TGI Fridays Files for Bankruptcy Protection, Cites COVID-19 as Driving Factor
Chapter 11 Filing in Texas Federal Court
Restaurant chain TGI Fridays filed for bankruptcy protection on Saturday, seeking ways to “ensure the long-term viability” of the casual dining brand after closing many of its branches this year. The Dallas-based company filed for Chapter 11 bankruptcy protection in a Texas federal court.
CEO Blames COVID-19 and Capital Structure for Financial Challenges
TGI Fridays Executive Chairman Rohit Manocha stated that the “primary driver of our financial challenges resulted from COVID-19 and our capital structure.” Sit-down chain restaurants have faced significant challenges in recent years as diners increasingly opt for delivery or upscale fast-food chains like Chipotle and Shake Shack.
Reorganization Plan
A U.S. bankruptcy judge approved a reorganization plan for seafood chain Red Lobster in September after years of mounting losses and dwindling customers. Founded in 1965, TGI Fridays’ popularity peaked in 2008 with 601 restaurants in the U.S. and a $2 billion business, according to Kevin Schimpf, director of industry research at Technomic. Its sales in the U.S. were $728 million in 2023, down 15% from the prior year.
Rapid Decline in Restaurants
It now counts 163 restaurants in the U.S., down from 269 last year. TGI Fridays closed 36 restaurants in January and dozens more in the past week. The company owns and operates only 39 restaurants in the U.S., a fraction of the 461 TGI Friday-branded restaurants around the world. A separate entity, TGI Fridays Franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries, which remain open.
Conclusion
TGI Fridays’ bankruptcy filing is a significant blow to the casual dining industry, which has been struggling to adapt to changing consumer preferences. The company’s decision to file for Chapter 11 protection is a strategic move to restructure its debt and reorganize its operations. While the road ahead will be challenging, TGI Fridays has a rich history and a loyal customer base, which may help it recover and thrive in the long run.
FAQs
* What is the reason for TGI Fridays’ bankruptcy filing?
* The company cites COVID-19 and its capital structure as the primary drivers of its financial challenges.
* How many TGI Fridays restaurants are currently operating in the U.S.?
* The company owns and operates 39 restaurants in the U.S., down from 269 last year.
* How many TGI Friday-branded restaurants are there around the world?
* There are 461 TGI Friday-branded restaurants around the world, with a separate entity, TGI Fridays Franchisor, owning the intellectual property and franchising the brand to 56 independent owners in 41 countries.
