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Denny's free breakfast grand slam

As promised in its Super Bowl ad, the chain served breakfast on the house to get its message across.

By Beth Kowitt, reporter
Last Updated: February 4, 2009: 11:08 AM ET

AVENEL, N.J. (Fortune) -- There are a lot of unhappy lines in this recession, but this wasn't one of them. The people that snaked around Denny's restaurant in Avenel, N.J., may have been cold and wet, but no one was complaining as they stood in the snow, waiting for the restaurant chain to disprove the old myth that there's no such thing as a free lunch (or in this case, breakfast).

"A free meal in an economy like this? Heck yeah," said Joe Barrera, who waited in line with his wife Tuesday to take Denny's up on its offer of an on-the-house Grand Slam breakfast. The two go to Denny's a couple of times a year, but that may change. "I'd give them my loyalty if they did this every once in a while," he said.

By the time the couple got in line at 9:15 a.m., manager Sam Kaul estimated that almost 300 people already had been served. Normally he would have seen between 25 and 30 customers at that point in the morning. The phone hadn't stopped ringing, and he personally had answered more than 100 calls.

"Free freaks people out," Kaul said as he shuffled in customers who had to wait about 20 minutes for a seat. "They call and say, 'What's the catch?'"

It pays to advertise

Most of the crowd first got wind of the free Denny's Grand Slam - two pancakes, two eggs made to order, two sausage links, and two strips of bacon - during a 30-second Super Bowl ad on Sunday night. The restaurant company promised give out the breakfast meal today between 6 a.m. and 2 p.m. at Denny's restaurants across the country.

The ad, which was the company's first Super Bowl spot, was a way for the South Carolina-based chain to market itself as a restaurant that's affordable and especially relevant during hard times.

"The economy's tough and people are jumping all the way to fast food to try to figure it out. We all use fast food, whether it's for time or convenience or for money," said Denny's CEO Nelson Marchioli. "But you can go to Denny's and you don't have to give up a real breakfast and that was the whole focus of our commercial."

Companies like McDonald's (MCD, Fortune 500) have done well during this economic climate as the recession pushes people toward less expensive dining options. Marchioli wants to get in on the action and says Denny's $4 Weekday Express Slam, a streamlined version of the Grand Slam, is comparable in price to what you would pay for breakfast at a fast food restaurant.

"I want to take back share," said Marchioli, who planned to help serve in some South Carolina locations. "For too long, we have allowed others to take share, whether it was Starbucks or McDonald's. They're fine competitors and I don't expect to take all their business from them, but I'd like a little bit back."

Hard to pass up

Denny's, which has 1,541 restaurants, predicts it will likely have served about 1,400 people per location the day of the promotion, more than five times the normal volume. Nationwide, the company expected about 1.5 million visitors between 6 a.m. and 2 p.m., but it may have seen more than 2 million.

"Free is hard to turn down," says Marchioli. If people couldn't get in because of long lines, management had planned to give them a coupon for a free Grand Slam, which normally costs $5.99.

Customers might think that Denny's is spending a fortune on them, but the biggest expense of all will likely be the Super Bowl spot. Thirty-second ads reportedly sold for up to $3 million. Because the cost of breakfast food is relatively low, said Marchioli, he thinks this could be a break-even opportunity for the company if just some people buy a beverage like a $1.85 coffee or $1.99 juice.

But what's more important, according to Marchioli, is that visitors are reminded that the restaurant is a place for good food and good value - and that they'll come back and spend some money. To top of page


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