Dallas-based restaurant chain TGI Fridays filed for Chapter 11 bankruptcy protection on Saturday (Nov. 2), citing COVID-19 and capital structure as main factors. In its filing with a Texas federal court, the company listed both assets and liabilities in the range of $100m to $500m.
The TGI Fridays brand and related intellectual property are owned by TGI Fridays Franchisor, LLC as a result of a securitization agreement with a separate investor group. These entities are not included in the Chapter 11 process.
TGI Fridays Franchisor, LLC has franchised the brand to 56 franchisees in 41 countries. All of these franchise locations, both domestic and international, are independently owned and therefore not included in TGI Fridays Inc.’s Chapter 11 process, the company said.
Months earlier, a £177m agreement for TGI Fridays Inc to be sold to its UK operator Hostmore had collapsed.
“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,” said Rohit Manocha, Executive Chairman of TGI Fridays Inc. “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.”
The filing comes amid broader challenges facing the restaurant industry, including changing consumer preferences, increased competition from food delivery services and inflationary pressures.
The once-popular chain already closed 50 locations last week. It now counts 163 restaurants in the US and more than 461 in 41 countries. Founded in 1965 as a New York City bar on Manhattan’s Upper East Side, the popularity of TGI Fridays peaked in 2008 with 601 restaurants in the US and $2 billion worth of business, according to the Associated Press. Its sales in the U.S. were $728 million in 2023, down 15% from the prior year.
TGI Fridays is known for its decor bedecked with red stripes and Tiffany-style lamps. The chain serves bistro-style American food such as burgers, ribs, and loaded nachos.
TGI Fridays
Founded: 1965 Founders: Alan Stillman and Daniel R. Scoggin Headquarters: Dallas, TX Restaurant units (US): 163 Restaurant units (world): 461 U.S. sales: $728 million (2023)
