Robert Verostek: So we – right that the mass of it is, is that we actually layered in additional pricing with a November print. So, while we’re rolling off various pieces of that over the – as we move into Q1 the actual pricing effect in the quarter in Q3, Q4 2023 was more in the 7.5% range. So that that’s the number you should think about. And so the 1.3 would suggest about a six-point traffic decline.
Nick Setyan : About a six point three traffic decline?
Robert Verostek: Yeah, but about that again, it’s not perfectly – perfect math in that when you’re dealing with same-store sales. So but yes in that 6% range, Yes. I appreciate you giving me the opportunity to clarify those remarks.
Nick Setyan : No. It’s very helpful. Thank you. And then just on the G&A guidance it does sounds like you’re pretty much, assuming sort of a full pay out across the board. And so when it’s all said and done it seems like you know G&A may not be as high as the full year guidance implies. I mean, hopefully it is and everything, across the top-line and margins are great. But if not, it sounds like G&A is actually going to be a little bit lower. Is that a fair understanding of how you are guiding G&A.
Robert Verostek: Given the last four years Nick, it would represent 70%. But I liked your more bullish claim that we’re going to hit all of our guidance and actually pay out that level and everybody will be excited to do that. But yes, the $83 million to $86 million range does include 100% – 100% short term incentive compensation assumption.
Nick Setyan : Okay. And then on the franchise margin, can we just talk about sort of the trajectory on the franchise margin in ’24? And then just how many company owned Keke’s you guys are thinking of within that guidance in ’24?
Robert Verostek: Yeah, let me start with the second part first. I’ll give Curt a chance to help me out with the margin question on the franchise, but with regard to Keke’s openings, the 12% to 16%, I would tell you that in the current year in 2024 that those will likely be 40% to 50% company openings as we built the pipeline with additional Keke’s franchisee development in some great strength within the Denny’s franchise development related to the development agreements that we announced on the last call. Those 14 agreements for 100 additional cafe commitments. So in the current year as we build out our operational efficiency in places like, Tennessee, in Jacksonville, you will see us invest more into the company operated cafe.
So the 12 to 16 would likely be 40% to 50% of company cafe openings. With regard to the margin, what I’m being shown is that it will be very, very similar to 2023. So approximately 51% and the changes as you know in the remarks as we have this odd revenue recognition standard that impacted the prior year where we’re having to recognize the kitchen equipment that we were installing for franchisees as revenue with a complete contra offset into the extent which depressed margins by 4 to 5 – franchise margins by four to five percentage points. So what we don’t have that same type of impact within the 2023 results. So you shouldn’t see – you shouldn’t expect or anticipate another four to five percentage point growth. It’ll be very similar that low 50s percent range 50, 51 range so.
Nick Setyan : Got it. Okay. Thank you very much.
Robert Verostek: Thanks, Nick.
Operator: Thank you. Our next question comes from the line of Todd Brooks with Benchmark Company. Please proceed with your question.
Todd Brooks : Hey, good evening, everyone. Thanks for taking my questions. One follow-up to Jake’s question actually. How I think when you were answering value mix has picked up in January I know stable Q4 versus Q3. Can you share with us how much it has ticked up just maybe dimensionalize? Thanks.
Kelli Valade: Yeah, absolutely, Todd a couple points. We’ve seen it go up a couple points it’s a recent trend change. But again, we’re still seeing that Chuckles reiterate that and we’re still seeing, people coming in and ordering some of these great new products around innovation. So the value messaging we know is working to get them in the door. We will refresh that messaging this quarter and but it picked up a couple of points as of late. And again probably evidence to what most are saying about, how people are feeling. But for us again still confident in the strategy on barbell and that that is really working for us.
Todd Brooks : And if I think back historically, this is running the low to mid 20s beforehand. So we’re not back to maybe historical piece for where values mixed out.
Kelli Valade: I think that’s correct. Robert is nodding his head, as well.
Robert Verostek: Todd, when we – during the height of 2 4 6 8 launch it was in the 23%, 24%, 25% range. And as long as where the barbell strategy is effective, as Kelli is alluding to, we’re not afraid of driving that that value incidence rate.
Kelli Valade: And this is all – these are this not just the original Grand Slam and the one that we’re talking about as of late. Although that has been incredibly successful as we talked about. This is the other thing that are messaged in the restaurant that we would classify our everyday value slam or Super Slam. We kind of capture those all in that kind of value incidents bucket for us. The original Grand Slam is the one that has upticked as of late. Yeah.
Todd Brooks : Yeah, that’s helpful. Thanks. And then I wanted to get a little bit on KeKe’s. So at the end of Q3, you updated us on the 14 agreements, hundred units, and I think today’s commentary was 14 agrements, 100 plus units. Are we actively selling agreements now? Or we digesting the explosion that we had an agreements in Q3? I’m just curious I felt there was more momentum able to continue off the franchisee convention and the signings that you saw there. So maybe talk about that.
Kelli Valade: Yeah. Yeah, I think that’s fair, Todd, and, what we’re seeing is obviously there’s a lot of excitement about it and there’s also been a lot of and I think we’ve mentioned this and talked about it quite a bit. There’s a tremendous amount of excitement still and there’s momentum and there’s a lot of conversations about Nashville. It’s that new prototype. It’s the new design. It’s an all those things were in play and then we still have levers to pull in terms of just continuing to drive that momentum. But a lot of folks really excited a lot of things that are in play with the new menu cocktails, again successful, Tennessee opening we’re really encouraged by what we saw there. So there’s quite a few that are lined up as of right now is know.
The ones that we talked about and then we’ve literally had people waiting to come to that opening and said, hey, let’s get this thing opened. Let’s do a great job opening it. We got that ceremony. We did the ceremony and grand opening, ribbon cutting with everyone in the community that we could get, so that we could get this name out there and it’s been really successful. But we also have franchisees waiting to go there lining up to go there and be introduced via our development team. And those people are coming in as we speak. So we expect that momentum to continue. There’s really no point. Pause other than to say, hey, let’s get this thing out of Florida and see how it can perform for us. We do also have four cafes under construction and then, again these openings next year are pretty accelerated rate as Robert already talked about.
Todd Brooks : And are the four – are the 40% of growth that’s here that’s anticipated to be company stores. Are you seeing ceding other states for proof of concept or are you looking to get that kind of operational efficiency in the Tennessee Market as a corporate market and then go ahead, Robert. Sorry.
Robert Verostek: Yeah, so just so, Toddy, we’re really excited by what we’re seeing in Tennessee. We already have another corporate Cafe under construction in Tennessee, right now. We have another corporate cafe in Jacksonville under construction right now. And you will see us move into Texas heating Texas as the next corporate area for development. So, we’ll be in places other than Florida and Tennessee this year.
Todd Brooks : Okay great. And then just a couple to wrap up on Keke’s and I’ll get back in queue. Can you speak to since the program was successful can you speak to maybe alcohol incidents or lift and check that you saw in the test that we should think about for your views for the concept? And then the second one just with the new prototype opening in Tennessee, which looks great from the pictures I’ve seen online. Thoughts on is there, is there a point in order to the franchisees existing in Florida want to go back and rework their units in the new prototype? Or is this really a go forward type prototype for Keke’s? Thanks.
Kelli Valade: A lot in there Todd and really great question. So first to take the maybe the last thing that you mentioned in terms of going back in and Florida, there are a lot of franchisees really excited about, it’s a beautiful buildings, it’s a beautiful design, really leaned in to what Keke’s is known for and what’s special about it with an updated really bright fresh look. So I’m glad to get the feedback. Pictures don’t fully do a justice. It really is a stunning building. That franchisees will go back. There is conversations with a lot of them in Florida to go back and look at paint colors. Look at some of the things that they could pull forward. There’s really not been a comprehensive remodel program for the Keke’s brand up until now.
So they’re excited about the things that we can pull forward and having those conversations for sure. In terms of the alcohol programs really encouraged by what we’re seeing. It’s a really simplified approach with Mimosa, Sangria’s and 5% to 7% mix is really what we’re seeing their higher on the weekends. This is obviously expected, but really in line with what we thought that that would do for us. So it’s not been rolled out system-wide. In fact that Tennessee location did not yet open with it. It’s one of those things where we’re excited about the potential this has. This is a brand where it doesn’t have a honeymoon curve that like other brands, I’m used to it does have a honeymoon curve where it decreases it actually grows over time and we’re actually not talking about just yet because we know it’s got the potential and we’ve already seen it starting to grow.
And again, we didn’t open with the cocktails or the alcohol program. We didn’t open some of the other things that we know we can pull and that will help it to continue to grow for us. So we are excited about what that can do for the Keke’s system in terms of rolling that alcohol program, as well as even the remodels and what that could do for the Florida market.
Todd Brooks : Okay. Thanks Kelli.
Kelli Valade: You’re welcome.
Operator: Thank you. Our next question comes from the line of John Tower with Citi. Please proceed with your question.
John Tower : Great. Thanks for taking my questions. Maybe if we could start off on the unit closures and specifically I am just trying to maybe you can help us ring-fence. How many of the stores are potentially at risk, of closure? I think, Robert, you mentioned earlier that the profitability breakevens are close to $1.2 million now at Denny’s. I’m just curious, you know, if you could maybe give us some an idea of what percentage of the system might be at or near those levels? And maybe that’s what stopped to the moment.
