Friendly’s Ice Cream is a private, family-owned, Massachusetts-based retail and

Question

Friendly’s Ice Cream is a private, family-owned, Massachusetts-based retail and manufacturing ice cream business founded in 1935. 27M gallons of its brand name ice cream are sold in 8,000 retail locations across the United States every year. It also owns a chain of 230 family-friendly restaurants on

the east coast. One of the key factors to Friendly’s success has been the company’s vertical integration. This means that Friendly’s has sole control over how its ice cream is made, distributed, sold, and even served.

In 2007, Friendly’s sold their restaurant chain for $337M to Sun Capital Partners, a global private equity firm. Sun Capital Partners operates these under its subsidiary, FIC Restaurants. Recently, Friendly’s

sold its retail and manufacturing business for $155M to Dean Foods, a publicly-traded food and beverage company based in Texas. Dean Foods acquired Friendly’s trademark and all intellectual property associated with its ice cream.

Where do you think complications will arise as Friendly’s Ice Cream moves from vertically integrated to two separate businesses, neither of which are owned by the founding company? What limitations will this place on manufacturing, retail, and restaurant operations?

Explanation / Answer

expected problems that can arise are as follows:

Limitations will come in terms of :

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