Friendly’s Restaurants In The Midst Of Another Comeback

Friendly’s Restaurants has been up and down more than most rollercoasters. Back in 2011, it declared bankruptcy and was acquired by Dean Foods, a large milk producer. After it filed for bankruptcy, yet again, in 2020, it was acquired by Brix Holdings in January 2021, a Plano, Tx.-based restaurant franchiser, which owns Red Mango Yogurt Café, Souper Salad. Humble Donut Co., and Pizza Jukebox.

Brix is committed to turning it around, remodeling and beginning to franchise again—in short, reviving the brand. It’s starting by extending it beyond the Northeast and franchising in Texas.

Friendly’s Restaurants was always considered a casual dining eatery, mostly in the Northeast, known for its signature ice-cream, sandwiches and burgers, a place to dine with family and friends. Until, that is, its restaurants started to get run-down and the menu didn’t adapt to the times.

It currently has 103 locations of which 97 are franchised. But, at the same time, it has shuttered 23 locations between 2020 and 2022, in N.Y., N.J., S.C. Penn., Mass., and Dela.

Damaged by closing so many of its locations, Friendly’s Restaurants is trying a full revival, including remodeling locations and brand refreshing to bounce back.

Sherif Mityas, CEO of Friendly’s Restaurants, based in Plano, Tx, says that Brix believes in the “core of the restaurant brand with its 89-year history.” He says many customers in the Northeast and elsewhere come up to him to share their indelible memories of celebrating their Little League wins or their 8^th birthday party there, and they want to return.

But Mityas acknowledges that Friendly’s fell on hard times. Demographics contributed to its faltering since some of the communities where they were located had a shift in population. Moreover, “some of the restaurant’s operations weren’t to our brand standard. They were old and tiresome. Sometimes to grow you have to shrink,” he says candidly, which is why it shuttered 23 locations.

Now it has a three-pronged plan to revive it that includes: 1) Remodeling its look involving new lighting, new booths, new tables, new murals, a fresh paint job and new colors, 2) Refreshing its menu by introducing appealing items such as its cheeseskirt burgers, with melted cheese prepared on a flattop, and its tangy grilled cheese and marion berry sandwich, 3) Introducing a new marketing approach which centers on “come for celebration, spreading the joy of ice cream.”

It’s marketing this message on various digital channels and partnerships with groups like the Jonas Brothers, who dined at Friendly’s growing up in New Jersey.

For consumers who are health-conscious, it offers plenty of salads including its strawberry salad, Impossible burgers, and sherbets.

It’s proceeding at a cautious rate and Mityas says it is prepared to open “three locations in the next 3 to 5 years in major Texas markets and at least one location in Orlando.”

Why is it franchising in such a moderately-paced way rather than expanding quickly? Mityas replies, “It’s all about ensuring we have the right team, the right operations standards, the right location, the right partners.” Each factor is critical in raising profitability.

It started expanding in Texas because it’s the fastest-growing state, the 8^th largest economy in the world, and has many people with disposable incomes who want to dine out, he suggests.

What, ultimately, differentiates Friendly’s from casual-dining rivals such as Applebee’s or Red Robin, Mityas declares, is “We’re not just built on food, but on food and ice-cream as an integral part of the experience.”

Friendly’s ice cream is sold in major supermarkets across the country, but its’ rights are owned by the Dairy Farmers of America, not Friendly’s itself so Friendly’s receives no revenue from those sales.

However, Friendly’s has an exclusive licensing agreement to use the brand’s name and sell its ice-cream in its eateries.

Jason Kaplan who runs JK Consulting, a New York City based international restaurant consulting firm, says Friendly’s veered off-course when it “lost focus on its core products including its ice-cream.” The stores became outdated, and the food, a bit tiresome and not in touch with current food trends, he suggests.

To revive, Kaplan says it needs to offer a more appealing menu, replete with different sauces and more international flavors to keep pace with current trends and remodel many of its existing stores. “Keep focused on your staple of making great burgers and ice-cream,” he advises.

But many customers on Yelp were glad to see Friendly’s Restaurants back and revived, with some reservations. At the East Meadow, L.I. location, Kimberly from Glen Cove was happy to take her kids back for after-game eats and ice cream after the Syosset location closed due to Covid. She wrote, “With Friendly’s, you know what you came for; it’s not high-end cuisine; it’s classic.”

She noted that the location had been updated and was clean, and her husband liked his Philly cheesesteak sandwich and her son liked his cheeseburger.

Marissa enjoyed returning to Friendly’s, which she wrote “still has the softest ice cream sold in supermarkets with the most authentic flavors.” She added that kids can order food, drink and ice-cream reasonably-priced, but she complained about the service, because she had to wait with her kids 15 minutes to be seated and the table to be wiped. She left a note to management: hire more people.

And why would a franchisee participate in a brand that has closed over 20% of its locations in the last few years? Mityas replies, “You want to be part of an emerging team that is creating significant economic value moving forward.”

A year from today, he envisions “having two or three more restaurants, but the important thing is our entire chain is going to have positive sales and growth.”