TGI Fridays filed for Chapter 11 bankruptcy early on Saturday morning just days after shuttering nearly 50 restaurants.
Added to the list of closures in January, when the struggling casual-dining chain closed another 36 underperforming restaurants, TGI Fridays now has 39 domestic company-owned restaurants remaining, in addition to franchised stores owned by 56 franchisees globally, down from 233 restaurants at the end of 2023, according to Technomic data.
According to the bankruptcy filing in the Northern District of Texas, the remaining restaurants will remain open during this time of restructuring, and TGI Fridays will use this time to “explore strategic alternatives in order to ensure the long-term viability of the brand.” The TGI Fridays brand and intellectual property are owned by a separate investor group and are not part of the Chapter 11 process. The franchisee-owned restaurants are also not a part of the bankruptcy filing.
"The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world," Rohit Manocha, Executive Chairman of TGI Fridays Inc. said in a statement. "The primary driver of our financial challenges resulted from COVID-19 and our capital structure. This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential."
TGI Fridays has experienced many challenges in the years since the COVID-19 pandemic, including going through three CEOs last year over the course of just a few months, with leadership bouncing from Ray Blanchette to Brandon Coleman III, and then to Weldon Spangler, after Coleman abruptly resigned just two months after he was hired.
Over the past couple of years, TGI Fridays had tried to revitalize its brand through a partnership with C3’s virtual brands (which got sushi on the menu at TGI Fridays for the first time) and revamping its bar program to lean more into its singles bar roots.
Last month, the company’s U.K.-based master franchisee, Hostmore, filed for administration (The U.K. equivalent of bankruptcy) and put its 87 stores up for sale after its reverse takeover plan of the entire TGI Fridays system failed. The all-share merger would have combined the U.K. franchisee with its U.S.-based parent company in a $220 million USD deal. Since then, rumors had been mounting about an imminent bankruptcy filing for TGI Fridays.
TGI Fridays is one of many restaurant chains that have filed for bankruptcy in 2024, including Red Lobster (which has since exited bankruptcy), BurgerFi, World of Beer Bar & Kitchen, Sticky’s , Buca di Beppo, Hawkers Asian Street Food, Tender Greens, Dickey’s Barbecue, and Rōti Modern Mediterranean.
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