Restaurant chain and ice cream retailer Friendly's, an iconic fixture on the East Coast, has filed for bankruptcy protection, citing "the catastrophic impact of COVID-19" on its business.
"Nearly all of Friendly’s 130 corporate-owned and franchised restaurant locations are expected to remain open subject to COVID-19 limitations, and the transaction is expected to preserve thousands of corporate-owned restaurant team member and franchisee jobs," the company said. In the statement, the company said it has enough cash on hand to continue operating, including settling payroll and vendor obligations.
George Michel, CEO of FIC Restaurants, said in a statement that, over the past two years, the company had taken key steps toward "reinvigorating our beloved brand in the face of shifting demographics, increased competition, and rising costs."
"Unfortunately, like many restaurant businesses, our progress was suddenly interrupted by the catastrophic impact of COVID-19, which caused a decline in revenue as dine-in operations ceased for months and reopened with limited capacity," he added.
Friendly's has requested a court hearing in mid-December to confirm its chapter 11 plan and to approve its sale.
“We believe the voluntary bankruptcy filing and planned sale to a new, deeply experienced restaurant group will enable Friendly’s to rebound from the pandemic as a stronger business, with the leadership and resources needed to continue to invest in the business and serve loyal patrons, as well as compete to win new customers over the long-term,” Michel said.
“Importantly, it is also expected to preserve the jobs of Friendly’s restaurant team members, who are the heart and soul of our enterprise and have been critical to the progress we have made in transforming this iconic brand,” he added.
The company has declared chapter 11 bankruptcy before, with Forbes reporting that Friendly's filed in October 2011, citing high rents, growing commodities costs, and general economic malaise.