Friendly’s, the venerable family dining chain that has been struggling for years, declared bankruptcy over the weekend and has an agreement to be sold to Amici Partners Group for just under $2 million.
Amici is affiliated with Brix Holdings, a multi-concept company that owns Red Mango, Smoothie Factory, Souper Salad, Redbrick Pizza and Greenz.
As part of the deal, Friendly’s lenders have agreed to waive nearly $88 million in secured debt, according to court documents.
“Over the last two years, Friendly’s has made important strides toward reinvigorating our beloved brand in the face of shifting demographics, increased competition and rising costs,” George Michel, CEO of Friendly’s owner FIC Restaurants, said in a statement. “Unfortunately, like many restaurant businesses, our progress was suddenly interrupted by the catastrophic impact of COVID-19.”
In a press release, the company said that “nearly all” of its 130 locations are expected to remain open.
Friendly’s has been struggling for years and this isn’t its first Chapter 11 filing. Once a popular and prevalent ice cream-centric family dining concept with drive-thrus, it filed for bankruptcy back in 2011. The company has shed nearly 70% of its locations over the past decade, to 130 from 507, according to Restaurant Business sister company Technomic.
According to court documents, Friendly’s has been “losing money for some time” and had been borrowing money to sustain operations. Friendly’s in recent years had hired advisers from Carl Marks to fix its finances.
The company had also increased its focus on drive-thru, delivery and takeout, an effort that “was producing positive results,” the company said in a filing.
Friendly’s was put up for sale last year and had interest from a handful of buyers before the coronavirus began spreading in March and the process was suspended. Brix Holdings continued to be interested in the company throughout the bankruptcy process.
Brix and Friendly’s reached a deal on a sale for $1,987,500 on Sunday, according to court documents. It will also assume some liabilities. As part of the deal, the company’s lenders—Sun Ice Cream Finance, which is affiliated with Friendly’s private equity owner Sun Capital Partners—have waived the company’s debt.
Michel said that the filing and planned sale to a “deeply experienced restaurant group will enable Friendly’s to rebound from the pandemic as a stronger business.”