TGI Fridays filed for Chapter 11 bankruptcy on November 3, 2024, joining other restaurant chains like Red Lobster and Buca di Beppo that have done the same this year. The financial strain from the COVID-19 pandemic, inflation, and rising labor costs have continued to impact the restaurant industry.
In a statement released on November 2, 2024, the restaurant chain attributed its financial struggles primarily to the lasting effects of the COVID-19 pandemic as it used the Chapter 11 process to explore strategic options to secure the brand’s long-term stability. The statement read,
“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.”
It continued,
“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 bankruptcy impacted TGI Fridays' parent company, which runs 39 locations, while franchise-owned locations remain unaffected. Financing has been secured to keep all restaurants operational during the bankruptcy process.
Founded in 1965 in Manhattan as a social hub, TGI Fridays became known for its “happy hour” concept. The restaurant chain serves American comfort food classics like chicken wings, potato skins, and burgers. The restaurant chain became known for its quirky interiors, which feature Tiffany-style lamps, big red booths, and a central bar.
TGI Fridays closed many outlets in January 2024
In January 2024, TGI Fridays closed dozens of locations and continued with more, recently shutting down 50 sites, leaving 163 in the U.S. Owned by TriArtisan Capital Advisors. TGI Fridays introduced menu updates like sushi and new cocktails to stay competitive. Its UK operations faced setbacks, entering bankruptcy and beginning restaurant closures with significant job cuts.
Franchisor, LLC licensed the brand to 56 franchisees across 41 countries. These independently-owned franchise locations, both in the U.S. and internationally, were unaffected by the Chapter 11 filing for TGI Fridays Inc. and continued normal operations.
Franchisor, LLC secured a Transition Services Agreement and interim funding to support franchises through this period, maintaining service continuity while they planned a new, sustainable support model for the future.
According to a CNN report, the restaurant chain struggled to recover from the pandemic. Moreover, the company paused payments on this month’s rent, allowing time for restructuring, with potential closures or sales of unprofitable locations likely.
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In September 2024, TGI Fridays faced significant financial setbacks after missing a critical document deadline for bondholders, leading to the loss of most of its assets. Shortly after, UK operator Hostmore withdrew its acquisition plans, shutting down 35 restaurants and filing for bankruptcy.
Financial struggles had already impacted the chain, as 215 locations remain, a notable decline from the 386 operational restaurants recorded in May 2020. Many restaurants have responded by closing underperforming locations to stabilize cash flow—Applebee’s and Denny’s planned closures to reduce costs amid challenging economic conditions.
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