Friendly Ice Cream Corporation To Be Acquired by Sun Capital Partners

Friendly Ice Cream Corporation To Be Acquired by Sun Capital Partners for $15.50 per Share in Cash

Friendly Ice Cream Corporation (AMEX: FRN) today announced that it has entered into a definitive agreement under which it will be acquired by Freeze Operations Holding Corp, an affiliate of Sun Capital Partners, Inc., in an all-cash transaction for $15.50 per share for a total consideration of approximately $337.2 million. The transaction has no financing contingency. The purchase price represents an 8.2% premium over the closing price of Friendly’s common stock on June 15, 2007 and a 30.9% premium over the closing price on March 6, 2007, which was the day before the Company announced it was exploring strategic alternatives.

George Condos, President and Chief Executive Officer of Friendly’s, said, “We believe this transaction delivers very attractive value to our shareholders, and it does so more quickly and with greater certainty than other alternatives we examined. Every day our management team and employees work hard to provide the best dining experience for our guests. I am pleased to say that our new investors share this passion and we look forward to working closely with Sun Capital Partners on a smooth transition for our franchisees, customers and employees.”

Gary Talarico, Managing Director of Sun Capital Partners, said, “Friendly’s is an iconic brand name in the family restaurant sector and we are excited to add this great franchise to our portfolio of restaurant investments. We look forward to working with management to build on the legacy of this great brand and reinvigorate and expand the company within and beyond their historical markets.”

The transaction has been unanimously approved by the Company’s Board of Directors, which will recommend that Friendly’s shareholders approve the transaction. Certain Friendly’s shareholders including Donald N. Smith, Friendly’s Chairman of the Board, The Lion Fund L.P. and Biglari Capital Corp. and S. Prestley Blake, who collectively own in excess of 50% of the Company’s shares, have entered into an agreement to vote in favor of the transaction. The transaction requires the affirmative vote of 66 – 2/3% of the outstanding Company shares and is subject to certain other customary closing conditions. The transaction is expected to close during the third quarter of 2007. The exact timing of the closing of the transaction is dependent on the review and clearance of necessary filings with the Securities and Exchange Commission and other governmental authorities.

Goldman Sachs & Co. acted as the financial advisor to Friendly’s, and Weil, Gotshal & Manges LLP provided legal advice. Morgan, Lewis & Bockius LLP acted as legal counsel to Sun Capital.

ABOUT FRIENDLY’S

Friendly Ice Cream Corporation is a vertically integrated restaurant company serving signature sandwiches, entrees and ice cream desserts in a friendly, family environment in 515 company and franchised restaurants throughout the Northeast. The Company also manufactures ice cream, which is distributed through more than 4,000 supermarkets and other retail locations. With a 72-year operating history, Friendly’s enjoys strong brand recognition and is currently remodeling its restaurants and introducing new products to grow its customer base. Additional information on Friendly Ice Cream Corporation can be found on the Company’s website (http://www.friendlys.com/).