One of the other strategies employed by the company has been "re-franchising," or selling company-owned stores to franchisees. This has not only helped the company to reduce debt but should also benefit profitability. Margins on franchised units are typically much higher than company-owned stores. This past quarter the franchise operating margin was 66%, while company-owned store operating margin was 14.8%. Denny's ended the quarter with 1,442 franchised locations and 188 company-owned locations. Denny's is also seeing some growth, with plans for 45-50 new restaurants for 2012. Last quarter, nine franchised units were opened, and the company also signed a development agreement to open 50 restaurants in China. That will be an interesting story to follow. For the quarter, Denny's earned $4.6 million, or 5 cents per share, but that excludes $7.9 million in one-time charges. More important, the company generated $15 million in free cash flow, and by my calculations has generated about 48 cents per share in free cash flow over the trailing 12 months. Year to date, shares are up about 16%. The balance sheet continues to improve. Aside from further debt reductions, cash increased to $21 million. There's certainly more work to be done, and investors have remained skeptical about the story. But as a shareholder over the past 3+ years, I've been pleased by the company's progress. At the time of publication the author had a position in DENN. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage. Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit. Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.