Denny's improving slowly on minority relations

September 20, 1994|By Ann LoLordo | Ann LoLordo,Sun Staff Writer Sun staff writer Ivan Penn contributed to this article.

A year after a much-touted agreement between the corporate owners of Denny's and the NAACP, both sides agree that there has been slow but steady progress toward its goal of creating millions of dollars in business and job opportunities for blacks and other minorities.

Officials of Flagstar Companies Inc. and the National Association for the Advancement of Colored People view the past year as a "start-up" period for the Fair Share Agreement, signed last summer in the wake of discrimination complaints against Denny's restaurants in Annapolis and San Jose, Calif. The seven-year agreement held out the promise of a billion dollars worth of business for minorities by the year 2000.

While progress has been made in several key areas, increasing the number of blacks in the lucrative franchise arena has been troublesome, spokesmen for the groups say. Only one Denny's in the country is owned by an African-American -- a number that has not changed since the July 1993 signing.

But both groups cited the following improvements in Flagstar's minority picture:

* Of 124 new minority hires in management and executive positions, 103 are blacks, according to the company. Of those, 34 are single-store managers. The NAACP says the black management hires represent a 56 percent increase in the past year. Flagstar also named its first black to its board of directors last year, a female college president.

* New contracts with 19 minority suppliers represent $21.3 million worth of business a year -- about 3.5 percent of corporate purchasing, according to Flagstar. The 14 black-owned firms include a crouton maker from Chicago, a paper cup manufacturer from South Carolina and a wax paper producer in Pennsylvania.

* Beginning this fall, the Denny's chain is helping fund a management-training program for unemployed workers at a Seattle community college. Students will work at selected Denny's in the hopes of landing a job after graduation.

Restaurant company leader

The commitments come from one of the nation's largest restaurant companies, a corporation with $2.6 billion in annual sales, 1,500 Denny's restaurants in 48 states, nearly 600 Hardee's, and two steak and charbroiled chicken chains. They come on top of a $45 million settlement the Spartanburg, S.C.-based company reached in May with thousands of Denny's customers who sued, alleging discrimination at its restaurants. And they represent Flagstar's efforts, launched at least two years ago, to improve its "diversity" profile.

"We've made a very sincere effort in a relatively short period of time," said Coleman J. Sullivan, a Flagstar vice president who signed the Fair Share Agreement. "I think the numbers indicate that we are at least moving forward."

Praise despite 'soft spot'

Fred H. Rasheed, the NAACP's economic development director who helped draft the fair share agreement, gave Flagstar its highest marks for increasing minorities in its management ranks, from restaurant managers to corporate vice presidents.

"A tremendous job," he said.

The "soft spot" has been the number of Denny's franchises owned by blacks, he said. The agreement envisioned eight new minority-owned restaurants by the end of 1994. The only black franchisee lost his Los Angeles store earlier this year. But in June, David N. Booker, an African-American and veteran employee, took over a corporate-owned Denny's in Texas.

"The first 12 months constitutes a start-up period for the agreement. I never expected to see dramatic change in 12 months," said Kelly M. Alexander Jr., a North Carolina businessman and member of the NAACP board of directors who monitoring the Flagstar agreement. "What I expected to see was preparation for change and some first steps along that particular pathway. . . . The movement with Flagstar is in the right direction."

Despite Flagstar's progress that is charted in company statistics that cannot be independently verified, the company's efforts

may be lost on the public at large.

Claims of broken promises

In San Jose, Calif., the site of the first discrimination complaint against Denny's, the president of a black businessmen's group said the association was rebuffed in efforts to get work with Flagstar.

"What they are doing is spending money giving it to black consultants. But in terms of Denny's economic commitment to black people . . . that's a fake and a fraud," said Ron McPherson, president of the Santa Clara County Black Chamber of Commerce.

Annapolis Councilman Carl O. Snowden said Flagstar's pledge to find a minority owner for the Denny's where Secret Service agents allegedly were mistreated in 1993 didn't materialize.

"The bottom line is, it was a great public relations campaign but it didn't really produce anything," said Mr. Snowden. "With Denny's, [there's been] absolutely zero outreach in the Annapolis community. It just hasn't happened."

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