TGI Fridays Bankruptcy | TGI Fridays files for bankruptcy protection, looking for ways to ‘ensure long-term viability’

DALLAS, TX — TGI Fridays Inc., the American casual dining restaurant chain, filed for Chapter 11 bankruptcy protection on Saturday.

The company said in a statement that fallout from the Covid-19 pandemic has been “the primary driver of our financial challenges” and will use the Chapter 11 process to “explore strategic alternatives to ensure the long-term viability of the brand.”

“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our national and international franchisees and our pricing team members around the world,” Rohit Manocha, executive chairman of TGI Fridays, said in a statement. – a statement.

The bankruptcy affects the parent company of TGI Fridays, which operates 39 restaurants, and not the franchisees who control the remaining locations. The company has secured financing so all restaurants will operate as usual while they navigate the bankruptcy process.

TGI Fridays “stopped the clock on this month’s rent payments to landlords and other vendors, giving them room to restructure,” Debtwire chief John Bringardner told CNN. He added that the parent company “will likely have to close or sell unprofitable locations as part of the restructuring.”

TGI Fridays began in 1965 in Manhattan as a hangout for singles and was one of the first major chains to popularize the “happy hour” concept. The menu features a wide variety of American staples, including chicken wings, potato skins and hamburgers.

The restaurants are instantly recognizable for their kitschy interiors with Tiffany-style lamps and large red booths, plus a large bar that is usually the focal point of a TGI Fridays. In addition, its service personnel wore “flars” or pins and other decorative pieces on their uniforms, which became a running joke in the 1999 film “Office Space”.

TGI Fridays never fully recovered from the pandemic, which shut down indoor dining at restaurants for several months. That, plus inflationary pressure on its middle-class customers, has created a financial mess for the nearly six-decade-old chain.

In January 2024, TGI Fridays abruptly closed dozens of locations across the United States and has continued to quietly close restaurants. Last week, it closed 50 locations, bringing its backlog to 163. Before this wave of closings this year, TGI Fridays had about 270 locations in the US.

TGI Fridays is privately held by TriArtisan Capital Advisors, a private equity firm, so financial results are not published. However, the company said last year that total sales are expected to reach $1.6 billion in 2022, with US same-store sales up 8% from 2019.

It also changed its menu to keep up with its rivals, particularly Applebee’s and Chili’s, adding sushi, refreshing its cocktail menu and revamping its appetizer selection.

In September, TGI Fridays’ UK operations also experienced problems. A takeover bid by its UK franchisee failed and it went bankrupt. It is in the process of closing dozens of restaurants in the region and causing 1,000 job losses.

TGI Friday joins Red Lobster and the Buca di Beppo chains, both of which filed for Chapter 11 bankruptcy protection in recent months. However, the latter emerged from bankruptcy and tapped a PF Chang executive to turn the business around.