Denny's Is Suddenly Cool Again

The diner chain is now on track to achieve its best annual same-store sales increase in eight years.

Denny's turnaround is a bright spot in the fast food industry, which has been plagued by declining traffic over the last several years.

Here's what Denny's has been doing to win back customers.

1. The company has been remodeling restaurants to support a rebranding campaign. In the first three quarters of the year, Denny's had completed 129 remodels, Denny's President and CEO John Miller said in a call with analysts Monday. Within the next four years, 70% of the Denny's 1,289 restaurants will be updated.

"The remodels have boosted same-store sales and traffic, resulting in mid-single-digit gains, despite the challenging economic environment," Miller said in a third-quarter earnings call with analysts.

2. Denny's has simplified its menu and added healthier options.

"We rolled out a new core menu which included two premium sandwich entrees with new high quality 7-grain bread in addition to over 20 other menu changes for simplification and for margin improvement," Miller said.

3. The company is rolling out a millennial-focused fast casual concept on college campuses called The Den.

The Den's menu, which is smaller than Denny's traditional menu, offers breakfast all day, gourmet burgers, burritos, sandwiches and salads.

The company now has seven Den locations and four set to open soon.

4. McDonald's prices have been increasing, which may be benefiting Denny's, IHOP and other rivals that have historically been more expensive than McDonald's.

That's too costly for customers like 58-year-old Mark Hiner, who told Patton he no longer takes his grandsons to McDonald's, instead visiting rivals like IHOP, Denny's, and Chili's.

"Those meals are the same price," Hiner told Patton. "And they're better."