Restaurant Chain Friendly’s Files for Chapter 11 Bankruptcy
Citing the economic downtown and rising food costs, the parent of the Friendly's restaurant chain filed for Chapter 11 bankruptcy protection on Wednesday and closed 63 underperforming stores.
The 76-year-old franchise, based in Wilbraham, Massachusetts and known for its ice cream and hamburgers, will continue to operate more than 400 restaurants as it restructures.
"The strategic decision to pursue a financial restructuring will allow us to proactively and quickly improve our financial position and ensure we have the resources to build a better and stronger Friendly's," said Chief Executive Harsha Agadi.
Friendly's joins other eateries that have recently filed for bankruptcy such as Perkins & Marie Callender’s, Sbarro Inc., Fuddruckers, and Charlie Brown's Steakhouse.
Restaurants and food companies have struggled during the recession. People have been dining out less, and rising costs of corn, butter and other ingredients have drained capital and made a bad situation worse.