Eric Gonzalez: That’s helpful. And then just on the off-premise, you said it’s 21% of sales. I mean, arguably, it’s held up fairly nicely since the stores have reopened and just wondering why you think these channels have held up better at Denny’s and the industry? And then looking ahead, do you think this channel — particularly, delivery is more or less vulnerable to a pullback in spending?
Kelli Valade: Yes, I think that’s a great question. This is Kelli. I think why it’s held up for us, I think we — the guests that are using us in that daypart. So, I think we are uniquely positioned by the way to continue to grow this. I think as others start to think about why it does not make sense or if it hasn’t been as sticky, you can see, and you’ve already mentioned and has been for us. I think we were early in. We were really smart about the acceleration of both of the virtual brands, and our technology has really helped us to not only get there early, but stay there and sustain that. And so given that we uniquely have that capacity at late night, where others may just say, it’s not necessarily worth it for the long-term, we’re seeing others get out of the market.
I think it’s still an area of opportunity going forward. So, we know it’s incremental. We’ve said that. We love our two virtual brands. It’s younger guests coming in, so we know, again, it’s a different guest using it in that late night occasion. So, it just positions us given who we are as a brand to continue to focus on it and continue to watch it grow hopefully.
Eric Gonzalez: And then just the last one for me. Directionally speaking, from a franchisee profitability perspective, as you think about your guidance of 3% to 6% comps in the where you see commodity inflation, labor inflation, do you see this as a year where restaurant margins or franchisee margins expand materially? Do they stay relatively flat? Or do you — what can you tell us about how much you think that they could either expand or contract this year?
Robert Verostek: Yes, Eric, another excellent question. So, a couple of things to try to parse apart that question. First off, in our 3% to 6% guidance range, we would put the franchisees closer to the top end of that range and the company closer to the bottom end of that range. One of the — clearly, one of the differentials would be 24/7. So, — but again, that’s how we would kind of speak to that range of where the company portfolio and the franchise portfolio sit. I will also tell you that we are keenly focused upon franchise profitability and franchise margins. In fact, kind of the internal talking point around here would be this concept of no stone unturned. In this post-pandemic world, we’re really focused upon ensuring that our franchisees are profitable.
And we do see that with this, the inflationary pressures is somewhat subsiding. Still from a historic perspective, somewhat elevated. But compared to what we’ve seen over the last 12 to 24 months, that 4% to 6% commodity and 5%inflation is on the lower side. We do believe that we will make headwind with their profitability and their margins as we move throughout the year.
Eric Gonzalez: Great. Thanks.
Robert Verostek: Thank you.
Operator: Thank you. Our next question is from Jake Bartlett with Truist Securities. Please proceed with your question.
Jake Bartlett: Great. thanks for taking the question. My first is just the trajectory of sales, I understand that lapping Omicron is going to be a benefit. But I’m wondering whether you can — you say that maybe it’s comparing versus pre-COVID or whatever way you want to kind of frame it, but are you seeing your sales momentum increase here? We’ve heard some pretty good things just from industry-wide sales. I know Omicron is driving the year-over-year, but it seems like things are improving versus 2019 as well and I’m just wondering whether you’re seeing that same trend?
Robert Verostek: Yes, Jake, again, good to hear you. I would tell you that with the year started off, pretty strongly, right? We do have that Omicron rollover effect. We still are continuing to build back with the 24/7 units. So, December to January was clearly a build period for us. The quarter will be a very strong quarter for us, as I mentioned, to Nick’s question. I would tell you that we are going to lean hard on value. We are on — back on air with regard to value. When we were on air last year with value, we clearly could see that it was working. So that, again, is a strong point for us. We will leverage that. So, in this terms of what this environment holds, in this recession, not recession, we believe that we are a trade down play. We believe that we are also a value play that we are known for value. So, those two things are really kind of dovetailing nicely together.
Jake Bartlett: Got it. Maybe just digging into that last comment a little bit more. I’m wondering what you can say about just the behavior of the consumer so far? I know you’re leading into value, is that really necessary right now because the consumer is kind of demanding it? So one question is just on the lower end consumer, how are they behaving right now? Are they — is value kind of the only thing that gets them in the door or maybe are they being stronger than that? And then are you experiencing trade down from other higher-end demographics you at this point?
Kelli Valade: Yes. I think — hi Jake, this is Kelli. I think there have been — there’s certainly a lot of conversation about the potential for trade down. I think we are, again, well-positioned that if there is a trade down coming from other segments to family dining, we benefit from that. I think to your question, the consumer — so because we’re still seeing the check hold, I think your question about is the consumer only coming in for that? We’ve got –we’re on air. So, given our weight right now and given what we’re doing, we’re seeing movement. But we — and we are seeing the incidence where the mix go up a little to a place where we feel really good about. But we’re also — given that the checks holding, we’re still seeing people off order and excited about the more premium LTO and core offerings.
So, that gives us encouragement about the health of our barbell strategy and the fact that we’ve got both — we’ve got that mix all year long. You’ll see us — we’ll have new innovation, we’ll have LTOs that usually work very strongly for us, and then we will continue to enhance our All Day Diner deal. So, people do know that need it, do know that they can count on us for the great value.
Jake Bartlett: Great. And then last question. On the new menu that you’re rolling out and the dinner menu that’s enabled by the new ovens, I believe that you’ve been testing that. Anything you can share in terms of how it’s been testing how much of a sales driver do you think that new menu can be?
Kelli Valade: Yes. So, what I can tell you is, I mean, in the test markets, in the test restaurants, really well received by operators, craveability, all things that we want to see and look forward. I’ll hesitate to kind of talk about what we expect to see from that, just for kind of obvious reasons that you will start seeing it soon. But these are items we can only offer because of kind of launching and finishing the launch of the kitchens. There’s ease of execution that comes with it. But yes, just the opportunity to have some exciting and really craveable items that you couldn’t have before at Denny’s. So, we’ll have to probably just kind of leave it at that for now and really excited to — we do think it will drive trialability and that these are really craveable exciting items for us.
