TGI Fridays, an American casual dining chain, said on Saturday that it has filed for Chapter 11 bankruptcy protection. TGI Fridays filed for bankruptcy as it was grappling with prolonged financial issues and a collapsed deal with UK-based Hostmore. Casual restaurant chain TGI Friday’s Inc. has been having financial issues and has been struggling to turn around business. TGI Fridays is pressured by increasingly cost conscious consumers who’ve either become more selective when dining out or prefer competitors that provide faster food.
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In a filing with the U.S. bankruptcy court for the Northern District of Texas, TGI Fridays listed both assets and liabilities in the range of $100 million to $500 million.
TGI Fridays financial issues
Privately owned by TriArtisan Capital Advisors, TGI Fridays has been a beloved dining destination since its inaugural bar opened in Manhattan, New York, over five decades ago, in 1965.
TGI Fridays, owner and operator of 39 domestic “Thank God it’s Friday!” restaurants, said it maintains operations across its corporate-owned ‘happy hour’ dining places in the U.S.. Adding that it has secured a financing commitment to support operations.
TGI Fridays restructuring
Rohit Manocha, executive chairman of TGI Fridays, said: “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.”
In September, British restaurant operator Hostmore dropped plans to buy TGI Fridays. This was after it was removed as the manager of TGIF Funding, which owns the right to collect royalties from the restaurant chain franchise.
Franchise not affected by TGI Fridays bankruptcy
Hostmore, which operated TGI Fridays in Britain through its unit Thursdays (UK), saw its shares crash 90% after the news. It later announced its intention to enter administration, overwhelmed by debt.
TGI Fridays Franchisor, which owns the brand and intellectual property, has franchised TGI Fridays to 56 franchisees in 41 countries. The restaurant operator said those stores are independently owned and are not part of the Chapter 11 process.
TGI Fridays closures effect on jobs
The administrators of Thursdays (UK) in October said 35 TGI Fridays restaurants in the country have been closed. This closure has lead to 1,012 job losses.
After the bankruptcy announcement on Saturday, the Dallas-based chain TGI Fridays said normal operations will continue in all of the franchise locations both in the U.S. and internationally.
