Unfriendly Economy Eats Friendly’s Lunch

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Friendly Ice Cream Corp., which operates a chain of Friendly’s restaurants primarily in the northeast US, has filed for bankruptcy.

This comes as no surprise to me. In August 2010, I wrote about my experience at a Friendly’s restaurant during which, it seemed, time stood still. I was heartened to learn at the time that the slow-serving restaurants were to be revitalized. Part of the plan was to open smaller “Friendly Express” locations.

But now instead of expanding, Friendly’s is closing 63 locations, keeping 424 restaurants running as it restructures. In a statement, CEO Harsha V. Agadi said, “We have made a lot of progress, but our company continued to face significant financial challenges. This was exacerbated by the weak economy and rapidly rising commodity costs that have impacted the entire restaurant industry.”

True, restaurants have taken a hit in the recession, but some have managed to reinvent themselves. Not so with Friendly’s.[more]

The first Friendly’s, an ice cream shop, opened in Springfield, Massachusetts in 1935. It probably should have remained an ice cream shop. Instead, Friendly’s expanded from its admittedly good ice cream into food service. The chain served pretty standard fare — burgers, sandwiches and the like.

While the service was, well, friendly, it was also notoriously slow. The restaurants were quaint; in fact, the decor kind of looked like it hadn’t changed in decades. Friendly’s got into the franchising business too, which made it all the more challenging to control quality from one location to another. Friendly’s always seemed like a ‘tweener — in between a fast food place like McDonald’s and a casual place like Chili’s. But it couldn’t compete with either of them.

The Friendly’s slogan, “Where Ice Cream Makes the Meal,” really said it all. Friendly’s was an ice cream shop disguised as a restaurant. That didn’t taste like a recipe for long-term success.

Interestingly, the Friendly’s brand name carried some weight in the northeast, but it was all because of the ice cream. Friendly’s ice cream could be purchased at the restaurants, both at the counter and in pints, quarts and half-gallons in a small freezer located in the store. It was also available at select retailers. Of course, the grocery store environment was also a challenge for Friendly’s. Despite the brand’s local awareness, competing against national brands like Breyers and Edy’s in the ice cream freezer was no easy task.

In the end, this is a brand that may have moved away from its core value proposition. Friendly’s could deliver the goods when it came to ice cream, but not as a restaurant chain. Bankruptcy isn’t always the end of the road, but it may be the last gasp for Friendly’s

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