Friendly’s, the New England-born chain that built its name on burgers and ice cream in the same booth, has new ownership and a comeback plan after years of decline and two bankruptcies.
The buyer is Amol Kohli, who runs Legacy Brands International. His investment group purchased Brix Holdings (parent of Friendly’s) from Jamco Interests and John Antioco for under $50 million in a stock purchase.
The deal gives Legacy Brands ownership of the entire Brix portfolio, including Clean Juice, Orange Leaf, Red Mango, Smoothie Factory + Kitchen, Souper Salad, and Humble Donut Co.
Kohli is stepping in as chairman. His connection to the brand goes back decades, when he worked at Friendly’s as a teenager. More recently, he was the chain’s biggest remaining franchisee, with more than 30 locations under his control.
A long slide
At its high point in the late 1980s and early 1990s, Friendly’s was running over 850 restaurants. That number now sits at 87, according to Franchise Times.
The chain filed for Chapter 11 bankruptcy twice in 2011 and then again in November 2020, when the ice cream brand shut 63 of its 500 then-remaining locations. At that point, the company was carrying $250 million in debt and had arranged a 363 sale process with private-equity owner Sun Capital, which served as the lead bidder.
During the bankruptcy, CNBC reported that the company planned to sell nearly all of its assets to Amici Partners Group (an affiliate of Brix Holdings) for around $2 million. That transaction, completed in early 2021, brought Friendly’s under the Brix platform.
Where it started
Entrepreneur brothers S. Prestley Blake and Curtis Blake opened the first Friendly’s in Springfield, Massachusetts, in 1935, serving five-cent ice cream cones. The model expanded over the decades into something between a diner and a dessert counter, the kind of family spot where someone could order a burger, a club sandwich, fries, and then a sundae for the kids.
The chain leaned heavily on quirky menu items along the way, such as the Fishamijig fried fish sandwich, the Fribble shake, and the Happy Ending Sundae.
What went wrong
Jason Kaplan, who runs JK Consulting in New York, told Forbes the brand drifted from what made it work. “The stores became outdated, and the food, a bit tiresome and not in touch with current food trends,” he said.
His advice for the new ownership group is short: “Keep focused on your staple of making great burgers and ice cream.”
There’s also a structural issue Friendly’s runs into when competing against Chili’s and Applebee’s. It doesn’t serve alcohol. Big chains pull hundreds of millions a year off alcohol sales, according to Technomic data cited by Nation’s Restaurant News. Those drinks carry far higher margins than food.
The plan
Kohli reportedly wants to push Friendly’s into Southeast and Southwest markets, including Georgia, the Carolinas, and Texas, to build brand awareness in places where the chain has little to no footprint.
Whether nostalgia and a sundae menu are enough to compete with sit-down chains that have liquor licenses and updated dining rooms is the open question. The 87 remaining stores have so far hung on through two bankruptcies and a long retreat from a peak that ended over thirty years ago.
Sources: PR Newswire, The Street, Franchise Times, Friendly’s