How Friendly's Pulled Itself Out Of Restaurant Ruin

Founded in 1935 as a lone ice cream shop, Friendly's grew at an impressive rate in the decades that followed the Great Depression. As early as the 1940's, Friendly's had added new items to its menu, branching out by serving savory dishes including burgers and expanding its reputation for serving excellent ice cream-based desserts by introducing the Fribble and the Jim Dandy. The brand was so successful that founders S. Prestley and Curtis Blake were able to sell the chain of some 600 Friendly's restaurants to Hershey's in 1979 for an incredible $164 million. Although Hershey's later sold the chain for more than double this, Friendly's soon started to struggle.

It is difficult to pinpoint exactly what went wrong for Friendly's. However, straying from the brand's specialties of ice cream and American comfort food in the early 2000's likely played its part. As it was sold over and over again, the chain that been so dependable quickly lost its way and customers were soon complaining of rude staff, poor food, and run-down restaurants. By 2011, Friendly's was on its knees and it looked like there was little hope of it surviving. At this point, no one could have imagined the rollercoaster decade that was to follow.

In November 2011, Friendly's filed for Chapter 11 bankruptcy. The company cited several reasons for its failing, including high rent costs, the increased price of commodities such as cream, and restaurant sales that had fallen by as much as 5%. In a statement published by PRNewswire, Harsha V. Agadi, who was CEO of Friendly's at the time, said, "The strategic decision to pursue a financial restructuring will allow us to proactively and quickly improve our financial position and ensure we have the resources to build a better and stronger Friendly's for our loyal guests."

As part of this strategic decision, 63 underperforming restaurants were closed immediately. However, thanks to $70 million in financing, the company assured the public that the rest of its restaurants would remain open and that staff would continue to be paid on time. This was the case, and many Friendly's restaurants remained open until the company was repurchased by Sun Capital, an affiliate of its previous owners, for $122.6 million. After the repurchase was announced, a further 37 stores were closed. These closures were deemed necessary in order for the business to survive in the long term.

When it went into bankruptcy, Friendly's operated just under 500 restaurants. By the time it had emerged from it in 2012, this number had dropped down to less than 300. However, Friendly's was far from done with its cost cutting efforts and restaurant closures became a common theme of the next few years. But it wasn't just restaurants that Friendly's got rid of during the 2010's. In 2016, the company sold its entire ice cream manufacturing and retail business to Dean Foods Co. for $155 million.

The restaurant closures tended to occur in small clusters. For example, December 2018 saw six Friendly's locations close across Massachusetts, Vermont, New Hampshire and New York. Two further locations closed in the following January bringing the total number of Friendly's restaurants down to 200; 101 corporate-owned and 99 franchised. This was a far cry from the approximately 700 locations Friendly's operated in the mid-1980s. In November 2020, it was calculated that Friendly's had closed nearly 70% of its locations in just 10 years. A spokesperson for Friendly's explained the reason behind these closures in a news release recorded by MassLive: "Over the past few years, we have identified and minimized the number of locations that no longer deliver the customer experience that we are working to create."

Despite selling its retail business and closing hundreds of restaurants, Friendly's was in no position to survive the turmoil imparted by the Coronavirus pandemic. As a result, Friendly's filed for Chapter 11 bankruptcy for the second time in less than a decade. Once again, Friendly's made a point of stating that it had sufficient money to keep its restaurants open and its staff paid until its sale was completed.

In a statement published by CNN, Friendly's CEO at the time George Michel said, "Unfortunately, like many restaurant businesses, our progress was suddenly interrupted by the catastrophic impact of COVID-19, which caused a decline in revenue as dine-in operations ceased for months and re-opened with limited capacity."

While Sun Capital blamed the pandemic for Friendly's bankruptcy filing, the company had not been performing well in the years running up to lockdown. As a result, Sun Capital started seeking buyers for the company during 2019, although several were put off by the uncertainty that came with the pandemic. That being said, bankruptcy can strike restaurant chains at any time as the number of fast food chains currently at risk of bankruptcy prove.

Once again, Friendly's emerged from bankruptcy, this time thanks to a $2 million deal which saw Amici Restaurants Group secure the brand and all its assets. Amici is affiliated with Brix Holdings, a company that operates several restaurant chains including Red Mango. As such, it felt confident in its ability to turn Friendly's around.

In a statement recorded by Eater Boston, Amici's CEO Craig Erlich said, "Based on our personal connection to the chain, strong investment capabilities, and seasoned management team, we believe we will be able to continue to reinvigorate this much-loved brand for both loyal patrons and new customers alike."

Aside from securing an astoundingly low sale price, Brix also managed to get Friendly's lenders to waive the $88 million it had in debt. As such, the struggling chain had a rare chance to develop just as the Coronavirus pandemic started to abate. However, Friendly's future success was anything but assured.

After years of decline, Friendly's new CEO Craig Erlich had his work cut out when he took over as part of Amici's buyout. One of his first efforts to regain customers' trust and attract them to Friendly's restaurants involved bringing back some Fan Favorite dishes for a limited time only. This promotion, which ran from the middle of March to early June 2021, saw six previously popular dishes reintroduced to the Friendly's menu. These included Maple Pepper Bacon Supermelt, a sandwich that saw a turkey patty topped with maple pepper bacon and cheddar cheese, all placed inside toasted sourdough, the cheese and bacon-topped Vermonter burger, and the Heinz 57 Burger which, as the name suggests, spot lit Heinz 57, a tangy steak sauce that goes remarkably well with beef patties.

In an interview with FSR, Erlich said, "Fan Favorites, an all-star lineup of menu items that were all popular in the past, is our way of thanking our loyal customers who have supported us." Of course, it was also an attempt to get customers into Friendly's and spending their money again. With bundle prices for a Fan Favorite meal and an ice cream sundae starting at under $12, many customers were extremely happy to take the company up on the offer.

While the Fan Favorite promotion was an effective short term solution to Friendly's problems, the company required a substantial plan if it was to survive in the long term. Brix was aware of this and, in 2022, it kickstarted an ambitious growth plan by launching Friendly's Cafe, a fast-casual concept that spotlight Friendly's popular menu items in a setting that prioritized speed of service. The first Friendly's Cafe was opened in Massachusetts on February 26, 2022.

Aside from offering a potential means of growth for the company, the new fast casual concept was also slated as a testing ground for traditional Friendly's locations. CEO Craig Erlich explained it to Nation's Restaurant News: "We envision Friendly's Cafe as an opportunity for further menu and technology innovation to meet our customer's changing desires, while also still adhering to our mission of bringing family and friends around the table to make new memories."

While the limited edition release of Fan Favorites helped to re-establish the Friendly's brand, Brix knew a full menu redesign was needed in order for Friendly's to thrive in the long term. This was why, in 2022, Brix completely changed its menu, cutting it down from eight pages to two. While streamlining was the name of the game, Friendly's still launched 12 new menu items. These additions included the controversial Doritos Cool Ranch ChoppedCheese Burger; a ciabatta roll studded with a beef patty, cheese, onion, jalapenos, salsa, ranch dressing — which somehow always tastes better at a restaurant — and Cool Ranch tortilla chips.

In a statement released by Friendly's, chief experience officer Roberto De Angelis said, "We want to stay true to this wonderful heritage, while also continuing to evolve, so after carefully studying the emotional connection between our guests and our brand, we are updating our menu. We are keeping the items guests love, eliminating others, and adding sensational new offerings."

While focusing on the new, it is important to note that Friendly's did not lose sight of what made it famous in the first place: ice cream. At the time of the new menu launch, Friendly's also introduced new ice cream flavors such as Barking Pretzel, a brown sugar-flavored ice cream that was studded with pretzel pieces.

In November 2022, Brix announced some senior management changes with Sherif Mityas promoted to CEO and Dawn Petite being promoted to Friendly's president. Both had long associations with Brix and Friendly's prior to their appointment with Mityas previously acting as Brix's president and Petite previously fulfilling the role of Friendly's chief operating officer.

Under new management, Friendly's pushed on with its growth plans. Speaking to FSR a few months after he took over as CEO, Mityas said, "We're going to be putting the accelerator down on generating new development, generating both traditional development in the full-service restaurant space and also in fast casual and potentially nontraditional locations like airports."

Despite this energetic statement, Mityas has been careful to stress that Friendly's is not seeking expansion for expansion's sake. Instead, the brand is looking to grow safely and steadily. It's for this reason that, despite prioritizing growth, one of the only new Friendly's locations opened in 2023 was a temporary pop-up location in Los Angeles. Even during 2024, Mityas expects Friendly's net growth to be zero, thanks to only a few Friendly's locations opening and several others closing.

While a menu redesign and growth plans are all well and good, they would amount to nothing if marketing campaigns weren't able to change the public's perception of Friendly's. Viewed for so long as an outdated chain, Friendly's marketing team were faced with the challenge of convincing the public that the chain was actually a modern and culturally relevant place to dine.

The first concerted campaign launched by Friendly's was named 'Save Room for Ice Cream'. Commercials featured a Friendly's server who was determined to ensure that customers did as the title says. This light and comedic approach was a gentle reminder that Friendly's was focusing on its roots as Eric Kallman, chief creative officer at Erich and Kallman, explained to FSR, "Our goal with the campaign is to remind everyone that Friendly's is back and better than ever in a fun and memorable way [...] The ads perfectly capture the brand's irreverent sense of humor and willingness to have fun."

In September 2023, Friendly's took its marketing to the next level by partnering with the Jonas Brothers, a band who have a history of food collaborations having previously aided in the development of Rob's Backstage Popcorn. As part of the campaign, Friendly's released three limited edition ice cream sundaes, one for each member of the band. Of course, it was Friendly's hope that partnering with the iconic band would help attract younger customers, who might be unfamiliar with the chain, to Friendly's stores.

Another key area that Sherif Mityas focused on was redesigning Friendly's restaurants. In an interview with Restaurant Dive, Mityas said, "We're an 89-year-old brand. And so the opportunity for us to create a newness inside the restaurant — from a design perspective, from an experience perspective — really helps people see that not only is Friendly's alive, but they're relevant again." Of course, a great deal of this redesign focused on aesthetics. Friendly's old locations received new booths and tables along with a lick of fresh paint and new lighting. Some locations even had bright murals added to the walls.

Friendly's didn't focus the entire redesign on looks alone. In an effort to increase revenue, the company began experimenting with adding drive-thrus to its locations. Thanks to nearly a third of restaurant sales coming through ice cream — a product that translates extremely well to the drive-thru setting — the results of these experiments were promising, and the brand is currently adding drive-thrus to many of its original locations. Aside from boosting overall sales, it is hoped that by adding drive-thrus, Friendly's will see a considerable uptick in ice cream sales at times that have traditionally been quieter for the brand. For example, late at night.

As with many other restaurant chains, attracting franchisers is a huge part of Friendly's growth plan. However, it can be difficult to convince people to invest their time and money into opening a restaurant, especially when the brand their thinking about buying into has struggled in the past. That's why Sherif Mityas is taking drastic steps to attract potential franchisers to buy into Friendly's.

The most obvious tactic Mityas is employing is to drastically reduce costs. In an interview with Restaurant Dive, Mityas said, "We're knocking the initial franchise fee of $30,000 in half. And we're also giving a 0% royalty rate for the first six months and 3% royalty for the subsequent six months. And then 6% royalty starting year two." This would make Friendly's franchise fee right at the bottom of what franchisers expect to pay when opening a location. It is important to note that, while this statement was made in August 2024, at the time of writing the Friendly's website still lists the franchise fee at $30,000. It is unclear when this amount will be cut to $15,000.

Under Mityas' leadership, Friendly's is also marketing itself to potential franchisers as an emerging brand that looks set to enjoy several years of solid, manageable growth. Impressive as this sounds, it remains to be seen if this is enough to convince people to put their money on the line.

Despite completely redesigning its menu in 2022, Friendly's has not stopped tweaking its food offerings. The brand has also kept up a steady stream of limited edition releases. The reason behind this is simple: Friendly's wants to make sure its menu remains culturally relevant. This is somewhat challenging given that Friendly's menu leans traditional with burgers, fries, and ice cream dominating. However, the company has found inventive ways to impress customers as CEO Sherif Mityas explained to Restaurant Dive: "How do you make a burger relevant, or fun, or Instagrammable? Well, we created the Cheese Skirt Burger. Imagine this huge fried piece of cheese that sits on a burger. That is Instagrammable. It creates something new and unique, but also tastes great."

One of the ways Friendly's keeps things fresh and relevant is by offering seasonal menus that change throughout the year. For example, its SummerFest menu, which ran June 5 to October 2, 2024, featured eye-catching dishes such as Maine Style Lobster Roll and Fries N' Ice Cream Dipper.

It's not just in product design that Friendly's is innovating but in how it sells them too. In an attempt to keep sales of its regular items high throughout even the quietest times of the day, the company also launched a late night value menu that sees popular items like the Fribble being sold for less than it is during the day.

While Sherif Mityas is looking to attract franchisers from across the country, Friendly's is focusing its growth efforts on southern parts of the United States, particularly Texas. In a statement published by PRNewswire, Mityas said, "Friendly's has the potential to be a beloved brand on a national scale in the way that it already is on the East Coast. We know there are business owners out there, especially in states like Texas, who understand the legacy, impact and opportunities Friendly's will bring to new communities."

The reason why Texas is so attractive for the brand is down to two things: the state's ginormous economy and the fact that many people who grew up in the Northeast have moved there for work. This transplanted workforce, many of whom grew up eating at Friendly's, stand as a massive untapped market for the brand, something Mityas is working to rectify.

This isn't to say Friendly's is avoiding other parts of the South. In June of 2024, Friendly's opened a restaurant in Orlando, bringing its total in Florida to three. The company also has expansions planned for other Sun Belt states, so don't be surprised if you start seeing new Friendly's locations popping up all over the South.