TGI Fridays has launched a refranchising initiative for most of its 247 company-owned U.S. locations.
Carrollton, Texas-based Fridays, which was purchased this past summer by two private-equity groups, said it is selling company restaurants to speed up the reimaging and growth of the global casual-dining brand.
“Potential and current franchisees will be offered the opportunity to purchase groups of restaurants in exchange for a commitment to an accelerated timetable for restaurant re-imaging and construction of new restaurants,” the company said, in a statement released late Friday.
Several casual-dining brands over the past several years have sold off company-owned units to franchisees.
In October 2012, Applebee’s Neighborhood Grill & Bar, a division of Glendale, Calif.-based DineEquity Inc., completed a refranchising program that left it with about 99 percent of its units operated by franchisees. As of June 30, Applebee’s owned only 23 of its 2,008 stores and franchised the remainder.
Chili’s Grill & Bar made a refranchising push in 2009. As of July 25, Dallas-based parent Brinker International Inc. owned and operated 838 Chili’s units in the United States and Canada and franchised 731 units.
Nick Shepherd, TGI Fridays president and chief executive said, in a statement last week, that his brand’s refranchising effort “is a natural step in the evolution” of the casual-dining concept. TGI Fridays was founded in 1965 in New York City.
“It’s important to note that we’re only franchising our corporate restaurants to owners with a proven track record of success and excellence, and who have a clear passion for our brand and our people,” Shepherd said.
Over the past two years, Fridays has been re-imaging existing restaurants, completing 93 units. The company said the reimaging has increased incremental guest traffic, sales and profits at each finished location.
Fridays said the refranchising program would allow the company to focus on brand innovation, marketing and brand execution.
The company said it has negotiated two 20-plus store refranchising deals over the past several months, one to an existing Fridays franchisee and the other to an experienced multi-store operator. Both transactions are expected to be completed over the next 60 days, the company said.
Fridays expects this refranchising program to be completed in 18 months, depending on the market and other variables.
The refranchising program comes after the July sale of TGI Fridays by Minneapolis-based Carlson -- which also owns more than 1,340 hotels, including the Radisson brand -- to Sentinel Capital Partners and TriArtisan Capital Partners in July for an estimated $800 million. Sentinel, the New York-based private equity firm and majority shareholder in TGI Fridays, also owns several restaurant franchisors, including Checkers Drive-In Restaurants, Huddle House and Newk’s Eatery.
TGI Fridays made news in July with the introduction of “Endless Appetizers” for $10 a person. On Sept. 24, the company added two new offerings to that promotion with the introduction of Sriracha Chicken Potato Skins and Spicy Chicken Tostadas and the addition of Ahi Tuna Crisps. Guests can choose any one appetizer from a list of starters and receive unlimited servings of that same appetizer during their visit.
In Nation’s Restaurant News’ most recent Top 100 census, estimated 2013 sales for domestic Fridays restaurants were nearly $1.8 billion at an estimated 527 U.S. units.
TGI Fridays was a pioneer in expanding its brand globally. The company said it has more than 900 restaurants in more than 60 nations. Total worldwide sales were $2.7 billion in 2013, the company said.
Contact Ron Ruggless at [email protected]
Follow him on Twitter: @RonRuggless
