Friendly's Files for Chapter 11 Bankruptcy amid COVID-19 Pandemic
The restaurant chain said that "nearly all" of its 130 locations will remain open and the deal will protect thousands of jobs.
Friendly's, the chain restaurant that is best known for its Fribble milkshakes, has filed for bankruptcy.
According to a news release, FIC Restaurants, Inc. — the parent company of Friendly's — revealed that it has filed for Chapter 11 bankruptcy protection amid the ongoing coronavirus pandemic. The company says the current health crisis caused the restaurant's sales to drop.
The Massachusetts-based company announced that it plans to sell itself to restaurant investment firm Amici Partners Group and it is asking the bankruptcy court to approve the sale and confirm the Chapter 11 plan in mid-December.
Friendly's added that "nearly all" of its 130 locations will remain open and the deal will protect thousands of jobs.
"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 FIC Restaurants, said in the release.
Detailing that they achieved efforts to mold the brand with the current times by "focusing on take-out, catering and third-party delivery," Michel notes that it wasn't enough to keep the company afloat.
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"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 re-opened with limited capacity," he added.
According to CNBC, this isn't the first time that the food company has filed for bankruptcy either. The company first filed for Chapter 11 in October 2011, the outlet states.
"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.
He added: "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."
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