Friendly’s, a family-dining restaurant founded in 1935, filed bankruptcy for the second time in nine years Sunday to facilitate a roughly $2 million sale to Amici Partners Group LLC.

Amici is affiliated with BRIX Holdings, which has a restaurant portfolio that includes Red Mango, Smoothie Factory Juice Bar, Super Salad, RedBrick Pizza, and Greenz.

Chief Restructuring Officer Marc Pfefferle said in a court filing he has been advising Friendly’s for more than two years, and in that time, the brand has lost money and routinely borrowed under its credit facilities. To curb cash burn and restore profitability, the restaurant closed unprofitable units, reduced costs, delivered menu innovation—such as the recently revamped kids’ menu—and increased focus on off-premises dining. However, that progress was halted by COVID-19 in March, which resulted in a “dramatic decline” in revenue.

Before the pandemic, Friendly’s hired a firm to initiate a marketing process, including teasers sent to 40 potential strategic buyers and 76 potential financial buyers. That led to non-disclosure agreements for 11 strategic buyers and 22 financial buyers to learn more about the restaurant’s business. In January, five parties indicated interest.

The process was delayed because of COVID, but when it resumed, BRIX Holdings, which designated Amici as the purchaser, submitted a letter of intent to purchase the assets. The past several months were spent negotiating terms.

“The Purchaser and its affiliates bring a unique understanding of the Friendly’s Restaurants brand and the franchise aspect of the business,” Pfefferle said in court documents. “The Purchaser also has strong investment capabilities and access to the seasoned management team at BRIX Holdings, which oversees several successful restaurant concepts. In short, the Purchaser is uniquely postured to offer the superior support the Debtors’ franchisees and company-owned restaurants otherwise require to continue transforming the iconic Friendly’s Restaurants brand.”

Virtually all of the chain’s 130 stores systemwide are expected to stay open during the sales process. Pfefferle said that while the purchasing price isn’t substantial, the sale will allow the restaurant to save thousands of jobs across the footprint, protect franchisees, and reduce claims as Amici will assume numerous contracts and a majority of leases.

Friendly’s has also received a commitment from two secured lenders to waive, release, and discharge roughly $87.88 million worth of secured debt. Senior Lender Sun Ice Cream Finance II, LP, which is serving as a sponsor of the plan, is also advancing up to $7.5 million in cash before the waive, release, and discharge. Other entities are waiving and releasing more than $430,000 in claims, such as deferred rent and management fees.

But for this to occur, Pfefferle said a sales hearing must be held in mid-December. Because in early January, Friendly’s will begin incurring expenses in the millions to keep the business operating. Additionally, Amici doesn’t want the sale to close during the holiday period of December 25 to 27.

He noted that to mitigate the risk of Amici backing out of the process, Sun Ice Cream has committed to purchase the assets on the same terms. A combined hearing date of December 17 was proposed in the court documents.

“The only parties that could hypothetically benefit from a longer and significantly more costly process is the sole equity holder, the Plan Sponsor [Sun Ice Cream], and the second lien secured lender, each of whom has consented to the expedited timeline before the Court,” Pfefferle said. “In fact, they believe, and I agree, that a schedule that requires the Plan confirmation and Sale approval process to roll into January could further distress the business and will introduce execution risk with the Purchaser, which is the only third party still expressing interest in purchasing the business—still in the middle of an ongoing pandemic—and after a lengthy marketing process that began a year ago.”

Friendly’s, established in 1935, once had 850 units across 15 states roughly 30 years ago. There were 515 total locations when Sun Capital Partners bought the chain for $337.2 million in 2007. Four years later, the restaurant filed for bankruptcy, closing 100 unprofitable stores and clearing $297 million in debt.

About a year and a half ago, the brand had 173 restaurants, including 76 company-owned and 97 franchises. Now the restaurant has around 50 corporate units and roughly 80 franchises.

According to FoodserviceResults, Friendly’s generated $230 million in systemwide sales last year, an 8 percent drop from 2018’s $250 million.