Friendly's Restaurant Chain Facing Financial Struggle
By Paul Tuthill
Wilbraham, MA – The Friendly Ice Cream Corporation, the Massachusetts based iconic restaurant chain , is said to be struggling financially. It's troubles could lead to a bankruptcy filing. WAMC's Pioneer Valley Bureau Chief Paul Tuthill reports.
Friendly's, in a statement last week, acknowledged it was feeling the impact of the economic downturn , rising commodity prices and what it called a challenging market place. The company, which is based in Wilbraham Massachusetts, and has about 500 restaurants around the country, said it was exploring alternatives to strengthen its financial base. The company would not comment on reports in the Wall Street Journal, and elsewhere that it is considering filing for Chapter 11 bankruptcy protection and possibly selling the business.
While all restaurant chains have been impacted by the economy, Friendly's may have a bigger problem. It ranked 10th out of 12 restaurant chains in a consumer survey published last month in the trade publication, Nation's Restaurant News. Dennis Lombardi, an executive with WD Partners, an Ohio based consulting firm that did the survey said Friendly's received low scores in such areas as value and food quality.
Lombardi says Friendly's is now trying to attract new customers with a promotion called..High Five.. which offers five of the chain's most popular menu items, each priced at five dollars
Friendly's has been a part of Massachusetts history since it started as a single ice cream store in Springfield, opened by brothers Prestley and Curtis Blake in the middle of the Great Depression. The brothers grew the business following World War Two and through the 1970, eventually selling to Hershey Food Corporation. Friendly's went public in 1997. Four years ago, it was purchased by a private equity firm Sun Capital Partners. Friendly's is reportedly carrying hundreds of millions of dollars in debt.
James Vinick, a stock broker, who along with his clients once owned about 12 percent of Friendly's, but has no financial stake in the company now, says it is not necessarily the end of the line for Friendly's..
Friendly has about 10 thousand employees. About 300 work at its headquarters and ice cream manufacturing plant in Wilbraham.