It is a classic American success story. Two brothers with a shared love of ice cream start a family business that grows into an iconic American brand: Friendly’s. The business booms through the 50s and 60s and then, in the late 1970s, the brothers Prestley and Curtis Blake sell the business to corporate giant Hershey’s and ride off into the sunset wealthy, successful, and closer than ever.
So if all of this really happened – and it did – why are the Blake brothers another example of co-founders torn apart by the family business? In this case, they are the rare instance where the rift occurred long after they ran the business together, and it is a story that is tragic as it is fascinating.
A Friendly Success
In 1935, the Blake brothers opened their first ice cream shop in Springfield Massachusetts called Friendly’s. They worked the shop together, choosing to save money by not hiring employees. Together they worked around the clock where one would make the ice cream overnight and in the morning, the other would man the shop.
The brothers also operated with contrasting business styles. Prestley in particular was known to be the frugal, conservative operator, while Curtis was very much the people person, a soft but critical skillset given Prestley’s reputation for being impersonal. Curtis described the contrast in a 2014 interview with the Boston Globe, “My mom used to say if Pres owned the business alone, he wouldn’t have any employees. If I owned the business alone, I would give it all away to the employees.”
Whatever the method, the Blake brothers ultimately turned a decent profit, which they invested back into the business. As a product of the Great Depression, Friendly’s largely operated without taking on any debt. Any expansion of the business would be done only if it could be funded with existing cash. This common sense, frugal approach was the cornerstone on which they built the Friendly’s empire, and by 1974, the chain had grown to 500 restaurants. Five years later, the Blake brothers retired and sold the family business to Hershey Foods for $164 million.
The Seven Years War
More than two decades after the sale, Prestley Blake was unhappy with the state of Friendly’s. He perceived poor management and general carelessness resulted in the employment of poorly trained staff working in less than stellar facilities. In short, Friendly’s was a far cry from what it used to be.
But most unforgivable was CEO Don Smith’s lavish spending, as evidenced by his using the company jet for personal trips. Smith was also known to own a larger stake in another restaurant chain, Perkins, and Prestley was certain Smith was favouring Perkins at the expense of Friendly’s.
For a man who spent his entire life building a frugal corporate entity, forgoing any perks or luxuries (the most he ever took as an annual salary and bonuses were $50,000), Prestley could not stand to see what he believed to be somebody living the high life on the company dime.
He filed a lawsuit on behalf of the shareholders alleging corporate malfeasance. Though the investigations did uncover some irregularities, there was nothing to bring anything substantial against Smith. But Prestley continued on and changed tactics, eventually becoming the company’s largest shareholder, and attempted to use that power to try to force a sale to an owner who would remove Don Smith as CEO.
At this point, the company turned to Prestley’s brother Curtis to try and intervene in Prestley’s crusade. When Curtis publically took the side of company management, the brothers were no longer on speaking terms. Curtis was known to have sent a letter to Prestley, writing, “Our company is now in a very precarious position. You alone are in the position to control its entire future.”
For his part, Prestley would not be dissuaded. He told the Boston Globe, “I’m sorry my brother isn’t with me on this, but I’m gonna have to keep going because I know I’m right. I’m going to keep going until I can’t go any further.”
Ultimately, Prestley did emerge victorious. He leveraged his shares to force the sale of the company to Sun Capital Partners, a private equity firm which hired John Maguire as chief executive. Prestley was reported to be quite pleased with the new direction the company undertook in the years that followed
But was this a pyrrhic victory? Was restoring the honour to his former business worth costing him his relationship with his brother? In a 2007 interview with the New York Times, Curtis said, “I’m very disappointed. He was my best friend for 85 years. It would’ve been nice if we ended up best friends for entire life.”
