Friendly’s: The Rise and Fall
Friendly’s announced on November 2, 2020, that it filed Chapter 11 bankruptcy owing to the “catastrophic effects of COVID-19.”
- Friendly’s: The rise and fall of the fast-casual chain known for its ice-cream and diner-style meals, filed for bankruptcy just 85 years after it was founded in 1935.
- Friendly’s was established by brothers Prestley & Curtis Blake. It has seen its share of ups and downs over its long history. From litigation to family disputes to two bankruptcies.
- At its peak, there were 850 Friendly’s restaurants across the United States. Only 138 restaurants remain.
Curtis Blake and Prestley Blake founded Friendly’s in 1935. It was initially known as Friendly’s.
Friendly’s has won customers with its large ice cream selection, diner-style atmosphere, the solid menu of sandwiches and burgers, and the belief that it provides a family-friendly dining experience.
On the other hand, the coronavirus epidemic has caused chaos in the restaurant industry, especially for establishments that are not able to adapt to curbside delivery or delivery.
Friendly’s CEO George Michel stated that the company had made “significant progress toward reinvigorating the cherished brand” in a time of great upheaval. However, “like many restaurants, our progress was abruptly halted due to the devastating effect COVID-19.”
Friendly’s has filed for Chapter 11 bankruptcy protection.
Here’s how Friendly’s transformed from a family favorite to one of many failing restaurants
Brothers Curtis Blake and Prestley, Friendly’s was established in 1935 under the name of “Friendly”
The Blake brothers opened an ice cream shop in Springfield Massachusetts during the Great Depression. Their goal was to lift people’s spirits through the “friendly” company.
Boston.com reports that double-dipped cones are only 5 cents compared to the 10 cents per scoop in larger shops. Their company grew quickly and they made $27.61 on their first day. That’s the equivalent of $529.48 today.
After opening a second store in West Springfield Massachusetts, the Blake brothers added food to their business
The Blake brothers added more sophisticated ice cream options to the menu, in addition to the “Friendly Burger.” One of these choices was the Blake brothers’ version on a banana split, the “One Dandy,” now called the “Jim Dandy.”
Friendly was forced to close its facilities in 1941 as a result of World War II. They posted signs on the windows of their restaurants promising to reopen them “when we win the war.” The Blake brothers kept their promise and reopened the business in 1945.
Friendly’s number of locations grew over the next three decades. In the United States, it had 500 restaurants by 1974.
In 1950, the company started selling ice cream in large take-home boxes. In 1951, Connecticut and western Massachusetts were home to ten Friendly restaurants.
The company moved its headquarters from Springfield, Massachusetts to Wilbraham in 1960. According to the company’s website, the new offices were constructed next to a creamery, which still makes the ice cream used throughout the Friendly region.
Friendly, a network of 500 restaurants in the Mid-Atlantic and Midwest United States, has been growing since 1974
Curtis Blake was the president of the company. He attributed the majority of the chain’s success to his brother.
According to the Washington, Post Blake said that he couldn’t have done it all alone. Blake said that he couldn’t think big enough as the business grew.
In 1979, Friendly was sold by Hershey Foods Corporation to the value of $160 million
Reese’s Pieces and Oreos were included in the co-branding effort as toppings for sundaes.
Friendly offered more than 60 varieties of ice cream in its restaurants, along with the famous holiday Jubilee Roll that was created in 1975.
A group of investors purchased Friendly from Tennessee Restaurant Company in 1988 for $375 Million
According to the Boston Globe’s reporting, the restaurants were turned into full-service businesses by CEO Donald Smith. Smith is the man behind Pizza Hut’s pizzas and McDonald’s breakfast menu.
A year later, the restaurant chain’s name was officially changed to “Friendly’s”.
The Blake brothers began to feel discontent after Prestley Blake, who paid $2 million to become the largest individual shareholder of the public company
According to the Boston Globe in 2003, Blake tried to force Donald Smith out of his business by filing a lawsuit against him over an illegal private aircraft use. This led to a split between the brothers.
According to Metro West Daily News, Friendly’s board found no evidence of misconduct after it reviewed the allegations. Restaurant Business reports that Donald Smith did however promise to repay the company for the personal use of the corporate plane.
Curtis Blake, Curtis Blake’s elder brother and owner of 13% of Friendly’s wrote to him repeatedly throughout the entire story about Friendly’s sale. Prestley responded to Curtis Blake through the Boston Globe that he believed he was right and that the transaction would go through regardless.
Sun Capital Partners purchased Friendly’s for $340m. The dispute was resolved and Prestley received a $16 million stock purchase for his share of the business.
Curtis Blake passed away in May 2019, at his Florida home. Despite their feuding past, the brothers were closer over recent years. According to MassLive, Prestley claimed that he visited Curtis to be “extremely worried” to see his brother sick.
Prestley Blake is now 105 years old.
Friendly’s launched their famous “I Wanna Go To Friendly’s” ad in 2008. It was targeted at families with children
Friendly’s Express is a new concept in the restaurant business. It opened in Mansfield in Massachusetts in 2009. The following year, three additional Friendly’s Express stores opened throughout Massachusetts.
The restaurants were designed to offer a faster, more convenient alternative to traditional sit-down dining options. All Friendly’s Express locations, however, appear to have been closed or transformed into regular Friendly’s restaurants.
Friendly’s declared bankruptcy in 2011 on the other. It blamed 2008’s recession and rising cream prices for its financial problems
According to the Boston Globe’s 2011 filing, Friendly’s had 423 stores and more than 6,000 employees at its store level. The debt of the chain was $297 million.
Mass Live reports that the company claimed bankruptcy due to many factors, including the 2008 economic downturn and higher cream prices and other commodities. It also claimed high rents and “current unrelated obligations”.
A 2009 Times Union article reveals that common consumer complaints included inconsistent cuisine in different restaurants and slow service at many locations. Both of these issues were addressed by the company.
Friendly’s closed 63 locations that were “underperforming” in October 2011, shortly after the bankruptcy filing was made public.
Friendly was granted permission by the US Bankruptcy Court to sell the business at auction on November 1, 2011. However, the auction was canceled when there were no more than $75 million in bids made by Sun Capital Partners Inc (a subsidiary of Friendly Ice Cream Corp).
In the nine years since the bankruptcy, Friendly’s restaurants across the country have been closing down
Friendly’s declared in 2012 that it would emerge from Chapter 11 bankruptcy protection but that it would close 37 more stores. Despite the bankruptcy, locations continued to close. All 14 Friendly’s restaurants in Ohio closed down in 2014.
According to Nation’s Restaurant News’ 2017 brand loyalty study, only 36% of customers indicated that their last visit to Friendly’s was motivated by the brand and not convenience.
Friendly’s abruptly closed all of their stores in New York’s upstate and several in New England in April 2019. Later that year, the last Friendly’s locations remaining in Rhode Island or Virginia were closed.
Friendly’s filed another Chapter 11 bankruptcy filing amid the coronavirus outbreak and a shrinking consumer base
At its peak, there were 850 Friendly’s restaurants across the United States.
Friendly’s outlets have decreased from 424 down to only 138 since 2011. All remaining restaurants of Friendly’s are expected to remain operational, despite the bankruptcy filing.
Many believe that Friendly’s financial troubles are due to a declining American middle class, the collapse of the chain restaurant industry during the coronavirus outbreak, and low customer satisfaction.
Although Friendly’s future remains uncertain, the business was purchased by Red Mango and Smoothie Factory for $2 million
According to Business Insider, Friendly’s lenders will forgive $88 million off chain’s secured debt and waive the purchase price of $2 million.
Friendly’s CEO George Michel stated that the company has made “significant progress towards reinvigorating [our cherished brand]” during a time of significant upheaval.
He added that “Unfortunately, as many restaurant businesses, our growth was abruptly halted by the devastating effects of COVID-19 which caused a revenue decline as dine-in operations were halted and reopened with limited capacity.”
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