The iconic ice cream parlor chain Friendly's filed for bankruptcy this morning. As NPR's Tovia Smith reports, the company has been struggling in a down economy and changing marketplace.

TOVIA SMITH, BYLINE: Ever since two brothers opened the first Friendly's ice cream shop in Massachusetts 75 years ago, the company has been serving up as much family and feel-good as it has burgers and treats.

LISA LANE: My grandma would take me and my brother out and we would always get the watermelon slice. Ah, the watermelon slice.

SMITH: Fans like 23-year-old Lisa Lane helped Friendly's expand to more than 600 locations by the '80s. This week, at a Friendly's in Watertown, when rumors first started to swirl about a possible bankruptcy, it drew a visceral reaction.

MICHELE MEDERIOS: Oh, that's so sad. I love Friendly's.

SMITH: Forty-six-year-old Michele Mederios still takes her kids for the same Fribble milkshakes and clown-face ice cream cones she got as a kid.

MEDERIOS: It's, you know, a happy family memory, you know? It's a shame. I'd be sad to see them go. I don't know what would take the place of Friendly's.

SMITH: Industry experts say the ice-cream parlors - half of which are franchise-owned - have been hurt by the down economy, but also Friendly's may have crossed the line from classic oldie to obsolete.

CHRISTOPHER MULLER: Friendly's is an anachronism, really. It's a restaurant model that is no longer viable.

SMITH: Christopher Muller, dean of hospitality administration at Boston University, says it's hard for family coffee shops like Friendly's to offer waiter service and still compete with fast-food prices.

MULLER: It's really in a squeeze from both the top and the bottom, and it's really been a slow downward trend.

SMITH: Indeed, Friendly's, owned by a private equity firm since 2007, has consistently lagged behind competitors like Cracker Barrel and IHOP. A recent survey ranks it near last on value, atmosphere and service.

ABBY EMARA: Actually, my husband wanted to go there for ice cream the other night, and I said nah.

SMITH: Fifty-seven-year-old Abby Emara says she rarely goes to Friendly's anymore.

EMARA: They kind of look a little run-down. I mean, you kind of get like a sticky feeling when you go in there.

SMITH: While Friendly's officials were not available to comment by deadline, the company's new CEO, Harsha Agadi, has been working on changes, including a major retraining and renovation plan.

HARSHA AGADI: We are announcing the rebirth of the brand by starting to redo 17 restaurants in Albany. As of...

SMITH: Friendly's also recently launched several new concept Friendly's Express self-serve stores, and menus have been made more healthy and affordable.


UNIDENTIFIED WOMAN: Introducing Friendly's new High-5 menu - five of your favorites, each just five bucks. Just five bucks!

SMITH: But is it too little too late?

DENNIS LOMBARDI: We've watched over the years a number of restaurant chains kind of stub their toe, so to speak, and then recover.

SMITH: Consultant Dennis Lombardi says bankruptcy might be just what Friendly's needs to ditch its unprofitable stores and rebuild.

LOMBARDI: This is not, in my mind, about Friendly's disappearing. In fact, I think it's reasonably likely that you're going to see Friendly's a stronger brand five years from now.

SMITH: On its website, Friendly's chronicles its 75-year history of creating, quote, "family memories for generations." What's uncertain now is whether future generations will be creating memories there too. Tovia Smith, NPR News.

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