Financing

Friendly’s closes 23 locations

The struggling chain has shuttered a quarter of its locations since 2017.
Photograph: Shutterstock

Friendly’s closed 23 locations in the Northeast over the weekend, following a monthslong strategic assessment of its company-owned locations that has further accelerated the chain’s shrinking footprint.

The closures, mostly in New York, Connecticut, Maine, New Hampshire and Massachusetts, represent a fifth of the company’s corporate locations and leave the Wilbraham, Mass.-based chain with 77 company restaurants and 97 franchisee units.

The closures continue a trend toward fewer locations in recent years. Since 2017, the company and its franchisees have closed 57 restaurants, or about a quarter of its locations.

When Sun Capital Partners took the chain private in 2007, for more than $300 million, the brand operated more than 500 total locations. The company filed for bankruptcy protection in 2011.

Sales last year declined by more than 11%, to $248 million, according to Technomic Ignite data.

George Michel, the chain’s CEO, told franchisees on Monday that many of the newly closed locations are in areas that have “changed dramatically” since they were first opened.

“As we mentioned earlier this year, we initiated a strategic assessment of our corporate-owned restaurant footprint, with an eye toward ongoing viability and maximizing resource investment,” Michel wrote in the letter, which was shared with Restaurant Business.

“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.”

Friendly’s has struggled in recent years to regain momentum, even after emerging from bankruptcy. The company has closed locations and in 2016 sold its retail ice cream business to Dean Foods.

Sun Capital for years operated Friendly’s along with Johnny Rockets under a single CEO, John Maguire, until last year, when Michel, former CEO of Boston Market, was tapped to lead Friendly’s on its own.

In his letter, Michel said the brand was working to “chart a successful course forward in the face of shifting customer preferences, increased competition, and rising costs.”

“While this was a tough decision, we are confident it [will] best position the brand for a bright future,” he wrote.

Last month, the company hired a new roster of marketing and public relations agencies to further its strategic repositioning. Those firms include Boston-based ad agency The Fantastical, Boston-based digital and creative agency HYFN and New York-based strategic communications firm LAK Public Relations. They are working alongside the chain’s incumbent media agency, Cam Media.

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