TGI Fridays Files for Bankruptcy Amid Financial Struggles Post-Pandemic
The iconic American dining chain TGI Fridays has filed for Chapter 11 bankruptcy protection, citing lasting impacts from the Covid-19 pandemic as a significant factor in its financial troubles. The move aims to stabilize the business and explore future options to preserve the brand, which has been a staple in casual dining since its inception nearly 60 years ago.
In a company statement, Executive Chairman Rohit Manocha explained the difficult decision as a necessary step to safeguard stakeholders, franchisees, and employees worldwide. TGI Fridays, which operates 39 company-owned locations, assured that its franchise partners controlling other locations remain unaffected by the bankruptcy. Financial backing has been secured, allowing restaurants to continue serving customers during restructuring.
The Chapter 11 filing provides TGI Fridays with temporary relief from rent payments and other financial obligations, granting time to assess restructuring opportunities. Industry experts, like John Bringardner from Debtwire, suggest the chain may need to shutter or sell underperforming stores to remain viable.
TGI Fridays, which began in 1965 in Manhattan, helped popularize “happy hour” and became known for its unique decor and lively ambiance. However, pandemic-related challenges, inflation, and changing dining preferences took a toll on the brand. Following rounds of closures, TGI Fridays now has 163 locations in the U.S., down from 270.
While privately owned by TriArtisan Capital Advisors, TGI Fridays projected $1.6 billion in sales last year and saw an 8% growth in U.S. same-store sales since 2019. The brand has attempted to stay competitive by expanding its menu with new items and updating its cocktail and appetizer offerings.
The bankruptcy filing follows similar challenges faced by Red Lobster and Buca di Beppo, underscoring the difficulties facing the casual dining industry in a post-pandemic landscape.
