Friendly Ice Cream Corporation to Increase Size of Board; Offers Shareholder Group Representation on the Board

  
    
  
  
    
      Friendly Ice Cream Corporation (AMEX: FRN) today announced that it 
      intends to increase the size of its Board of Directors from five to 
      seven members. The Board is considering a number of highly qualified 
      individuals with experience in the hospitality industry who they believe 
      can bring substantial value to the Company.
    
    
      The Board of Directors decided to offer one of the two additional seats 
      on the Board to a designee of the group of shareholders led by Sardar 
      Biglari (“Mr. Biglari”). 
      The board seat would provide Mr. Biglari with representation 
      approximately proportional to the group’s 
      ownership in the Company. The Board determined that while it desires to 
      add members with business expertise in areas in which the Company 
      operates, it is in the best interests of the shareholders to make Mr. 
      Biglari this offer to avoid a potentially contentious and expensive 
      proxy fight at a time when the Company is actively pursuing key 
      initiatives to improve shareholder value. In the event that Mr. Biglari 
      rejects the offer, the Board intends to fill both seats with highly 
      qualified candidates selected by the Board.
    
    
      “Friendly’s is 
      firmly committed to serving the interests of all our shareholders,” 
      said Donald N. Smith, Chairman of the Board, “and 
      further distractions to our management team and employees will not serve 
      those interests.” Smith added that “we 
      believe adding highly qualified individuals to our Board of Directors 
      with experience in the hospitality industry will assist us in further 
      pursuing and developing our key strategic initiatives and is in the best 
      interests of the Company. We also believe that it is important to listen 
      to our shareholders. Mr. Biglari, together with his group, control 
      approximately 14.9% of the Company’s 
      outstanding shares, and we are open to their participation on our Board 
      proportional to their ownership.”
    
    
      About Friendly Ice Cream Corporation
    
    
      Friendly Ice Cream Corporation is a vertically integrated restaurant 
      company serving signature sandwiches, entrees and ice cream desserts in 
      a friendly, family environment in over 520 company and franchised 
      restaurants throughout the Northeast. The Company also manufactures ice 
      cream, which is distributed through more than 4,500 supermarkets and 
      other retail locations. With a 71-year operating history, Friendly's 
      enjoys strong brand recognition and is currently remodeling its 
      restaurants and introducing new products to grow its customer base.
    
    
      Forward Looking Statements
    
    
      Statements contained in this release that are not historical facts 
      constitute "forward looking statements" as that term is defined in the 
      Private Securities Litigation Reform Act of 1995. These statements 
      include statements relating to the anticipated contributions of any new 
      members of the Board of Directors and the impact of the Company's key 
      strategic initiatives. All forward looking statements are subject to 
      risks and uncertainties which could cause results to differ materially 
      from those anticipated. These factors include risks and uncertainties 
      arising from accounting adjustments, the Company's highly competitive 
      business environment, exposure to fluctuating commodity prices, risks 
      associated with the foodservice industry, the ability to retain and 
      attract new employees and directors, including a replacement chief 
      executive officer, new or changing government regulations, the Company's 
      high geographic concentration in the Northeast and its attendant weather 
      patterns, conditions needed to meet restaurant re-imaging and new 
      opening targets, the Company's ability to continue to develop and 
      implement its franchising program, the Company's ability to service its 
      debt and other obligations, the Company's ability to meet ongoing 
      financial covenants contained in the Company's debt instruments, loan 
      agreements, leases and other long-term commitments, unforeseen costs and 
      expenses associated with litigation, and costs associated with improved 
      service and other similar initiatives. Other factors that may cause 
      actual results to differ from the forward looking statements contained 
      herein and that may affect the Company's prospects in general are 
      included in the Company's other filings with the Securities and Exchange 
      Commission. As a result the Company can provide no assurance that its 
      future results will not be materially different from those projected. 
      The Company expressly disclaims any obligation or undertaking to release 
      publicly any updates or revisions to any such forward looking statement 
      to reflect any change in its expectations or any change in events, 
      conditions or circumstances on which any such statement is based.