Denny's Corp. and its franchisor DFO LLC are being sued by RWDT Foods Inc., co-owned by former NFL player Donnell Thompson, over breach of contract.
Thompson, president of RWDT Foods, in the lawsuit filed in the Ninth Judicial Circuit of Charleston County, S.C., alleged the Spartanburg, S.C. family-dining brand breached its franchise contract in a case involving pre-opening training infractions. RWDT owns two Denny’s franchised units: one in Fayetteville, N.C., and another in North Charleston, S.C.
A Denny’s spokesperson Friday said the company was aware of the lawsuit.
“To date, we have made every effort to work with Mr. Thompson, and it is unfortunate that he has elected to proceed this way,” the spokesperson said in a statement. “We look forward to resolving this matter. Per company policy, Denny’s cannot comment any further on active litigation.”
RWDT requested an emergency hearing to provide a temporary restraining order so the company could continue to run its business.
In a press release, Atlanta-based attorney James L. Walker Jr., lead counsel in the case with Clarence Davis of South Carolina, said: “Denny’s has a long history of misconduct and countless corporate lawsuits. Our clients are just not tolerating it anymore after years of trying to comply with countless unreasonable demands.”
The case alleges the plaintiffs were notified in October 2021 of an alleged infraction of training required by the franchisor prior to the franchise’s opening in 2012.
Thompson, in a statement, said he and his franchise company had met with Denny’s corporate representatives.
“I have met with Denny’s board chairwoman, Brenda Lauderback, and I am very disappointed that we had to ultimate sue them,” Thompson said. “They are not only ruining our financial standing, but they are jeopardizing our business credibility and reputation.”
RWDT, Thompson’s partnership with fellow retired NFL player Ron Wooten, has more than 30 restaurants in its portfolio, the company said. Thompson was a defensive end with the Indianapolis Colts from 1981 to 1991.
“RWDT has never had any infractions in their very successful history in the business and has brought a great deal of income to the Denny’s chain,” the plaintiff’s statement said.
Walker added: “Our client, Donnell Thompson, is an African-American, who was required to jump through hoops and hurdles unlike other franchise owners.”
In June, Denny’s announced its commitment to the Pathways to Black Franchise Ownership program, created by the Multicultural Foodservice & Hospitality Alliance. Denny’s pledged to help the MFHA reach its goal of creating 100 Black-owned franchises by 2023
For the second quarter ended June 29, Denny’s swung to a profit of $23 million, or 37 cents a share, from a loss of $828,000, or one cent a share, in the same period last year. Revenues increased 8.3% to $115 million from $106.2 million in the same quarter last year.
As of June 29, Denny's had 1,631 franchised, licensed and company restaurants around the world including 154 restaurants outside the United States.
Denny’s completed its $82.5 million acquisition of the 52-unit Orlando, Fla.-based Keke’s Breakfast Café, an A.M. eatery brand, in July.
Contact Ron Ruggless at [email protected]
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