Denny’s is looking to expand the footprint of Keke’s Breakfast Cafe beyond its Florida home base after signing 14 franchise agreements to open at least 100 locations nationwide over the next five years.

New locations of Keke’s Breakfast Cafe are in the works along the East Coast and also in Tennessee, Texas and California, as the Spartanburg, South Carolina-based operator of more than 1,600 full-service restaurants looks to capitalize on continued strong nationwide dining sales in an otherwise challenging economy.

Denny’s acquired Keke’s last year for $82.5 million and now has agreements in place with franchisees, several of them current Keke’s and Denny’s operators, to boost Keke’s brand beyond its current 56 locations in Florida.

“We wanted to utilize Denny’s corporate capital to get" Keke's outside the state of Florida, Denny’s Chief Financial Officer Robert Verostek told analysts during a quarterly earnings call this week. “So we’re doing that in Tennessee right now" with locations of Keke's currently under construction in the Nashville area.

Denny's also plans to increase the number of Keke's in Florida in cities such as Jacksonville and Orlando, Verostek said. A full list of specific target cities or regions has not been announced, but executives said the company has earmarked $100 million in loans to assist Denny’s and Keke’s franchisees in developing new restaurants and remodeling older ones in coming years.

The expansion plans come as Denny’s and other chains continue to deal with lingering issues getting new restaurants approved and built because of factors such as delays in delivery of electrical transformers and related equipment. Many local governments still have big backlogs of permit applications for new projects stemming from the pandemic’s first two years, as some cities report staffing shortages and the continued trend of administrative staffers working from home.

“While we have faced construction challenges and needed to adjust the timelines for several openings, we are extremely pleased with the progress we’ve made,” Denny’s CEO Kelli Valade told analysts.

Verostek said while several Keke’s openings that were originally scheduled for this year will likely be pushed to early 2024 because of permitting and construction delays outside of the company’s control, “the development pipeline for this growth concept continues to take shape.

“Property control has already been secured for 10 future franchised and company-operated Keke’s locations, in addition to signed development agreements from current Keke’s franchisees and continued discussions with Denny’s franchisees,” Verostek told analysts.

National dining chains including Denny’s have reported heeding consumer pricing sensitivities especially during the past six weeks, as interest rates have risen to 20-year highs and other prices for items like groceries and gas remain elevated.

Despite those conditions, U.S. restaurant sales have held up well this year. Eating and drinking places posted nearly $92 billion in September sales, up almost 1% from the prior month and marking the seventh consecutive month of sales growth, according to the Commerce Department. Data showed third-quarter U.S. restaurant sales rising 9.7% from a year earlier, topping the 2.2% annual sales gain for non-restaurant retail categories.

The National Restaurant Association trade group in February projected that U.S. food-service industry sales would reach $997 billion in 2023, up 6.4% from 2022, based in part on higher menu prices and continued pent-up demand.

For its third quarter that ended Sept. 27, Denny's reported total revenue of $114.2 million, down slightly from $117.5 million a year earlier. Net income was $7.9 million, down from $17.1 million a year earlier.