TGI Fridays bankruptcy | TGI Fridays files for bankruptcy protection, seeking ways to "ensure long-term sustainability"

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

company he said in a statement It said the effects of the Covid-19 pandemic were “the main driver of our financial difficulties” and that they would 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 best protect the interests of our stakeholders, including our domestic and international dealers and valued team members around the world,” Rohit Manocha, chairman of the board of directors of TGI Fridays, said in a statement. he said.

The bankruptcy affects TGI Fridays’ parent company, which operates 39 restaurants, not the franchisees who control the remaining locations. The company has provided financing for all restaurants to operate as usual while the bankruptcy process continues.

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

TGI Fridays began in Manhattan in 1965 as a place for singles to meet each other and was one of the first major chains to popularize the “happy hour” concept. The menu features a wide variety of American comfort food items, including chicken wings, potato skins, and burgers.

Diners instantly recognize the kitsch interior, which features Tiffany-style lamps and large red booths, as well as a large bar that is often the focal point of TGI Fridays. Additionally, service personnel wore “special flair” or pins and other decorative items on their uniforms, which became a joke in the 1999 movie “Office Space.”

TGI Fridays never fully recovered from the pandemic, which shut down indoor dining at restaurants for several months. In addition, inflation pressures on middle-class customers have created financial turmoil for the nearly six-decade-old chain.

In January 2024, TGI Fridays abruptly closed dozens of locations across the United States and continued to quietly close restaurants. Last week, it closed 50 locations, reducing the number to 163. Before this year’s wave of closures, TGI Fridays had approximately 270 locations in the United States.

TGI Fridays is owned by TriArtisan Capital Advisors, a private equity firm, so financial results are not disclosed. But the company said last year that total sales were forecast to reach $1.6 billion in 2022, with same-store U.S. sales up 8% from 2019.

It also changed its menu by adding sushi, revamping its cocktail menu and rearranging its appetizer selection to keep up with competitors, primarily Applebee’s and Chili’s.

In September, TGI Fridays’ operations in the UK also encountered problems. A proposed buyout by the UK franchisee failed and it went bankrupt. Dozens of restaurants in the region will close and 1,000 people will lose their jobs.

TGI Fridays merge Red Lobster and Buca di Beppo chains, both filed for Chapter 11 bankruptcy protection in recent months. However, the latter emerged from bankruptcy and approached PF Chang’s manager to turn the business around.

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