Friendly’s Shutters 23 Restaurants in 'Tough Decision'
Earlier in the year, Friendly’s initiated a strategic assessment of its corporate-owned restaurant footprint, the chain’s CEO, George Michel, wrote in an April 8 letter to franchisees. The company was keeping an “eye toward gonging viability and maximizing resource investment.”
One side effect is the closure of 23 company-run units, which shuttered across the Northeast this past weekend. The retraction represented a fifth of Friendly’s corporate stores. It now has 77 company units and 97 franchised stores. Friendly's has closed 57 restaurants since 2017. There were 515 total locations when Sun Capital Partners bought the legacy brand for $337.2 million in 2007.
Michel wrote in the letter that Friendly’s plans to accelerate reinvigoration efforts. “Amidst these industry-wide dynamics, our charge is to ensure our beloved brand not only remains relevant with existing audiences but continues to resonate with new generations of patrons and that our operations are structured to support long-term sustainability,” he said, referencing changing demographics, increased competition, rising costs, and shifting consumer preference.
The Wilbraham, Massachusetts-based brand, founded in 1935 by brothers Prestley and Curtis Blake as Friendly (the apostrophe-s was added later), has travelled a rocky road lately. Friendly’s filed for chapter 11 bankruptcy protection in October 2011 and closed a total of 100 underperforming stores, including 40 in its homebase of Massachusetts, in an effort to improve business operations. The bankruptcy cleared $297 million in debt.
Friendly’s had 254 restaurants at the time (121 company run), and was down to 230 stores, evenly split between corporate and franchised, when Michel took on the CEO role last September. He replaced former Panera Bread executive John Maguire, who left Friendly’s after six years to join Mod Pizza. He also headed up Johnny Rockets during that span. Michel previously worked as CEO of Boston Market Corporation, a job he held since October 2010.
Fourteen of this past weekend’s closures occurred in upstate New York. Three were in Massachusetts, three in Connecticut, two in New Hampshire, and one in Maine.
“In today’s environment, it is incumbent upon all restaurant operators to engage in such a process, but particularly so for Friendly’s, which, as an established brand, has locations in geographic areas that have changed dramatically in some cases since those restaurants first opened,” Michel wrote in the letter.
"While this was a tough decision, we are confident it will best position the brand for a bright future," he added.
He said Friendly’s would turn focus to refreshing its menu, adding off-premises channels, including delivery and catering, and improving the overall restaurant experience.
Some reports surfaced that Friendly’s abruptly closed stores without informing employees. However, the company released a statement to several media outlets that employees were, in fact, informed personally and not via a sign. Also, that it’s working to support them with opportunities at other locations, severance pay, and offering other assistance.
Friendly’s was sold to Hershey Foods in 1979 and changed hands a few times before becoming an independent corporation. Sun Capital purchased Friendly’s in 2007. Friendly’s operated 515 total units throughout the Northeast and several Southeastern states at the time.
Friendly’s, Johnny Rockets, and Boston Market are all owned by the investment firm.
The chain has made several key changes since being acquired, including updating its design, launching drive thrus in many stores, bringing in the Friendlier Prices menu, and improving brand positioning in the marketplace.
In March, the company appointed three new agencies of record “as part of its efforts to reinvigorate the beloved community-oriented brand as consumer dynamics and the restaurant marketplace continue to evolve,” it said.
The group of agencies hired to create and execute a 360-degree rebranding campaign alongside incumbent agency Cam Media, a Boston area integrated media buying service, are: The Fantastical, a Boston-based advertising agency; HYFN, a Boston-based digital and creative agency; and LAK Public Relations, a New York-based strategic communications firm.
“While the Friendly’s brand has long enjoyed a special place in the hearts of consumers, our charge is to infuse a new energy so that it not only remains relevant with existing audiences but also resonates with new generations of patrons,” Michel said at the time.