Friendly’s files for bankruptcy, citing ‘catastrophic impact of COVID-19’
Friendly’s will file for Chapter 11 bankruptcy due to the “catastrophic impact” of the coronavirus pandemic, although it projects the majority of its locations will stay open.
The restaurant’s parent company, FIC Restaurants, will sell its assets to restaurant investment group Amici Partners Group, FIC said in a statement Monday.
“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,” CEO George Michel said in a statement.
The company projected the new ownership would retain “substantially all employees” at corporate-owned locations.
“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 said.
The announcement comes weeks after Ruby Tuesday filed for bankruptcy, also citing the “unprecedented impact” of the pandemic.
“[C]omplete elimination of in-store dining, which has historically represented over 90% of the Company’s total sales, struck at the heart of the Company’s business model,” CEO Shawn Lederman said in a court filing in October. The chain intends to permanently close the 185 locations that were closed due to the pandemic, with another 236 remaining open.
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