Company-owned parlours had gone through a variety of changes between 1976 and 1985. During this time, however, guest counts at these parlours declined steadily. At the same time, however, there were still territorial franchises operating, removed from the internal turbulence which plagued the company parlours. How did they fare during this time?
Territorial franchise expansion had pretty much ended by 1975. This was due to both economic conditions and the fact that the smaller markets which franchisees held were reaching saturation. San Diego had 6 parlours operating, Minnesota had 5 parlours, Arizona had 5 parlours, and Hawaii had 7 parlours. A few single owner-operator parlours were also operating, in El Paso Texas, Eugene Oregon, and Vancouver British Columbia. In 1980, an additional franchised “parlour” was opened in the Royal Hawaiian Center in Honolulu. Called "Farrell's Fountain", this was actually a limited-menu ice cream shop rather than a full-service parlour.
A number of the company parlours had been re-franchised in 1978, mostly in the southeast and Rocky Mountain areas. These stores were franchised because of low sales, and for the most part, that didn't change. One notable exception was the parlour in North Little Rock, Arkansas. The franchisee did quite well with that parlour; so well, in fact, that in 1983 he opened a second parlour in Little Rock and bought the still-shuttered parlour in Oklahoma City. A year or so later, all three parlours were gone.
Some of the owner/operator parlours kept operating into the 1980's, but changed their restaurant name, thus leaving Farrell's. This was mostly due to the fact that the franchise fees were too much for the corporate support which they were receiving.
The Minnesota franchise began downsizing in the late 1970’s; the franchisee had sold two parlours to other franchisees in 1978 and took the Farrell's name off the remaining parlours. The new owners ran the two Farrell's parlours for 3-4 years, then shut them down. The remaining territories held their own for several years, although they were also suffering declining guest counts. By the early 1990’s, the Hawaii and Arizona franchises were mere memories, and San Diego was down to one parlour. This parlour finally closed in 2006. The parlour in Eugene, Oregon operated as a Farrell's until 1998, then changed its name to Pearl Street Ice Cream Parlour Restaurant.
The long-term pattern of guest declines did not vary substantially between franchisees and company-owned parlours. This suggests that the reason behind the decline was larger than concept changes or siting patterns. I think the overall narrow marketing focus was one of the biggest contributing factors to the declines. Farrell’s had for years promoted its birthday club. In most years, the entire marketing budget consisted of the cost of collecting and maintaining the birthday database and mailing cards to the enrollees. Farrell’s corporate did not have anything of substance in terms of television or radio advertising for company stores or franchises. Franchisees generally did not have budgets to support production and airing of commercials, so they typically did without.
Another common theme between company stores and franchises was fundamental value to the customer. The cost of most everything on the menu had increased faster than the inflation rate, while the quality of most items declined. So, more and more, people tended to go to Farrell's only for special occasions (read "the little one's birthday"). Guest traffic decreased, which affected the fun atmosphere of the parlours.
The atmosphere of a full parlour on Friday night was significantly different than it was on a slow Monday evening. People like the drum, bell, siren and the player piano. These items were used more during busy times; hence the perception that atmosphere was better during busy times. I had eaten at numerous parlours (company-owned and franchised), and often I did so without a single "event" occurring. For those who visited the parlour looking for fun, this would indeed be disappointing. Without the fun, Farrell's is just an average restaurant with average food and somewhat higher-than-average prices. In the mall, Farrell's couldn't compete with McD's or the food court; for free-standing parlours, the reputation as a "weekend" party place seemed to proliferate.
Unfortunately, this dichotomy of atmospheres would eat away at business as people who would visit a Farrell's during a slower Monday night would make a point not to go there on Mondays anymore. Over time, this pattern could erode customer traffic over most shifts, in some cases leaving only Friday and Saturday as the busy times. This seemed to hold true for all parlours, franchised or company-owned. Anyway, that's one theory...