Friendly's Ice Cream Corp., the parent company to the popular restaurant chain Friendly's, filed for bankruptcy earlier this month. And while some locations have already closed, the plan is for 424 restaurants to stay open while the company reorganizes under Chapter 11 bankruptcy. The company has also already secured $70 million in financing to help make this reorganization possible.
According to Friendly's, 63 locations have already closed, including six restaurants in Florida. At least one of the Florida locations also closed even before the bankruptcy was officially filed.
Each one of these now closed locations had approximately 20 employees. This means across the country an additional approximate 1,260 people are now out of work. And, if more stores close, more will also end up unemployed.
When looking at Friendly's need for reorganization, even though the company has been in business for 76 years, it was still affected by today's tough economy. In fact, this is only one of many restaurants that have had to file for bankruptcy due to the fact that many are still struggling financially themselves, and choosing to cut out the extras in life, like going out to eat.
In addition to the economic downturn, Friendly's also cited increased rents for its restaurant's spaces, as a reason for needing to file for Chapter 11 bankruptcy.
In the end, the message is one that we've talked about numerous times in the past: Times are tough right now and individuals and businesses are both struggling. However, instead of just giving up, it's best to look into what options there are to reorganize or discharge debts.
Source: Florida Today, "Friendly's restaurants enter into bankruptcy," Oct. 6, 2011