Among the restaurant brands that Brix Holdings is in the process of revamping is Friendly’s, a legacy brand that was founded in 1935 in Springfield, Massaachusetts.
Sherif Mityas knows he and his team at Brix Holdings have a lot of work to do to get their restaurant brands back on track for growth.
But that doesn’t stop the CEO of the Dallas-based platform company from getting excited about addressing challenges and development potentials.
In the case of Clean Juice, which Brix acquired in May, Mityas acknowledged the opportunity to “reignite a quality brand,” which has about 75 units after dealing with franchisee exits and closing dozens of locations in the past few years.
He said Friendly’s, which Brix’s affiliate company Amici Partners Group acquired out of bankruptcy in 2021, is undergoing “a revitalization of sorts” as Brix attempts to re-engage loyal patrons who grew up with the dine-in legacy brand. At the same time, it’s trying to woo the next generation of customers with a “fun new menu.”
Orange Leaf, which Brix also acquired in 2021, is “heading in the right direction,” said Mityas, after more than two dozen struggling company-owned stores closed in 2021 and 2022. He said there are now 65 locations of the frozen yogurt concept and five are set to open this year.
“We buy brands in distress and so, for the first year or two, there’s always going to be closures because we believe that to grow you have to shrink. You got to get rid of the brand damage locations and the ones that cause the brand to get into trouble,” said Mityas, whose company also owns Red Mango, Smoothie Factory + Kitchen, Souper Salad, Humble Donut Company and Pizza Jukebox.
Brix announced this week four deals bringing new Red Mango and Smoothie Factory locations to Arizona and Missouri for the first time.
Clean Juice, Friendly’s and Orange Leaf present unique challenges. But Mityas insisted Brix has the systems in place to grow all three brands again by reorganizing their marketing programs, improving store efficiencies and upgrading menus.
“We buy brands in distress and so, for the first year or two, there’s always going to be closures because we believe that to grow you have to shrink,” said Brix Holdings CEO Sherif Mityas.
Brix acquired Clean Juice at a time when the brand was on the receiving end of arbitration filings from franchisees who claimed the business model doesn’t work. Mityas said Clean Juice is ready for a restart.
“In the last two months alone, we’ve opened units in Chicago, Prosper, Texas, and in Eugene, Oregon, with another three to five slated to open this year,” Mityas said. “We’re still in process of integrating the brand into our system, so it’s going to take some more time before we see significant progress there, but we’re pleased with the direction we’re heading.”
Mityas said Brix is prioritizing improving the profitability of Clean Juice’s operators. The top half of the system’s franchisees reported an average unit volume of $706,896, while the bottom half reported $453,984 in 2022, according to the latest available franchise disclosure document.
“Before we bought Clean Juice, they went through a lot of store closures and turmoil given some of the issues they were having with previous ownership decisions,” he said. “But we are in the process of stabilizing that brand and driving better unit economics with a better distribution network.”
Mityas believes Brix has the potential to grow Clean Juice by 25 to 30 units a year with a focus on further developing its core markets of Texas, Florida and North Carolina, where the brand was founded by Landon and Kat Eckles. He looks forward to breaking into non-traditional markets with vending machines and kiosks in airports, college campuses and fitness centers.
Mityas said Brix is addressing the issues brought forth by former Clean Juice franchisees who filed grievances concerning store profitability and supply chain issues before leaving the system. A common complaint was the brand’s shift to selling bottled juices in stores, rather than fresh pressing in-house, which some franchisees say negatively impacted sales.
Brix Holdings is prioritizing improving the profitability of Clean Juice’s operators following its acqusition of the brand in May.
Mityas confirmed operators will continue selling prepressed juice bottles to help lower costs and improve in-store efficiencies.
Operator Jigar Patel, who opened his Clean Juice location in Frisco, Texas, in June, said he’s pleased with how Brix is working with operators to improve overall store performance.
“Before Brix took over the company, there were a lot of supply chain issues,” Patel said. “I can say honestly that we have not experienced that with Brix. They’ve made some real good decisions on improving the menu and keeping our costs down.”
Renewed development efforts at Friendly’s, meanwhile, need to be “more measured” because of the challenges of building large-scale casual dining restaurants in today’s tight real estate environment, Mityas said.
The chain began as Friendly Ice Cream in Springfield, Massachusetts, in 1935, and at one point there were more than 800 restaurants nationwide. There are now just over 100 locations, with the latest opening in Orlando, Florida, in June.
Friendly’s added 38 franchise locations in 2023, but in the same year closed 49 company-owned restaurants, according to its FDD.
“We’re looking at about five to eight restaurant openings per year with Florida and Texas included in those markets with so many transplants and snowbirds down there,” Mityas said.
Mityas said Brix’s refresh of Friendly’s includes updating restaurant booths and adding new lighting and color schemes inside restaurants. He also said they’re moving the signature ice cream selection from the back of stores to the front, where they’re getting prime visibility.
“The last eight to 10 years have been difficult waters for Friendly’s, no doubt about that. But we’re a legacy brand that’s been around for close to 100 years and I don’t know of any brand that hasn’t gone through difficult times,” said Amol Kohli, a longtime Friendly’s operator whose restaurant group owns 30-plus locations, including the brand’s newest location in Orlando.
“I think every operator I know agrees that Amici and Brix have been a breath of fresh air from the prior ownership groups,” Kohli said. “I am especially excited to see what Brix has done with the new redesigns and the menu innovations they’ve made.”
Mityas said he’s particularly encouraged by Orange Leaf’s progress. He said the frozen yogurt company posted double-digit revenue increases the past six quarters.
Orange Leaf had 99 units at the start of 2021 and finished last year with 61, according to its FDD. An analysis of its Item 19 puts the average unit volume between $350,000 and $380,000.
“Our operators of some of our brands are not making the money they need to make and we’re addressing that now,” Mityas said. “Our absolute focus is franchisee profitability.”