Use this search box to find articles that have run in our newspapers over the last several years.

FRIENDLY’S MELTDOWN?

Date: 10/11/2011

Oct. 10, 2011

By Chris Maza

Reminder Assistant Editor

WILBRAHAM — A day after filing for Chapter 11 protection, Harsha Agadi, chairman and CEO of Friendly Ice Cream Corporation, made a clear statement that the ice cream distributor and restaurant chain was not going anywhere.

At 5:11 a.m. on Oct. 5, Friendly’s filed the voluntary petition in United States Bankruptcy Court for the District of Delaware, but Agadi said the company is not closing its doors, but rather taking the opportunity to restructure.

“There has been more speculation about this than there needs to be,” he said. “In filing for Chapter 11 protection, it helps us prioritize as a company. [Wednesday] was day one of the next 76 years for this company.”

As part of the restructuring, the company closed 63 of its stores that were deemed “underperforming.”

Among those stores was the Wilbraham Road location in the Sixteen Acres neighborhood of Springfield, the East Street location in Chicopee and the Westfield Street store in West Springfield.

Speaking in broad terms, Agadi said stores were labeled underperforming if the quality of the location was in decline, the store’s financial profitability was unacceptable, or if a particular store was too close to other stores.

Responding to a previous media report that the Boston Road location in Springfield that abuts the company’s corporate headquarters had closed, Agadi stressed that that was completely untrue, adding that the location was one of the company’s strongest.

“That is one of our best stores and false reports like that only add to the speculation,” he said.

Agadi said the company has internal policies relating to severance and some employees were offered packages, while others received help from the company in attempts to transfer to other stores. Employees labeled by the company as “top performers” were encouraged to apply to one of the remaining 424 stores.

Even after the closing of 63 stores, the company still employs more than 9,000 restaurant workers in 13 states, he added.

Agadi stressed that Wilbraham will remain the home of the company’s headquarters and he plans to continue to invest in the Pioneer Valley.

“This is where we live and this is where we work,” Agadi, who recently purchased a home in East Longmeadow, said. “We are not disappearing. We are committed to this community. I am a new chair and CEO and I came here with my eyes wide open knowing that the company needs to turn around in several areas. But I wouldn’t have come here and relocated my family if I didn’t believe in this company. We are very committed to being here.”

With the sale of the 63 locations, Agadi said the company will see approximately $700 million in additional revenue, which it plans to reinvest into the company.

The company has already begun to put an emphasis on its ice cream production and distribution, he pointed out.

“We used to service around 4,000 grocery stores and now we are servicing 7,200. We are operating at almost 90 percent capacity,” he said, explaining that Friendly’s recently won a contract to service Wal-Mart locations across the country. “With this much growth, we hope to we will distribute across 10,000 supermarkets and that will require us to expand.”

Agadi emphasized that Friendly’s has maintained a positive cash flow and that September ice cream sales were the highest in the company’s 76-year history.

Changes are also expected for the company’s remaining restaurants.

Two stores in the Greater Springfield area are expected to see some of the reinvestment dollars almost immediately as the company makes improvements to the locations, which have not been named.

“We’re going to start right here,” Agadi said. “We are going to be re-doing two stores in the Greater Springfield area to make them trendier, brighter and more airy. If it works well here, we will start making the changes to all of our stores.”

He also said the restaurants are going forward with their “High 5 Menu,” which features five popular food items for $5.

“If you go to a sit-down restaurant and order a full meal and it costs only $5, that’s a better value than even McDonald’s,” Agadi said.

The company will also begin improving upon the quality of their hamburgers by switching from frozen patties to fresh patties.

Along with the High 5 Menu comes a corresponding attitude that Agadi hopes patrons will see.

“We are now requiring all servers and everyone up through the general manager to be so friendly that when you walk into the restaurant, you’ll get a high five,” he said. “Our goal is to own friendliness. Friendly’s is our name, but we want to get back to it being what we’re all about.”

When asked about whether or not Friendly’s would consider serving alcohol in its locations in order to compete with other family dining establishments with bar service, Agadi said there are no plans to implement such a measure on a broad scale at this time.

“We are testing that in Florida as we speak and we will be studying the results and once that’s done I would be able to talk more about it,” he said. “But our stand is that we are known for our family dining and we focus on kids and families.”



Bookmark and Share