Friendly Ice Cream Shaves Off the Fat and Exits Bankruptcy

Last October, the Friendly Ice Cream Corporation, based in Wilbraham, Massachusetts, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware. Suffering the consequences of increased commodities costs (such as the cream ingredient), high rents, and the recessionary diminution of its regular customer base, Friendly Ice Cream Corp. launched its financial reorganization with the immediate closure of 63 restaurant’s along the East Coast, leaving only 424 of its ice cream shops operating as usual. Friendly also provides ice cream and desert products to retail store and supermarkets chains, but the manufacture and distribution of those products was not affected by the Chapter 11 filing.  If You’re looking for a a great Gilbert bankruptcy lawyer look no further!

Friendly’s Ice Cream, LLC, purchased the bankrupt Friendly Ice Cream and its subsidiaries and, since January, the restructured organization has emerged in a leaner brighter flavor. The debtor was able to renegotiate all but 37 lease agreements. Because those remaining landlords’ refused to renegotiate the restaurant leases during the Chapter 11 reorganization in a way that was favorable to the debtor, all 37 restaurants were closed effective January 8, 2012. Friendly’s now has 380 restaurants with approximately 8,000 employees, down from 9,000 employees when it entered bankruptcy in October. Friendly’s promised its employees at the closed eateries (about 20 workers per ice cream shop) that it would relocate as many workers as possible into their other nearby restaurants.

Exiting bankruptcy in January, CEO and Chairman Harsha V. Agadi was pleased with the expeditious Chapter 11 and is hopeful for a financially solid future for Friendly’s:

“The completion of our financial and operational restructuring in just over three months is a significant accomplishment. It is a testament to the hard work and dedication of our employees as well as the ongoing support of our restaurant guests, franchisees, retail customers, and vendors… As a now better-capitalized company, more able to compete in the casual family restaurant sector, we look forward to building on Friendly’s rich 76-year-old history.”

Where Ice Cream Makes the Meal® – 76 Years of Ice Creamy Goodness

The year was 1935 and the Great Depression was the harsh reality for almost every family in the U.S. It was also the year that two brothers, Curtis (age 18) and Prestley Blake (age 20), opened their Friendly Ice Cream shop in Springfield, MA. In 1940, they opened their second Friendly Ice Cream shop, adding food items to their menu and, particularly, the Friendly Hamburg. By 1951, the chain had expanded to 10 restaurants and, in 1960, the headquarters moved to Wilbraham. With 500 restaurants in the chain, the Blakes sold their successful company in 1979 to Hershey Foods Corp. Less than a decade later, in 1988, Donald N. Smith bought Friendly from Hershey and changed the name from Friendly to “Friendly’s.” In 2007, a Sun Capital Partners, Inc., affiliate acquired Friendly’s in a leveraged buyout. In 2012, going on 77 years, Friendly’s is still offering double-scoops and great comfort food.