry J. Nasella, Founding Partner, LNK Partners; and Donald R. Shepherd, Retired; Former Chairman, Loomis, Sayles & Company, L.P. People Teams: Senior Management Committee: The Denny’s senior leadership team consists of 8 persons of whom 63 percent are women and people of color. Overall Management: Minority employees represent 32% of Denny’s overall management. African-Americans, Hispanic-Americans and Asian-Pacific Americans account for 10 percent, 15 percent and 7 percent, respectively of Denny’s management. Overall Workforce: Fifty-one percent of Denny’s more than 25,000 company employees are minorities; 15 percent are African-Americans and 31 percent are Hispanic-American. Purchasing: Between 1995 and 2006, Denny’s contracted nearly $1 billion for goods and services with minority businesses, averaging $100 million per year. Denny’s purchasing with minority suppliers has grown significantly; there were no minority supplier contracts prior to 1993. Our business with minority suppliers ranges annually from 12% to 18% of total purchasing contracts. African-American firms account for 48% of this business Franchising: Currently, 123 minority franchisees collectively own 437 Denny’s restaurants, representing 43 percent of all Denny’s franchise restaurants. African-Americans own 24 Denny’s restaurants. Hispanic-Americans own 58, Asian-Pacific Americans own 63, and Asian-Indians own 291 restaurants. We also have one Native-American owned Denny’s restaurant. In 1993, there was one African-American franchise restaurant in the Denny’s system. Philanthropic Contributions: Denny’s contributed nearly $4 million from 2001 through 2004 to support the cause of civil and human rights. The National Civil Rights Museum was the first-year recipient, receiving over $1.2 million in 2002 to complete an expansion project. The King Center received over $1.3 million in 2003 to fund a national community service initiative offering over 40,000 community service opportunities to Americans nationwide. In 2004, Denny’s, in partnership with The King Center, funded the creation and dissemination of a nonviolence, youth service learning curriculum to be distributed to over 300 youth organizations nationwide. In 2005 and 2006 Denny’s partnered with the National Urban League to raise $1 million for its educational and after school program. Denny’s was the largest corporate sponsor of Save the Children (STC) from 1995 to 2001, contributing nearly $7 million to support STC initiatives on behalf of disadvantaged U.S. children; over three-quarters of them are minorities. Diversity Training & Education: It is estimated that Denny’s has trained over a million people in its award-winning diversity training course since its inception in 1995. Today, all 70,000 Denny’s company and franchise employees, management and non-management, have completed diversity training. All Denny’s managers are required to participate in a full-day diversity training session. Diversity Awards & Recognition: ◊ Black Enterprise magazine ranked Denny’s at the top of its list of “Best 40 Companies for Diversity” in July 2006. ◊ “We Share the Dream Award” presented to Rachelle Hood, Denny’s Chief Diversity Officer, at the 18th Annual Dr. Martin Luther King, Jr. Awards Dinner in Anne Arundel County, Md. on January 13, 2006. ◊ Hispanic Business Magazine ranked Denny’s among the “Top 50 Companies for Diversity” in 2006 and #11 in its survey of “Top 40 Companies for Hispanics” in 2005. ◊ Family Digest magazine selected Denny’s from over 700 U.S. companies as one of the Top 7 in the nation for African-Americans in 2004, 2005 and 2006. ◊ Essence magazine ranked Denny’s as one of “The Best Companies for Black Women” in 2004. ◊ Fortune magazine continually ranks Denny’s at the top of its survey of “America’s 50 Best Companies for Minorities.” Denny’s ranked No. 2 in 1998; No. 6 in 1999; No. 1 in 2000 and 2001 and No. 3 in 2002 and 2003. The survey is conducted among 1,200 U.S. companies. ◊ The National Association for Female Executives ranked Denny’s 13th in its 2002 survey of the “Top 25 U.S. Companies for Executive Women.” ◊ Asian Enterprise magazine ranked Denny’s as one of the “Top 10 Best Companies for Asian-Americans” every year since 1999. ◊ Latina Style magazine named Denny’s to its Latina Style 50 report, citing the company as one of the 50 best companies in the U.S. for Hispanic women to work. ◊ The Center for Responsibility in Business awarded Denny’s its 2000 Corporate Conscience Diversity Award for outstanding achievement in corporate social responsibility. ◊ Denny’s received the 1997 Fair Share Corporate Award for Minority Business Development from the National Association for the Advancement of Colored People (NAACP) in 1997. References: “The Denny’s Story: How a Company in Crisis Resurrected its Good Name” by Jim Adamson (© 2000, Published by John Wiley & Sons) chronicles the racial discrimination lawsuits that besieged Denny’s in the early ‘90s and what it took to turn Denny’s around. Denny's Hispanic Initiatives Commitment to Education For nearly a decade, Denny’s has been supporting the educational goals of Hispanic students through various scholarship programs and in partnerships with the Hispanic College Fund (HCF) and the Hispanic Heritage Awards (HHA). Sed de Saber, English as a Second Language Over the next three years, Denny's will roll out its English as a Second Language Program, Sed de Saber (“Thirst for Knowledge”) to its 4,000 Hispanic crew employees who desire to learn English. Sed de Saber uses the LeapFrog Quantum Pad® learning system, which allows employees to learn English at their own pace in the comfort and privacy of their own homes. Each employee will be given six months to complete the program. Partnerships with National Hispanic Associations Denny’s has partnered with the Hispanic Association on Corporate Responsibility (HACR), which provides Hispanic Americans with greater employment and business opportunities throughout the company. In addition, the company has supported the Cuban American National Council, Inc., National Association of Hispanic Publications, National Council of La Raza, American G.I. Forum, U.S. Hispanic Chamber of Commerce, and the National Puerto Rican Coalition. Employment/Board Hispanic-Americans represent 16 percent of Denny’s management. In addition, 32 percent of the company’s nearly 30,000 employees are Hispanic-American. Fortune magazine has ranked Denny’s among the top 10 corporate leaders in diversity in its survey of “America’s 50 Best Companies for Minorities” every year since the inception of the annual ranking in 1998. Denny’s has one Hispanic director on its 9 member board. Franchising/Procurement Hispanic-Americans are Denny’s franchise owners and currently operate a total of 60 restaurants. Hispanic-American suppliers provided $10.9 million in goods and services to Denny’s restaurants in 2005. Advertising Denny’s and its Hispanic advertising agency launched the chain’s first Spanish-language advertising campaign in 1996. Each year, Denny’s continues to develop advertising and community relations programs, specifically targeted to U.S. Hispanics. Denny’s Menu A Spanish translation of the Denny’s menu is available at restaurants in select markets that have a strong Hispanic customer base including California, Florida and Texas.
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