Friendly's files for bankruptcy and puts itself up for sale

New York(CNN Business) Friendly's, the East Coast diner chain best known for its "Fribble" milkshakes and sandwiches, has filed for bankruptcy for the second time in less than a decade. The 85-year-old restaurant is the latest to file for Chapter 11 during the pandemic.

The company announced late Sunday that it would "sell substantially all of its assets" to a private hedge fund company that owns other quick-service restaurants, including Red Mango and Souper Salad.

Friendly's said "nearly all" of its 130 locations, which are predominantly on the US east coast, will remain open and the deal will preserve thousands of jobs.

Similar to its peers, the company bluntly blamed the pandemic for the Chapter 11 filing.

"Unfortunately, like many restaurant businesses, our progress was suddenly interrupted by the catastrophic impact of Covid-19, which caused a decline in revenue as dine-in operations ceased for months and re-opened with limited capacity," said CEO George Michel.

He added that the deal with help it rebound as a "stronger business, with the leadership and resources needed to continue to invest in the business and serve loyal patrons."

Friendly's said it has sufficient cash on hand to continue its operations and pay employees. A court hearing is scheduled for next month to approve the transaction. It previously filed for bankruptcy in 2011 when it had more than 400 restaurants.

Restrictions on indoor dining and the tough economics on making money from delivery or take out have forced a number of chains to file for bankruptcy, including Ruby Tuesday's, Sizzler USA, California Pizza Kitchen, Chuck E. Cheese and NPC International.