Diversity Issues At Denny's

With the increased usage of social media, companies need to be very careful how they handle diversity issues. How a company reacts to diversity issues can make or break their business especially in certain areas of the world. Denny’s is not an exception to the issues that may occur with diversity. However, the way they reacted has had some issues along the way and they did not try to correct the overall problem effectively. Even though Denny’s tried to correct the problem each time they did not handle the underlying problem of a lack of diversity training in the company.
History
Denny’s started as Danny’s Donuts in 1953 and was opened by Harold Butler and Richard Jezak (Denny's, n.d.). The Donut stand changed into a restaurant chain that now

has over 1,700 locations (Denny's, n.d.). As a twenty-four-hour diner that is across the United States, you can expect to have a diverse customer base from all aspects of life. When you operate this type of diverse environment you need to ensure your employees are trained and efficient in diverse operations. Not only do the employees need to be from a diverse background they need to know how to provide customer service to one as well.
With a company that was founded in 1953, there has been a variety of changes pertaining to diversity in the workplace. Diversity is an issue every company needs to manage and facilitate in the modern world. With social media being a big part of a company’s marketing, they need to ensure they run a diverse and ethical business. While the corporate entity cannot be everywhere at once, training can help alleviate a public backlash from unethical events. Unfortunately. Racism exists in this world and cannot always be prevented, but how a company responds says a lot about the company.
Diversity Issues
While the company has probably had a problem with diversity and racism for a while the first years the major events took place was in 1993 and 1994. In 1993 a group of Secret Service Agents was forced to wait for service as their white colleagues were seated before them (Labaton, 1994). According to the Baltimore Sun, even after Denny’s lost a class action lawsuit in May of 1994 for racial profiling another incident happened again in December of the same year (Baltimore Sun, 1994). In 1994 African American customers were made to wait longer, denied service, and were made to pay more than white customers (Baltimore Sun, 1994). Denny’s lost a lawsuit totaling upwards of 54 million dollars and is required to report all civil rights complaints to an independent official. In December of 1994, a group of African Americans went to a Denny’s in Illinois and were treated in a similar way (Baltimore Sun, 1994). They were forced to wait over an hour while white customers were served, and had menus thrown at them by a waitress who was purposely trying to avoid serving them (Baltimore Sun, 1994).
Even though Denny’s had its issues in the 1990’s it did not stop even after the lawsuits. In 2013 a Denny’s in South Carolina refused to serve a group of African Americans because apparently a White customer felt threatened by the group (Eversly, 2013). The manager refused to serve the group and told them they had to leave. This is where the added effect of social media comes into play. The customers that were refused service took to social media and spread their story. Which resulted in the Manager being removed. Another incident happened as recently as this year. In Washington state, a group of African Americans were dining at Denny’s restaurant and faced yet another case of racism (Kekatos, 2017). The group of young men was asked to pay for their meal in advance because they had apparently had a group of people leave on their check (Kekatos, 2017). The person that posted this on social media was a White couple and stated that none of the White customers were required to pay in advance (Kekatos, 2017). These issues were not isolated in a certain state or region. This appears to be a serious problem within Denny’s organization.
Hiring the Right Man
In response to the issues, Advantica hired James Adamson in 1995 as their president and chief executive officer.

James was hired to clean up the company’s image (Londner, 2001). Known for turning around troubled companies, James is credited with helping the struggling Burger King franchise. Adamson stated at his first meeting with employees that he was, “going to do everything possible to provide better jobs for women and minorities. And I will fire you...If you discriminate…” As a result, eight of Denny’s top officers left (Rice, 1996). He required all 45,000 employees to undergo diversity training which included reading the Civil Rights Act (Londner, 2001). For employment consideration, prospective employees had to answer a timed series of questions regarding working with different races (Rice, 1996). Adamson also hired more minority vendors and suppliers. They buy their supplies from diverse companies whenever possible. Denny’s received the “Best of the Best Top Supplier Diversity Program” in 2013 from Professional Women’s Multicultural magazine (Denny's, n.d.). This is among many awards and recognitions Denny’s has received from diverse

groups.
The Right PR Team
In addition, Denny’s also hired a PR Team to help restore their reputation. Denny’s PR director, Karen Randall, and her staff started an 18-month PR blitz. This included spending $1.5 million on image advertising, nearly $1 million on a documentary, a book, and an event. She also sent the documentary chronicling Denny’s story to editors of minority publications and leaders of minority organizations (Londner, 2001). Denny’s has also produced racial tolerance advertisements and spent two million dollars on ads with the slogan “Diversity: It’s About Us.” (Collins, 2000). Randall and her team made all the right moves and their approach is seen as the model for others to follow during similar situations. (Nkomo, 2014).
Changing the Menu
Denny’s parent company, Flagstar Companies, signed a pact with NAACP pledging to be more diverse.

With the backing of Ron Perry, Adamson immediately expanded re-education efforts across all of Denny’s, El Pollo Loco, Quincy’s steak houses, and Hardee’s restaurants (Rice, 1996). James then puts initiatives in place that included diversity training, community involvement and increased the hiring of minorities. Adamson’s four-part strategy to put cultural diversity in place; loosen up the hierarchical environment; make diversity performance criteria; require entire staff to attend workshops; and never miss an opportunity to preach the gospel of diversity (Rice, 1996). He also hired Rachelle Hood Phillips, the first female officer of diversity to report directly to

him.
Continuing the Trend
Once Denny’s put measures in place they continued that trend for the long haul. First, they ran an advertising campaign after the 2009 Super Bowl. Nelson Marchioli, CEO of Denny’s, offered a free Grand Slam breakfast for the eight-hour event. In addition, in 2009, Denny’s gave $100,000 check to NAACP to celebrate their diversity dedication (Denny's, n.d.). The chain has continued the initiatives put in place and expanding upon them. These initiatives including; increasing the minority-owned franchises, employee diversity training, increased ethnic community involvement, and increased minority hiring. Over 37 percent of the franchises are minority owned (Collins, 2000). They also added consequences to their franchise’s performance appraisals to ensure diversity compliance. This could be a substantial financial loss to franchises. Jim Gray, the campaign consultant, stated that the key to Denny’s success was management’s commitment to change, and then to communicate that change (Londner, 2001).