- Sam Gould
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When Your Business Is Hurting, Give It Away for Free
Denny’s, the one-time king of value restaurants, recently tried to regain some of its lost glory by offering a free Grand Slam breakfast to everyone who showed up during limited morning/early afternoon hours. The $5.99 Grand Slam breakfast includes two eggs, two bacon strips, two sausages and two pancakes.
More than 2,000,000 people took advantage of the offer. Denny’s promotion, which cost about $5 million in food, labor and Super Bowl advertising, received $50 million in free publicity. The move wasn’t entirely altruistic, though. Sales at Denny’s franchise restaurants open for more than one year had fallen 7.2 percent at a time when the chain thought its business should be better.
Generous giveaways also are happening in commercial real estate. Our property and facility management affiliate, Alter Asset Management, recently renewed its lease of its own office space at Oak Creek Center in Lombard, IL, with the building’s owner, SMII Oak Creek. The lease incorporates significant financial incentives, including a rent reduction, a five-month gross rent abatement, and a generous TI allowance to modernize and enhance the space. The office will receive new carpeting; repainted walls; an updated conference room and reception area; and some new furniture. Alter Asset Management is getting a terrific deal out of this lease renewal – and they aren’t spending a single cent on the renovations.
That’s one effective tenant-retention program, particularly in this recessionary economy. It’s clearly a tenants’ market, and building owners are eager to make concessions to keep the rent money flowing.