In October, Friendly’s restaurants filed for bankruptcy protection, closing about 100 of its 500 locations scattered along and slightly inland of the East Coast. Now emerged from bankruptcy court, sources note that the restaurant has shifted its focus toward ice cream products designed for distribution to grocery retailers, and is seeing positive results.

Here’s a look at the details of that shift and what individual bankruptcy filers can learn from it:

• This year, Friendly’s introduced branded ice cream products into 2,400 Walmart locations, 300 A&P and Pathmark supermarkets, 200 Food Lion stores, 178 Giant Food outlets, 70 Target locations, and others. In total, Friendly’s increased its supermarket presence by 40 percent.
• At present, Friendly’s already outsells national competitors (including Breyers, Edy’s, and Turkey Hill) in some New England stores.
• Last year, the Friendly’s ice cream cake manufacturing plant produced 1 million cakes for distribution, up from 300,000 a few years before.
• The chain’s Executive VP of Retail Financing has noted on the record that he would like to double the chain’s supermarket presence in the next three to five years.

Adjusting to the Times after Bankruptcy

Analysts have noted that the restaurant industry was one of the hardest hit by the recession. Since the crash of the housing market, Americans have been eating out less often and less lavishly—meaning, in some cases, that diners are skipping appetizers and dessert when they did go out for a meal.

For Friendly’s, this translated to a serious decrease in what had once been its bread and butter: in-restaurant sales of ice cream products. Even as Americans’ consumption of ice cream in restaurants decreased in recent years, though, our ice cream eating at home rose significantly.

Friendly’s made the difficult decision to shift its long-time focus on restaurant ice cream sales to the potentially more lucrative grocery store sales. Why difficult? Because in order to produce the quality and quantity of ice cream demanded by grocery store customers, Friendly’s had to overhaul its factories, which reportedly cost several million dollars.

The expense may have contributed to the company’s need for bankruptcy protection, but it also paved the way for success following its bankruptcy discharge. Now, Friendly’s is on the road to recovery thanks to its in-store sales of ice cream products.

Here’s how you can make Friendly’s bankruptcy maneuvers work for you:

• Think long-term. We usually know what financial decisions will make the most sense for us in the long term, but we’re often pressured to make other decisions. Ultimately, choices made with the long view in mind will pay off… in the long run.
• Don’t fear bankruptcy. Done right, bankruptcy allows individuals and companies shed debt and emerge healthier, stronger, and able to get ahead financially.
• Mind the times. Things that worked for you last year or ten years ago may not work today. The sooner you accept that and adjust your finances accordingly, the easier your transition out of bankruptcy is likely to be.

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