TGI Fridays files for bankruptcy, cites pandemic among financial challenges

Close-up of TGI Fridays sign on restaurant, Levittown, New York — Bruce Bennett/Getty Images

Not too happy hour

TGI Fridays, the cultural touchstone of American casual dining that has served customers bottomless mozzarella sticks and fries for more than half a century, filed for bankruptcy on Saturday, joining the ranks of other struggling chains such as Red Lobster.

The front exterior of a TGI Friday's restaurant in Bloomington, Minnesota with a wrap around garden on a sunny summer day — Ken Wolter/shutterstock

Why is filing for Chapter 11 on Friday

TGI Fridays Inc. — the owner and operator of 39 domestic restaurants — filed for Chapter 11 bankruptcy on Nov. 2 as a strategic move to address financial burdens caused by pandemic losses and an overstretched capital structure, the Dallas-based company said in a statement. In its filing with the U.S. Bankruptcy Court for the Northern District of Texas, the company reported assets and liabilities between $100 million and $500 million.

An image of the exterior of TGI Fridays. — Peter Fleming/istockphoto

The reason behind the file

“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 valued team members around the world,” said Rohit Manocha, Executive Chairman of TGI Fridays Inc. “The main driver of our financial challenges resulting from COVID-19 and our capital structure This restructuring will allow our advanced restaurants to continue with an optimized corporate infrastructure that allows them to reach their full potential.

TGI Fridays Appetizer Platter — TGI Friday

Which restaurants are affected?

The bankruptcy affects only the 39 locations owned by US TGI Fridays, leaving the bulk of the brand – more than 460 franchised locations in 41 countries – open and unaffected. These franchises are owned by 56 independent operators under TGI Fridays Franchisor, LLC, the entity that controls the brand’s intellectual property.

The original Friday Happy Hour

In 1965Alan Stillman opened the first TGI Fridays on 63rd Street and First Avenue in Manhattan with $5,000 of his own money and another $5,000 borrowed from his mother. With its kitschy decor, happy hour concept, and menu full of American comfort food favorites like chicken wings and burgers, Friday’s quickly became a full-on vibe, sparking a cultural shift in casual dining that would be spread nationally soon.

The TGI Fridays sign is mounted above the entrance to the restaurant located in the Art Deco district. — Roman Tiraspolsky/istockphoto

A downward spiral

TGI Friday quietly shrank, with dozens of locations closing in 2024 alone. Just last week, 50 more restaurants closed, bringing the number down in the U.S. to 163 from 270 at the start of the year. Despite menu changes and efforts to compete with rivals like Applebee’s and Chili’s, the brand struggled to keep up.

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This article was originally published on Cheapism