Friendly's Owner Unveils Dynamic Formula for Growth

A multi-platform operator is injecting life—and growth—back into a category icon.

March 8, 2023 Ben Coley

Brix Holdings, which includes 85-year-old Friendly’s and a host of fast-casual concepts, has a straightforward focus for 2023. CEO Sherif Mityas boils it down to one word—growth.

The chief executive feels there are meaningful opportunities to extend dayparts and the number of occasions guests use the brands for.

“We’re going to be putting the accelerator down on generating new development, generating both traditional development in the full-service restaurant space and also in fast casual and potentially nontraditional locations like airports,” says Mityas, who was promoted from president to CEO late last year.

Friendly’s latest chapter began in January 2021 when Brix Holdings acquired it out of bankruptcy for $2 million. Under new leadership, same-store sales increased by double digits year-over-year. This past year—which saw the introduction of a new marketing campaign and menu innovation—witnessed single-digit lifts over 2021.

Throughout this transformation process, Brix learned if it injects relevancy into Friendly’s, customers will give credit for it, especially if there’s consistency. Mityas continuously hears anecdotes from guests about a favorite childhood memory. As adults, these customers are eager to return with their children, and by refreshing the look, service model, and team members, consumers are giving Friendly’s a chance again. Not only is the chain seeing expanding sales, but also positive frequency.

There’s no better example of this than the chain’s first fast-casual restaurant, which opened February 2022 in Westfield, Massachusetts. Mityas says the format was an experiment in every sense of the word. Brix wasn’t sure how it would perform or if it would resonate with customers. So it was very much welcomed news when Friendly’s discovered that new, younger consumers who value convenience and speed were responding well to the new store.

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The innovation doesn’t stop there, either. The legacy chain, with roughly 130 restaurants mainly in the Northeast, has tested drive-thrus in a casual-dining environment. The restaurant believes it could work since 30 percent of sales come from ice cream, an item that can be made swiftly.

“So adding drive-thrus to our restaurants, you’ll see a bigger push for us next year as well to be able to again extend who we attract, extend when we can attract those guests, not just in the core daypart breakfast, lunch, and dinner, but the in-between daypart hours, especially late-night when we have drive-thru and people want to pick up an ice cream, sundae, or cone,” Mityas says. “And that’s been very a real big benefit in terms of things that we’ve been testing and what we will continue to push for next year.”

As for the sister concepts—Red Mango, Orange Leaf, Smoothie Factory, Souper Salad, Humble Donuts, and Greenz—the single-minded mission to grow remains the same. Fifteen to 20 locations are expected to open in 2023 among these chains. This includes the elimination of Smoothie Factory as a brand and transitioning to Smoothie Factory + Kitchen—signaling to guests that it intends to put just as much emphasis on its food menu. This means more attention toward toast wraps, salads, and flatbreads. The first is a franchised unit in North Richland Hills, Texas, and more are to come throughout the year.

In addition to this reimagination, Smoothie Factory has been used as a virtual brand in Friendly’s kitchens, a move that’s added AUV without increased labor. Mityas says the combination works well since the two concepts already share many ingredients. The CEO notes that several franchisees are on board, and more virtual brand locations will pop up this year. Brix also plans to partner with a group that will package Smoothie Factory as a ghost concept in restaurants outside of Friendly’s, similar to Wow Bao.

“Talking to [Wow Bao CEO Geoff Alexander] and taking a page out of his playbook, it’s how do we extend Smoothie Factory, for instance, into other restaurants outside of our chain as well,” Mityas says. “So you’re going to see us do a lot more of that next year. You’re going to see us not only continue to do virtual brands of ours and others but also extend our brands as virtual brands into other restaurants.”

Brix Holdings

Meanwhile, Orange Leaf is looking to lean into its identity as the “Willy Wonka of frozen yogurt,” Mityas says. The chain is introducing new flavors and toppings around an updated store design. Typically, customers get their frozen yogurt from the machine and walk down a path to the toppings bar and check out. With the new prototype, the toppings bar is not in line, but a separate section beside the yogurt machines. The redesign is meant to encourage fun and creativity, including clear cups so guests can show off their unique mixtures on social media. Orange Leaf has tested the format in corporate stores and has seen success. The hope is to continue that momentum in new franchisee prototypes in Omaha, Nebraska. More should open in the next 12–24 months.

Mityas describes Red Mango as a frozen yogurt concept for adults—a meal replacement and an opportunity to eat healthier. So similar to Smoothie Factory, the brand is transitioning to Red Mango Cafe to showcase a better variety, like more food options and boba tea.

“We have some phenomenal Red Mangoes out there,” Mityas says. “Everywhere from airports and college campuses and standalone centers across the country, and our franchisees are telling us we need more. People want to come in more often than just for their frozen yogurt.”

Red Mango will also serve as a cobrand with an upcoming automated concept, Pizza Jukebox. Mityas envisions these locations being inside grocery stores—something that resembles how Subway and McDonald’s fit into Walmart. The pizza brand is part theater and part food. The idea is to have consumers watch the robot put toppings on the pizza and move it into the oven. The whole process takes three minutes and happens without a human hand.

“The experience is going to be as neat for consumers as the food,” Mityas says. “So it’s obviously very visual. There’ll be very clear glass and the ability to see everything working in the design. And so more to come on that, but we’re very excited about it. Very excited about launching a new brand like that, especially in a very heavy tech way. It’s always fun to introduce and debut a new brand and see what the customer reaction will be and see if we can grow this.”

To Mityas, growth involves organic development and M&A. One of his major objectives has been to expand Brix’s portfolio, which shouldn’t be difficult since the company has shared services that allow for new acquisitions to fit in easily.

To be more exact, he is looking for at least two to three concepts in the next 12–18 months. The company has already explored several options and cuisines that would best mesh with the current collection of brands.

“There’s daypart and occasion opportunities and there’s geographic expansion opportunities, especially with some of these smaller, faster-growing brands out there that we believe we can help energize and kick start their growth in a franchisee/franchisor model, and that’s really what we’re going to be all about,” Mityas says.