Farrell's looks to restart growth

Owner outlines expansion plans for iconic ice cream chain

Hoping to strike a nostalgic chord among those who remember the “fabulous fun” of Farrell’s ice cream in its heyday, Parlour Enterprises Inc. is poised to launch a new era of growth for the once-nearly-defunct family-dining brand.

After wrapping up nearly seven years of legal battles over rights to the brand, Parlour Enterprises has emerged as the operator and franchisor of Farrell’s Ice Cream Parlour Restaurants in United States and around the globe, except in Hawaii and Asia.

Mike Fleming, the Laguna Niguel, Calif.-based group’s chief executive, said Parlour Enterprises expects to open two or three units in Southern California in 2011 and another three or four in 2012. A franchising program will likely begin in about a year.

Parlour Enterprises currently operates two Farrell’s locations, both in Southern California: Santa Clarita and Mission Viejo. Two more Farrell’s are operated in Hawaii by E Noa Corp., which holds the rights to the brand in Hawaii and Asia.

Paul Kramer, Parlour Enterprises president, said Farrell’s has had its struggles over the years, but the concept still has tremendous brand equity that can be translated to a new generation.

“We want to take Farrell’s and do what Volkswagen did for the Beetle, to make people say ‘Wow, it’s what I remember, but it’s for today,’” Kramer said.

Parlour Enterprises has the blessing of the chain’s founder, Robert “Bob” Farrell, who is a shareholder in the company and serves as a consultant and “celebrity” booster.

Farrell — now a motivational speaker known in the industry for his “Give ‘Em A Pickle” philosophy of focusing on the guest before profits — opened the first Farrell’s in Portland, Ore., in 1963 as a turn-of-the-century ice cream parlor with a player piano and boisterous servers in skimmer hats.

Though the concept offered burgers and sandwiches, it was known primarily for its giant old-fashioned ice-cream sundaes with names like the “Pig Trough” or “The Volcano.” One of the biggest, the “Zoo,” takes two servers to bring it to the table, while bells ring and sirens blare to attract all eyes to the table that ordered it.

Farrell grew the chain to 58 locations before he sold the concept to Marriott Corp. in 1971. Farrell continued to work with Marriott, which grew the ice cream concept to as many as 130 locations.

Marriott sold the rights to Farrell’s to a San Francisco investment group in 1985, not long after Farrell had left the chain to pursue other opportunities. The investment group, however, attempted to reshape Farrell’s into a diner concept, which didn’t work, Kramer said. The group filed for bankruptcy, and rights to the brand reverted back to Marriott, which eventually closed or sold almost all units. One franchisee remained open in San Diego.

Farrell went on to build the casual-dining Pacific Coast Restaurants, which later was bought by Seattle-based Restaurants Unlimited Inc.

Though only the one Farrell’s unit in San Diego remained open at the time, in 1996, the brand was purchased by The Kirin Group, based in Corona, Calif., which began franchising it again.

Parlour Enterprises signed a development agreement for the licensing rights to Southern California, opening its first unit in Santa Clarita with more on deck. However, Kirin Group officials cut off the agreement in 2003, saying Parlour Enterprises owed back attorneys' fees.

Parlour Enterprises sued and reportedly later won a $6.6 million verdict in its favor. In an appeal, Kirin Group got the judgment reduced significantly, but that company later filed for bankruptcy, turning the rights over to Parlour Enterprises.

Meanwhile, Kirin Group had sold the rights to Farrell’s in Hawaii to E Noa Corp., resulting in another legal tussle for Parlour Enterprises. That dispute was settled with the split of territory.

In November 2009, Parlour Enterprises opened its second location in Mission Viejo, and Kramer said the company is ready to ramp up growth.

Though the menu was built on the original recipes, Kramer said there have been some tweaks: The pizzas are more gourmet, and offerings include Southern California favorites like fish tacos and more salads, for example. The ice creams include low-fat and fat-free options.

The average ticket is about $14 per person, said Kramer, but he declined to give sales information.

Today, Farrell’s faces tough competition — from frozen-dessert players like Cold Stone Creamery and Pinkberry, to the sundae-heavy Friendly’s and Dairy Queen.

Farrell’s, however, has a fan base that appears eager to reclaim memories of the past. In only nine months on Facebook, the brand has close to 200,000 followers, Fleming said.

“You may not believe this but we sometimes have people cry when they first come in and experience it again,” Kramer said. “It takes people back to when they were a kid.”

Contact Lisa Jennings at [email protected]