Friendly Ice Cream Corp. last month became the latest in a string of classic American restaurant chains to file for bankruptcy protection. Founded in 1935, the Massachusetts-based franchising firm abruptly closed more than 60 locations and now hopes to reinvent itself as a leaner, viable business by early December.

The road from private to public company started in 1978. The Hershey Foods Corp. offered $162 million, or $23 a share, for Friendly Ice Cream's 7.05 million outstanding shares in December 1978. Friendly's board of directors, including chairman Prestley Blake, unanimously agreed to recommend the Pennsylvania company's offer to shareholders.

But the company only started franchising in 1997, or thereabouts.

However, about 25% of the locations were closed by mid 2000, and "Prestley Blake became increasingly critical of Friendly's upper management. In December 2000, he bought 892,000 shares of Friendly's stock for close to $2.5 million, making him its largest shareholder with a 12 percent stake in the company."

Sun Capital bought Real Mex from Bruckmann Rosser in, I believe 2006, and then the chain basically went bankrupt. KKR provided financing to keep it going. Sun gained possession again. And now it has collapsed under Sun for the second time in five years.

Why did this happen?

Sun, immediately after buying the chain, separated its real estate, selling its headquarters and the land under 160 of its 512 restaurants for more than $40 million. Sun used the money to fund its buyout of Friendly's, so that it paid little money down in the leveraged buyout.

Friendly's restaurants started paying higher rent.

When filing for bankruptcy, Friendly's, without referencing how Sun split its assets, cited high rents as one of the problems.

Sun restaurant chain Real Mex in the last few weeks also filed for bankruptcy.

As in Friendly's, Sun put pressure on Real Mex by cheapening the product, for example, by putting less chicken in fajitas, a source said.

By starving its restaurants during a recession, Sun could not save enough costs to compensate for the traffic both Friendly's and Real Mex lost.