Friendly Ice Cream Inactive

We are a leading full-service, casual dining restaurant company and provider of premium ice cream products with locations primarily in the Northeast. As of December 31, 2006, we operated 316 full-service restaurants and franchised 198 full-service restaurants and seven non-traditional units, located in 16 states. We offer our customers a unique dining experience by serving a variety of high quality, reasonably priced breakfast, lunch and dinner items, as well as Friendly’s own signature premium ice cream desserts, in a fun and casual neighborhood setting. In addition to our restaurant operations, we manufacture and sell a complete line of packaged premium ice cream desserts distributed through more than 4,000 supermarkets and other retail locations in 12 states. Our fiscal year ends on the last Sunday in December, unless that day is earlier than December 27, in which case the fiscal year ends on the following Sunday. Fiscal years ended December 31, 2006 and January 1, 2006 contained 52 weeks, while fiscal year ended January 2, 2005 contained 53 weeks. For the year ended December 31, 2006, we generated $531.5 million in total revenues and earned income from continuing operations of $1.5 million. For the years ended December 31, 2006, January 1, 2006 and January 2, 2005, restaurant sales were approximately 75%, 75% and 78%, respectively, of our total revenues. As of December 31, 2006, January 1, 2006, and January 2, 2005, approximately 94%, 97% and 96%, respectively, of the Company-operated restaurants were located in the Northeast.