Denny’s leans into Mexican virtual brand

Denny’s Corporation will expand its Mexican-inspired virtual brand this year as part of a bid to capitalize on off-premise dining more. 

CEO Kelli Valade said Monday the parent company of Denny’s and Keke’s Breakfast Cafe will add Banda Burrito to more than 200 locations in California “over the next couple of months.” 

Almost 100 locations offered the virtual brand during the first quarter, according to a recently-published slideshow from Denny’s. 

The new Banda Burrito offerings “will be in California because we saw the unique opportunity to offer this in ways to offset the impact of AB 1228 and just provide this new option for guests and franchisees,” Valade said. “When we offered it to our franchisees in California, operators were quick to sign up, given the perfect timing and the fit of the Banda offerings.”

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Denny’s wants to bring Banda Burrito elsewhere in the U.S. after it finishes launching the virtual brand in California, according to Valade. That will likely begin in 2024’s final quarter.

Her remarks, which occurred during Oppenheimer’s Annual Consumer Growth and E-Commerce Conference, echoed ones she previously made in late April during the company’s first-quarter earnings call with analysts and investors.

The expansion strategy varies from the approach that some other companies have been taking when it comes to their own virtual brands.

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Brinker International, for example, has said it will “de-emphasize” its online-only brands. The company, which is known for the Chili’s and Maggiano’s Little Italy chains, pumped the brakes on Maggiano’s Italian Classics and put less focus on It’s Just Wings. For the latter, it also added the virtual only brand to the offerings at physical Chili’s locations.

Denny’s Corporation’s Banda Burrito represents the third virtual brand under Denny’s corporate umbrella after The Burger Den and The Meltdown. Both debuted about three years ago during the pandemic.

EMERYVILLE, CALIFORNIA – FEBRUARY 13: A sign is posted in front of a Denny’s restaurant on February 13, 2023 in Emeryville, California. Denny’s restaurant will report fourth quarter earnings today after the closing bell. (Photo by Justin Sullivan/Get (Justin Sullivan/Getty Images / Getty Images)

“Off-premise channels continue to be a strategic opportunity for us to grow new guests and transactions through our unique virtual brands and through Denny’s on demand,” Valade said in April, noting its particular popularity among Generation Z and Millennials.

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Denny’s reported there were over 1,500 total Denny’s locations as of late March.