Denny's will restructure its company and franchise management structure, but cut no in-restaurant positions, according to company spokeswoman Debbie Atkins.
The Spartanburg-based company plans to reinvest about $3 million of the savings into initiatives to boost sales.
"This realignment is part of an ongoing effort to improve the way we manage our business in order to strengthen the Denny's brand," Nelson Marchioli, the company's president and chief executive, said in a statement.
He said restructuring the company's leadership should cause its restaurants to "operate more effectively and efficiently."
Cost reductions, including one-time expenses, are expected to be about $1 million for the fourth quarter.
Denny's said it should meet 2007 full-year earnings guidance for flat to $10 million in adjusted income before taxes, excluding restructuring charges in the third quarter.
The company has nearly 1,500 restaurants in the U.S. and several countries, with annual sales exceeding $2 billion. More than 500 are owned and operated by Denny's Inc., while the rest are franchised.