TGI Fridays’ woes seem to be deepening after reports surfaced Monday that nearly 50 locations abruptly closed within the past week.
CNN reported that there are 164 restaurants open according to the chain’s store locator site, versus 213 that were open last week, marking a 49-unit retrenchment. Several local news reports have confirmed abrupt closures in their market, including in New Jersey, New York, Pennsylvania, Virginia, Ohio, Florida, Missouri, and California.
This adds to the list of closures from January, in which 36 underperforming TGI Fridays locations were shuttered.
According to Technomic data, TGI Fridays finished 2023 with 233 domestic locations, a more than 20% decline from 2022. Sales were at $702.2 million, an 18% decline year-over-year. By comparison, the chain finished 2019 with 384 locations and about $1.1 billion in sales. COVID accelerated TGI Fridays’ troubles – in 2020, there were 328 locations, marking a 56-unit retrenchment year-over-year, while sales fell to $661 million.
Notably, the 59-year-old, Dallas-based chain’s challenges have picked up in recent quarters. In April, the chain agreed to merge with Hostmore Plc., the United Kingdom-based franchisee, but that plan was called off last month. Hostmore filed for administration – the U.K. equivalent of filing for Chapter 11 bankruptcy – and put its nearly 90 stores up for sale as the company struggles with mounting debt.
Further, last year, the company went through three CEOs in the span of three months, with Weldon Spangler replacing Brandon Coleman III just two months after Coleman was hired and then abruptly resigned for personal reasons.
Despite the turmoil, the chain has made several efforts to ignite a turnaround. In 2022, it launched a small, to-go concept called Fridays on the Fly. It invested in virtual brands in partnership with C3, has targeted hotels for growth, revamped its bar program, and more. None of these actions, however, have gained much traction and Bloomberg reported earlier this month that the company is preparing to file for bankruptcy in the coming weeks.
Attempts to reach the company regarding its latest round of closures have not been returned to Nation’s Restaurant News.
Data sent to Nation's Restaurant News Monday afternoon from Creditsafe shows TGI Fridays' inconsistent record of on-time payments to suppliers. Creditsafe data shows that the chain has struggled to pay its bills on time for the last 12 months, while some months, including July, more than 50% of its outstanding bills fell into the "excessively late" category (91-plus days delinquent). In October, more than 94% of TGI Fridays' outstanding bills were categorized as being 1-to-30 days past due.
Creditsafe notes that TGI Fridays' creditworthiness (or lack of) could impact its ability to find financing.
Editor's note: This story was updated to provide data from Creditsafe.
Contact Alicia Kelso at [email protected]
