Anyone who is used to getting more than $54,000 a year in pension from Friendly's will not get that in the future.
Friendly's CEO John M. Maguire at the company's Wilbraham headquarters..WILBRAHAM - Friendly’s future is going to look a lot like its past – its distant past – according to new CEO John M. Maguire.
It’ll be a future focused on ice cream and food standbys like Big Beefs, melts, fries and Fishamajigs, coupled with about five standard breakfast items.
Gone will be menu items that Maguire said just don’t fit with the consumer’s notion of Friendly’s: the bourbon barbecue chicken, the quesadilla.
“We have to focus on what our core customer wants,” he said. “I’m not sure anyone comes to Friendly’s for barbecue. But we have barbecue items on the menu.”
Maguire took the helm at Friendly’s about a month ago. And while Friendly’s is beloved here for its nostalgia, any discussion of the current restaurants is likely to focus on notoriously slow service and dirty, run-down restaurant locations.
Maguire wasn’t CEO during the bankruptcy, but he said the alternative would have been to close the chain. He said the bankruptcy saved 377 restaurants and about 5,700 jobs. It also freed up capital to invest in locations.
“I believe that in 12 to 18 months, Friendly’s can start growing again,” Maguire said. “If the locations are not making money, you can’t invest. You can’t grow. That’s when you get the debt coming in.”
Of those jobs, 162 are in the Wilbraham offices and another 134 are in the ice cream factory.
Business is booming at the factory making ice cream and ice cream cakes for a number of retailers including Walmart and Target.
Another 67 people work at a distribution center in Chicopee.
Brothers Curtis L. and S. Prestley Blake founded Friendly’s in 1935 in Springfield’s Pine Point neighborhood; the brothers made the brand famous for simple meals and ice cream. Neither has an ownership stake anymore.
Friendly’s emerged from bankruptcy Jan. 9 after its corporate owners, Sun Capital Partners LLC, repurchased the iconic brand for $122.6 million, and in the process wiped away $297 million in debt and closed more than 100 locations, nine of them in the Springfield area. The sale price was about a third of the $337.2 million owners Sun Capital paid for the chain in 2007.
As part of that bankruptcy, Friendly’s abandoned the company’s pension plan to the Pension Benefit Guaranty Corp. In he next few months, Friendly’s 6,000 retirees will start getting payments from Pension Guaranty, said spokesman Marc Hopkins.
“No one will miss a payment,” he said.
But for some, those checks will be smaller. The Pension Benefit Guaranty Corp. only backs up pensions to a certain maximum: in Friendly’s case, it is $54,000 a year for someone who retired at age 65. Hopkins said it is too early in the transition to know how many Friendly’s retirees will bump into that ceiling.
Anyone who is used to getting more than $54,000 a year in pension will not get that in the future, he said. Also, there is no cost-of-living adjustment, Hopkins said from the agency’s headquarters in Washington.
Maguire deflected most talk of the bankruptcy proceeding. Instead, he said, the his eyes are on the future.
The 19-year-veteran of the Panera Bread chain said beer and wine will probably not be a part of that future. The previous management team obtained a beer and wine license from the city of Chicopee for a location on Memorial Drive. Maguire said that license probably never will be used, as beer and wine don’t fit his vision for the chain.
The move to beer and wine, along with extraneous menu items, are all symptoms of the “mission creep” Maguire said he sees in troubled restaurant chains.
Sales start to fall. So executives start coming up with more menu items in an effort to goose sales. But the new menu items are complicated and they slow down the kitchen, making service slow. The new menu items then fail to catch on, so executives start throwing more ideas against the wall in an increasingly desperate search for something that sticks.
“It’s a death spiral,” Maguire said.
Hugh Robert, restaurant columnist for The Republican and MassLive.com, said Maguire has a point about the proliferation of menu items. He suspects that a lot of those items came out of a corporate headquarters with little thought of how the dishes would be executed in the field.
“In the industry, there is a lot of talk about the veto vote,” Robert said. “That’s when a group of people are deciding where to go and there is always that person who says no because they don’t have steak tips, or whatever.”
But Robert, a faculty member in Holyoke Community College’s hospitality and culinary arts program with more than 35 years of restaurant and educational experience, thinks Friendly’s might be a lost cause.
There is just too much competition out there from fast-casual restaurants like Applebee’s and, yes, Panera Bread. The ice cream business has shifted to premium products like Coldstone Creamery, Ben & Jerry’s and boutique mom-and-pop dipping shops.
“There is just not one thing Friendly’s does better than everyone else,” Robert said. “I wonder if they won’t go the way of Howard Johnson’s.”
Maguire said he knows that Friendly’s is a hit with two age groups: children and senior citizens. His challenge is to serve those customers by going back to basics and build in the middle by improving quality and service. “But it really is all about families,” he said. Back when Friendly’s was talking about beer and wine, Elizabeth L. R. Elam, professor of marketing at Western New England University in Springfield, said Friendly’s needed to focus on its identity as a place for families. “I’m extremely biased because I have young children (ages 6 and 10), and we love Friendly’s,” Elam said at the time.