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Fribbles, pensions and Mint Chocolate Chip

In today’s Globe, Jenn Abelson has a short punchy interview with the new head of Friendly’s. He says the company will be back and pensions are safe. Fribbles too.

On the Hot Seat

http://bostonglobe.com/business/2012/01/29/friendly-back-firmer-ground/kAnq0J5aXqq7hHVyNUpDTM/story.html

Friendly’s back on firmer ground
By Jenn Abelson
Globe Staff

Harsha Agadi, chief executive of Friendly’s.

Harsha Agadi loves mint chocolate chip ice cream and strawberry Fribbles. The 49-year-old Friendly’s chief executive continued to rely on these dairy indulgences after the Wilbraham chain filed for Chapter 11 last fall. Agadi, in his first extended interview since the company emerged from bankruptcy this month, spoke to Globe reporter Jenn Abelson about the challenges of Chapter 11, the need for crisper french fries, and what the future holds for the home of the Fribble.

What lessons did you learn from overseeing a company in bankruptcy?

You can never be a good enough communicator. You always have to do more than you think. We did internal town hall meetings every two weeks. We should have done it more. And we needed to be more aggressive in our communication with the media about our plan. We were battling with wild rumors – “Are we going to survive?’’ “Are we going to exist?’’

We needed to state more clearly the benefits of going through Chapter 11. The biggest savings was a dramatic reduction in our rents across the board.

Doesn’t Friendly’s share some blame for this situation? The company sold its real estate several years ago for a lot of cash. And then the restaurants leased back the locations – so Friendly’s should have known what it was getting into.

The company is responsible to some extent. But real estate values starting in 2008 have crashed nationwide so if restaurants are able to renegotiate leases they become more competitive. Many of the landlords renegotiated. But we also had to close a few stores.

Was it disappointing that no one else bid for Friendly’s besides Sun Capital, which bought the company in 2007? Did you expect others would have interest?

We had a lot of people who signed confidentiality agreements. It just so happened at the end of it all, Sun Capital was successful in bidding.

The auction was canceled because Sun Capital made the only offer.

I think for some others that were looking at [Friendly’s], it was not a convenient time for them.

The federal government accused Friendly’s and your owner, Sun Capital, of filing for bankruptcy to dump retirement obligations for thousands of Friendly’s employees and retirees. Will they get their full pensions?

The money is secure. The retirees are accessing their pensions. I don’t see any risk there. I’m not one of the pension holders, but as far as I can tell, nothing negative is going on.

Was business hurt by the bankruptcy?

We had the highest ice cream production ever in 76 years during October, November, and December. And it looks like January will be a record as well. The loyalty was clearly demonstrated. When we were having difficult times, the consumer has embraced us and wanted to help us out.

What is your response to skeptics who say Friendly’s is no longer relevant?

Six hundred million dollars of business is relevant. Eight thousand employees is relevant, and millions of customers daily is relevant. But in all honesty, Friendly’s needed to improve.

What are you doing to fix the business?

The entire workforce is fixated on improving the overall experience – better food, better service, better people. In the food business, you don’t want to be damn good. You want to be the best. For example, we are improving our french fries. They need to be crisper longer, retain texture longer, and improve in the quantity as well. It’s a work in progress. We’re still testing.

How can Friendly’s compete with the growing popularity of Pinkberry, Red Mango, and other frozen yogurt makers?

We need to get into the yogurt business and also the light sorbet business. We have a big R&D facility and are testing some products. We think that trend is here to stay.

What are the details on the new Friendly’s concept you’re working on?

We are still sorting out the [concept’s] name. We are renovating existing stores in Springfield. They will have better lighting and bigger booths. There will be new appetizers and healthier options. The ice cream fountain will be a big focus and very inviting. We’re also looking at waffles and ice cream and all sorts of things.

What is the most popular item at Friendly’s and has it changed over time?

It has not. The popular items are the same. The Fribble is a big seller. The mint chocolate chip is also a big seller. The number-one seller, astoundingly, is vanilla.

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