A struggling restaurant is now making more painful closures, resulting in the loss of approximately 100 more locations, sources confirm.
Ultimate Endless Shrimp did not lead Red Lobster to a Chapter 11 bankruptcy filing on its own.
Instead, it’s just one of many mistakes made by the company’s multiple management groups over the past 20-plus years, reports TheStreet.
“A Chapter 11 bankruptcy gives a company facing financial challenges a chance to negotiate with its creditors.
In Red Lobster’s case, the chain, which has already closed 93 locations, could end up closing over 100 more if its landlords won’t negotiate lower payments,” reports the outlet.
It’s possible that some of the chain’s landlords could be willing to make deals because the many recent retail closures could make it hard to find a new tenant.
In some markets, the landlords might be willing to take less because it could be an extended period of receiving no rent if Red Lobster closes in their location.
The company, in a new court filing, showed that 228 total restaurants cannot make money with their current lease situations.
With the 93 Red Lobsters already closed, that suggests that company could shutter an additional 135 restaurants.
Red Lobster Times Square location, a flagship for the chain, is one of the locations on the list and it’s in extreme danger of closing as its landlord wants to more than double its rent to $2.2 million, the New York Post reported.
Red Lobster does plan to survive its Chapter 11 bankruptcy.
“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.
The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests,” CEO Jonathan Tibus said in a press release.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
An unexpected restaurant now abruptly closes 7 locations in one state after revealing plans to shutter a total of 36.
TGI Fridays is closing a total of seven restaurants in one state as part of the company’s ongoing growth strategy.
This comes after the chain abruptly closed 36 locations across 12 states in at the beginning of the year, per The-Sun.
The restaurant chain will pull the plug on seven locations across the state of New Jersey in the coming weeks.
Today, Fridays will welcome in famished diners at its location in Brick for the final time.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Weldon Spangler, CEO of TGI Fridays earlier this week.
“We are at the helm of a pivotal moment that will allow us to explore boundless advancement, expansion, and innovation to keep delivering ‘That Fridays Feeling’ that our fans know and love.”
Before the closures, TGI Fridays had about 270 US locations, according to the company’s website.
“As part of the store closures, TGI Fridays is offering more than 1,000 transfer opportunities, which represents over 80% of total impacted employees,” the company previously said in a statement.
“Our top priority has always been delivering a superior experience for each and every TGI Fridays guest, and we’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet – and exceed – on that brand promise,” said Ray Risley, US president and chief operating officer, in the release.
Eight other locations were sold to former CEO Ray Blanchette, a longtime stakeholder who will acquire the previously corporate-owned restaurants.
The sale comes as major changes have been made to the brand’s leadership, including the news of Weldon Spangler being made CEO.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Spangler in a statement.
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