Wednesday, September 07, 2011
Friendly’s Files for Chapter 11 Bankruptcy
Friendly’s, the popular restaurant chain famous for ice cream, milk shakes, and hamburgers, filed for Chapter 11 bankruptcy protection earlier this week. The chain will close 63 stores, resulting in a loss of approximately 1,260 jobs.
The company explained that the slumping economy, increased food costs, and high rents made filing for bankruptcy a necessary step to ensure that the remaining restaurants can stay in business. Friendly Ice Cream Corp. has obtained $70 million in financing and will keep 424 restaurants open while they reorganize through bankruptcy protection. During this time, employee salaries and benefits will continue to be paid, and gift cards will be honored.
Friendly’s is not the first restaurant chain to seek bankruptcy protection during this current economic recession. Other notable restaurant companies who have filed for bankruptcy include:
- Perkins & Marie Callender’s
- Real Mex, which operates El Torito Restaurant and Chevys Fresh Mex
- SSI Group Holding Corp., which operates Souper Salad and Grandy’s restaurant
As the economy continues to struggle, more and more people are choosing to eat out less. This trend does not bode well for other struggling restaurant franchises.