Robert Verostek: Thanks Nick.
Operator: Thank you. Next question comes from the line of Todd Brooks with Benchmark Company. Please go ahead.
Todd Brooks: Hey, thanks for taking my questions. First question, and Robert, if I heard you right, you’re looking for kind of a 100 basis points step down in pricing in Q4, but you talked about, and Kelli, you were pointing out that there’s some menu construction and less customization. I’m just wondering if the mix impact that was only the 20 basis points in Q3, are you expecting a higher mix impact one way or the other with the new menu launch in early November?
Kelli Valade: Yeah. That’s a fair question. So we’re optimistic and obviously we went into this. We had some external support in addition to the research we’ve been doing and doubling down with RMS and even had this design done externally just for a fresh set of eyes. And the parameters were really highlight our incredible equities, highlight capability, highlight the things that our guests always want from us. We do not expect at all that the customization should have an impact. We’ve actually just kind of deemphasized it, because so much of our menu had the ability to be customized, so we’ll always customize when asked. We’re just kind of downplaying it a hair for the — in the interest of improving, and lessening the complexity.
So improving operations and lessening the complexity where we really don’t get credit for it. So those are some of the things. I think the check, one of the things that we went into this with was really looking at where are the best items for not only what the guest is craving, but then also from a margin standpoint, so that went into the design, the layout, front to back and everything that we did had that in mind as well. So while difficult to tell yet, we don’t expect it to have a negative impact at all. And in fact we hope there’s a bit of upside to what we’re doing and how we’ve looked at this menu.
Robert Verostek: Yeah. But to confirm, Todd, you are correct in the sequential just from the pricing aspect, the sequential one point decline that we will likely see in the Q4.
Kelli Valade: Yeah.
Todd Brooks: Okay. Great. And then, second question, just a quick one, but didn’t hear any update on loyalty. I know you launched that in June. Momentum as far as new membership and any kind of ability through the new platform to maybe stimulate some more frequency of visit yet, given the traffic challenges that are out there?
Kelli Valade: Sure. Yeah. It’s a great question. It’s still early. We continue to gain more members. We continue to leverage our learnings with both our customer data platform and the loyalty program itself, and really look to strengthen that over the coming months. A lot of what we’re doing is just really leaning into learn what we can about our guests and then to really create those journeys and those lanes speaking to them specifically with things that we know they love. So lots of ideas and things that you’ll see as leverage over the next quarter and to come. Long-term play for sure, in terms of having a great rewards program, a great loyalty program that really speaks to our guests and gives them what they want. But yeah, it’s slowly growing. And we continue to learn more all the time about our guests and what they want from us and a lot more that you’ll see coming from us on that soon.
Todd Brooks: That’s great. And the final one from me. Obviously exciting news about the agreements for a hundred units for Keke’s, kind of an amazing start. I guess, demand relative to your expectation. And if you look at your franchise support infrastructure that you’ve built, do you need to kind of manage the amount of agreements that come across the transom here? Or how are you feeling about the readiness if the demand is, and it seems that it is robust with existing Denny’s franchisees? Thanks.
Kelli Valade: Yeah. Great question. So always a balancing act. They’re spread out enough so that we really do feel like we can handle it. And we’re investing where we need to. We’ve invested in this brand this year to put the right Keke’s development team in place. We’ve invested leveraging our development resources to get to that 14. So managing expectations. I’d say at this point we’ve exceeded our expectations in terms of signing the 14 that we’ve signed. And it’s been a steady and really progressive thing that we’ve been able to do with excitement again from both Keke’s franchisees, new franchisees, and Denny’s franchisees as we’ve mentioned. So, yeah, infrastructure’s got to be there. This is the small, but mighty brands and we’re going to be really smart about how we continue to invest in and continue to support them leveraging our great franchisor model to do that.
And then Robert, you want to talk about the loan pool and ways to continue to incentivize those franchisees.
Robert Verostek: Yeah. Thanks Kelli. So Todd, this is kind of a little bit of an add-on here. I don’t think we’ve talked about this. I just signed this within the last week or so. But we do now have a hundred million dollars loan pool, that we put into place for a couple of different purposes. The first being $25 million for Denny’s remodels. We can talk a little bit more about that. But then we have $75 million for additional development, $25 million earmarked for Denny’s development and $50 million earmarked for additional Keke’s development. So we talk about agreements that we talked and that’s really, really exciting. It’s just the first tranche of agreements. By the way, this doesn’t get us to — we will certainly have additional ones that we will be talking about at some point in the future.
But beyond the agreements, now we have the capacity to help get this done. This is a new brand. And so again, we need — once as we get outside of Florida, we’re kind of putting our money where our mouth is with this loan pool that we’ve just signed, small backstop on the new development pieces. And often our loan pools are not utilized all that much other than for a stocking horse for other loans that they can go and get with their existing bank facilities. But we’re really excited to not only have the agreements, but the capital in place to fulfill those agreements.
Todd Brooks: Thanks. And just a quick follow-up. So you talk about 100 units being the first tranche. And Kelli, you mentioned spreading it out. So are we managing the demand in waves of bringing it on with new agreements here? So is there a backlog behind the hundred sign that you’re getting that visibility into this brand potentially growing into a strong number two over time relative to like a first watch?
