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Franchisee may buy Friendly’s Ice Cream

It was reported in the Rochester Democrat & Chronicle in an article by David Tyler that the Kessler Family LLC of Brighton, NY, the largest franchisee of Friendly Ice Cream Corp., may be interested in buying the chain.

The Kessler company said Monday it has retained Mastodon Ventures Inc., a merger-and-acquisition firm in Austin, Texas, to explore “strategic alternatives,” including the purchase of some or all of Friendly’s assets.

The move follows Friendly’s announcement last week that it had retained Goldman Sachs & Co. to explore its own set of strategic alternatives.

Friendly Ice Cream has a network of 530 franchised and company-owned restaurants and distributes ice cream at 4,500 supermarkets. The company has been in a public battle with Sardar Biglari, head of the Lion Fund and Western Sizzlin Corp., which controls about 15 percent of Friendly’s shares. Biglari and associate Philip Cooley are seeking seats on Friendly’s board.

The company has also drawn criticism from 91-year-old co-founder Prestley Blake, who was 20 when he and his brother opened an ice cream shop in Springfield, Mass., during the depths of the Depression, selling double-dip cones for a nickel.

Kessler Family, run by brothers Dennis and Laurence Kessler, is the largest Friendly’s franchisee, with 46 restaurants. Reached Monday, Dennis Kessler declined to comment, citing the early stage of the process.

Robert Hersch, a principal in Mastodon, said the Kesslers wanted to explore options because “they believe in the Friendly’s concept.”

“Most of this is up to Friendly’s,” Hersch said.

Asked if the Kesslers supported Biglari’s effort, he said, “no comment.”

In addition to the Friendly’s restaurants, Kessler Family owns upstate Burger King restaurants.

About Jim Coen


  1. Hm. Interesting stuff. Thanks Jim. If the franchisor hired Goldman Sachs to evaluate alternatives, what prompted them to do that? I’m curious why the franchisor feels compelled to sell out now.

  2. Ryan,

    The pot was stirred by the largest stockholder; Sardar Biglari. He sent a letter last week to other shareholders outlining his strategy to shake up the chain if he and business partner, Philip L. Cooley, win the two directors seats up for election at the company’s annual meeting in May. He said the firm needs to convert more company-owned stores to franchises and curb executive compensation.

    Until recently, Friendly’s stock has been moribund, too. Only once this decade has the stock flirted with the $18 price range of its 1997 initial public offering, but otherwise has been long depressed. The announcement of hiring investment banker Goldman Sach’s and Sardar’s letter to stockholders have been tonic to the stock price; shares have jumped 25% since last weeks announcements to $14.28, the highest since June 2004.


  3. Friendly’s is like Denny’s with an ice cream focus, isn’t it? It’s been so long since I’ve eaten there, but I don’t remember the food being especially good. What you buy one?

  4. I’m not sure anyone went to Friendly’s for great food, or for great service for that matter. Friendly’s concept served the family, comfort food, it was a place where everyone could find something on the menu they like. They did it with waitress service and an ice cream counter (take out window). Serving hot food and hard ice cream with a counter and table service is hard to do today (labor intensive). Those days are over, QSR is where its at today: quick service, good food, fair price. Friendly’s needs to reinvent itself or fail. The reality is they have some great locations. There is value there for the right buyer.

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