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Pilot Selects Denny's as Full Service Operator of Choice

KNOXVILLE, Tenn. -- Pilot Travel Centers LLC, one of the nation's largest operators of travel centers catering to the professional driver and traveling motorist, selected Denny's Corp. as the full-service restaurant operator of choice for its 300-plus interstate properties in 41 states.

Pilot is in the process of merging with Flying J Travel Centers, subject to final approval by the Federal Trade Commission. Up to 140 Flying J travel centers across North America could have their full-service restaurants converted to Denny's.

Denny's said it expects to begin the Flying J conversions in the second quarter of this year and to have the majority of the conversions completed by year-end. On an annualized basis, the conversions are expected to add an estimated 7 percent to 8 percent to Denny's systemwide sales. Denny's franchisees will convert and operate most of the Flying J locations with the company planning to convert and operate approximately 15 of the restaurants. The capital outlay is expected to be approximately $525,000 per conversion. The parties expect existing employees will generally remain in place, according to Denny's.

Pilot and Denny's also have identified 50 existing and proposed Pilot Travel Centers as potential Denny's locations. These new travel centers and conversion opportunities will occur over the next several years as Pilot resumes its normal development pipeline.

"We are very excited to grow our partnership with Denny's restaurants. We believe the success of the concept is proven based on the results of the conversions already completed, and we look forward to rapidly expanding the conversions," Pilot CEO Jimmy Haslam said in a statement. "By aligning our brands, our mutual focus on quality and our commitment to satisfying customers, we believe this will result in a great opportunity to better service the traveling public. We look forward to building on this relationship with Denny's and their leadership team."

Nelson Marchioli, CEO of Denny's, added: "Based on the success of our seven existing Pilot locations and four Flying J conversions, we expect this agreement will truly add long-term value for the company, its shareholders and franchisees. We value the relationship we have developed with Pilot, and we have demonstrated that Denny's enhances the experience for Pilot's existing customers. The combination of our two brands is a natural fit and the performance of our initial locations has exceeded expectations. Developing restaurants along our nation's highways has always been an important part of Denny's heritage, and this relationship represents the culmination of many years of work."

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