Friendly’s, the 76-year-old hamburger and ice cream casual food restaurant chain, filed for bankruptcy protection under Chapter 11 of the U.S. bankruptcy code on Wednesday.
The Wilbraham, Mass.-based company said that it would close 63 stores—although the remaining 424 outlets will stay open—and it has secured $70 million in financing to keep the company afloat during restructuring.
"The strategic decision to pursue a financial restructuring will allow us to proactively and quickly improve our financial position," said the company’s CEO Harsha Agadi.
Sun Capital Partners, the Boca Raton, Fla.-based private equity firm, which purchased the restaurant chain for $337.2 million in 2007, will negotiate with the company as a leading bidder for restructuring.
Restaurants have struggled in recent months to keep revenues growing, as a high unemployment rate and lack of consumer confidence in the U.S. economy have suppressed the growth of eating out. Food prices have increased in recent months putting further pressure on bottom-line results.
Friendly’s bankruptcy comes one day after another casual food chain, Real Mex Restaurant, filed for Chapter 11 bankruptcy protection.
The bankruptcy was filed in the U.S. Bankruptcy Court in Delaware.