TGI Fridays files for Chapter 11 bankruptcy

The American casual dining chain TGI Fridays Inc. declared bankruptcy on Saturday under Chapter 11.

The corporation reported assets and liabilities between $100 million and $500 million in a filing with the U.S. bankruptcy court for the Northern District of Texas.

In a statement, the business stated that the "primary driver of our financial challenges" was the impact from the Covid-19 outbreak and that it would "explore strategic alternatives in order to ensure the long-term viability of the brand" through the Chapter 11 procedure.

“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,” Rohit Manocha, TGI Fridays’ executive chairman, said in a statement.

The parent business of TGI Fridays, which runs 39 restaurants, is impacted by the bankruptcy; the franchisees that run the remaining sites are unaffected. All restaurants will continue to run normally as the company works through the bankruptcy procedure because it has obtained financing.

One of the first large businesses to popularize the "happy hour" notion was TGI Fridays, which began as a venue for singles to congregate in Manhattan in 1965. The menu offers a variety of American comfort food favorites, such as hamburgers, chicken wings, and potato skins.

The director of industry research at Technomic, Kevin Schimpf, claims that TGI Fridays' popularity peaked in 2008 with 601 locations across the United States and a $2 billion enterprise. According to Technomic, its U.S. sales in 2023 were $728 million, a 15% decrease from the previous year.

There are now 163 eateries in the US, compared to 269 the previous year. In January, it closed 36, and in the last week, it has closed dozens more.

Since TriArtisan Capital Advisors, a private equity firm, owns TGI Fridays, financial results are not made public. Nonetheless, the business stated last year that same-store US sales were expected to increase by 8% over 2019 to reach $1.6 billion in 2022.

The UK operations of TGI Fridays also encountered difficulties in September. It went bankrupt when a planned takeover by its UK franchisee fell through. It is currently inflicting 1,000 job losses and closing hundreds of establishments in the area.