Friendly's Unhappy Ending

[Javaman]

http://gothamist.com/2011/09/30/friendlys_unhappy_ending.php

After a rough day in the 'burbs, nothing turns that frown upside down faster than a Turkey Club SuperMelt® sandwich at Friendly's, followed by one of their signature "Happy Endings." But in today's economy, nobody can afford to end happily at Friendly's, and the long-running restaurant/ice cream chain is in deep trouble. Like the rest of America, Friendly's is drowning in debt.

The company could file for Chapter 11 bankruptcy as early as next week, the Wall Street Journal reports (paywall). Friendly's, which was acquired by investment firm Sun Capital Partners (they own Boston Market) in 2007 for $337.2 million, already owes $30 million to Wells Fargo. Now, like a clumsy child who drops his ice cream cone in the parking lot, Friendly's is crying for more: The company wants another $70 million in financing to stay afloat... so it can go bankrupt and get sold to somebody else.

All told, Friendly's carries more than $250 million in debt. The moribund economy coupled with rising food costs have reportedly cost the company dearly, and not even a new High 5 menu—featuring the restaurant’s five most popular items for just $5—seems to be enough to bring it back from the brink. In a way, things are coming full circle: S. Prestley Blake and his brother Curtis opened the first Friendly's in Springfield Massachusetts during the Great Depression. Now the Great Recession is dragging them under.

Blake, now 96, no longer has a stake in the company (which has not confirmed it's filing for bankruptcy). But reached for comment, Blake tells MassLive.com, "They have so much debt, I don’t know how they thought they would carry all that debt." Friendly's now employs 10,000 people, down from 12,000 two years go. It has 500 locations nationwide, including one on Staten Island, just in case this news has you craving one of their magnificent Reeses Pieces Peanut Butter Cup Sundaes. Sure, it's high in calories, but you can easily work those off with a robust fight on the ferry home.

______________________________

That's all there was to the article.

On a personal note, I remember going to Friendly's as a teen and getting the Reeses Pieces sunday. Man, I miss those. Probably kill me now.

[H2O Man]

1. In late December

of 1984, I bought a Friendly's ice cream cake for my son's birthday. He was born on 12-26. Over the holiday/birthday weekend, I distinctly remember watching "60 Minutes," which had a segment on how some dentists were thieves. While watching this, I bit into what turned out to be a chunk of green-colored glass, breaking three of my teeth.

It is difficult to find a dentist on a Sunday night, especially so on Christmas weekend.

[Javaman]

2. that is interesting irony.

maybe the dentist syndicate planted glass in all the ice cream cakes to refute that report!

lol

Cheers and sorry about your teeth. :(

[ikri]

3. Leveraged Buyout?

New buyers appear with cash for a profitable company, purchase it outright before taking out a new loan to repay the original finance using the newly acquired company itself as collateral. Lay-offs and cost cutting ensue and a once profitable company is new laden with debt making money for the bank in interest payments and anything left over is likely taken out of the company by the genius financiers who started the buyout.

If the company fails it doesn't matter to the new owners, they're insulated from the debt personally since they got their money out before any problems appear, they'll be hailed as business geniuses for making a quick profit for doing nothing more than placing a ton of debt on the company.

[SharonAnn]

8. That's exactly why I went back to get an MBA. I saw two companies destroyed

by KKR in leveraged buyouts and wanted to understand how all this stuff worked and why two excellent companies with good revenues and solid financials could be destroyed like that.

So, I learned how it's done. But most importantly, I learned WHY it's done. I came face to face with evil and greed. I understood the financial tools that were used, I understood how a few people got extremely wealthy by destroying the companies, and I understood the awful effect of throwing people out of work, I understood how product quality levels were ruined and how customers were screwed.

In other words, the only one(s) who "win" are the leveraged buyout predators. Not only does everyone else lose (and lose big), but many of them are destroyed and the company is ruined.

I've been watching this happen over and over again almost 30 years.

[DebJ]

4. In my experiences, I found Friendly's to be a misnomer after

the 1970s, at least in Maryland. The service consistently ranked among the worst I ever experienced, and I'm not picky.
The employees always looked like they had just been put through a ringer. It made me feel guilty about going in and ordering something.

[woodsprite]

6. At one time, the college town I live in supported 2 Friendly's

They were located just 2 streets apart from each other. One closed 2 yrs ago. The one that's left had originally been an old Howard Johnson's restaurant (I swear it still has the old HoJo carpet). Hubby and I had lunch there together last week and had a most wonderful waitress - pleasant, attentive and 'friendly'. We took advantage of the '5 for $5' menu but left her a $5 tip because we didn't think that 20% of a $14.00 cheque was enough for as good of service that we received.

It's been so helpful for our fundraisers for the kids schools and the group that we sing in. We have made as much as $400 just having people stop by there for dinner on a given night. Gonna be sad to see them go when the time comes . :(

[trumad]

5. Friendly's is the K-Mart of dining experiences.

[eppur_se_muova]

7. Dang. I liked the Friendly's in MD and DE.

Kind of targeted towards big eaters, though.

[Safetykitten]

9. Ahhh...Sun Capital. The morons that ran the company into the ground my sister worked at for years.

They have quite a talent, this group of assholes.