WILBRAHAM, Mass. ( TheStreet) -- Friendly's Ice Cream chain filed for bankruptcy on Wednesday, but will keep most of its restaurants open while closing a number of its weaker performing locations.
The company attributed its woes to rising commodity costs, particularly for cream, as well as high rents. Friendly's will keep 424 of its restaurants open, while closing 63 under-performing locations. Friendly's has around 10,000 employees across 15 states, and is well-known for its ice cream and burgers. Opened in Springfield, Mass. in 1935, the original founders sold the restaurant chain to Hershey ( HSY) in 1979; it was later sold in 1988 to Donald N. Smith. Friendly's began trading publicly in 1997 at $18 per share, and was then purchased by private equity firm Sun Capital Partners in 2007 for $395 million, or $15.50 a share.
In its Chapter 11 bankruptcy filing, Friendly's said it plans to seek a sale of itself in an auction with an affiliate of Sun Capital as the lead bidder. The auction is expected to take place in early December, and all bids will have to be submitted by Nov. 24. A minimum of $122.6 million in cash will be necessary to qualify as a bidder.