Over 2,500 jobs saved, but over a 1,000 jobs lost. TGI Friday mass closure reports suggest that despite the rescue deal, not all of the company’s restaurants will continue to remain functional. According to the data, TGI Fridays has seen 35 restaurant closures across the UK with the administration working with landlords to find a way to save the restaurants that were closed down.
TGI Fridays’ parent company Hostmore filed for administration last month due to piling debt that it no longer felt capable of handling. Of the multiple outlets under the TGI Fridays brand in the UK, 51 sites were saved by their sale to Breal Capital and Calveton, owners of restaurant group D&D London, but the rest were forced to shut down.
Image: TGI Friday
TGI Fridays Mass Closures Reports Leave Many Employees Unsure of Their Fate
Private equity groups Calveton and Breal Capital were able to save 51 outlets and nearly 2,400 jobs of the staff working at these outlets. As per BBC, the firms already own restaurant chains Byron Burgers and Vinoteca and restaurant group D&D London, and with the latest acquisition, they plan to “both modernize the business and capitalize on the heritage of this iconic brand.”
TGI Fridays’ private equity rescue came after the UK owner Hostmore appointed administrators Daniel Smith and Julian Heathcote of Teneo Financial Advisory Limited to try and save the American-inspired chain. Hostmore was forced to delist its ordinary shares after its shares crashed more than 90%. This chain of events was kickstarted when it announced its plans to put its restaurants up for sale on the market in hopes of saving the brand, after the dissolution of its plans for an all-share acquisition of the parent company in the US.
The company had set its sights on a reverse takeover of the parent company of TGI Fridays based in Dallas in the US, but the deal quickly fell through due to mismanagement of rights. The parent company, TGI Fridays, lost control of the rights to collect royalties from the restaurants, which was a key asset in this deal. Due to the company’s financial struggles, FTI Consulting took over the revenue stream, effectively blocking Hostmore from seeing any gains. This caused the merger to fall through and sealed the deal on TGI Fridays’ mass closures.
TGI Fridays’ Buyout Did Not Prevent Job Cuts
The TGI Fridays’ mass closures reports were accompanied by accounts of employees who found themselves suddenly locked out of their jobs, with no clarity on what was to happen next. While staff at the 51 restaurants that were bought out were able to proceed as normal, TGI Fridays’ 35 outlet closures went into effect immediately, with no warning to the 1,000 employees who were now left without a job.
Trade union Unite Hospitality was furious about the job losses that occurred due to TGI Fridays’ mismanagement. The union took to Twitter/X to explain that staff went in to work only to find themselves shut out from the sites with the padlocks to the restaurants changed to avoid giving them access. These staff members received zero notices about the change and were invited to participate in a Zoom call with the head office on short notice, with some of them reporting that they didn’t receive the invite.
The TGI Fridays buyout and resulting job cuts left the staff in the dark about when they could expect to receive their pay for the weeks worked or whether they could hope to see any compensation for the abrupt closure.
According to The Guardian, Bryan Simpson, Unite’s lead organizer for hospitality, provided a statement, “The way in which workers have been treated across TGI Fridays today is a national disgrace. To close venues and lock people out of their workplace with absolutely no notice is a moral outrage…We are currently supporting our TGI members through this incredibly anxious situation.”
Even if TGI Fridays’ mass closures were inevitable as the reports suggest, the poor handling of the situation and lack of communication with affected employees has left many disappointed. With its already failing popularity among customers, stories like this can leave a lasting impact on the brand’s reputation and should addressed as early as possible.
TGI Fridays’ tally of job losses could have been much higher so it is good that the buyout saved the majority of the outlets, however, Hostmore has left many questions unanswered for the workers who weren’t included in the handover.
