TGI Fridays has now filed for bankruptcy protection after closing several branches nationwide this year, the company confirmed on Saturday.
TGI Fridays, the popular restaurant chain, filed for Chapter 11 bankruptcy protection on Saturday, aiming to secure the long-term sustainability of the brand after shutting down several locations this year.
The Dallas-based company submitted its filing in a Texas federal court.
Rohit Manocha, the executive chair of TGI Fridays, stated that the financial difficulties primarily stem from the impacts of COVID-19 and the company’s capital structure.
In recent years, casual dining establishments have struggled as more customers opt for food delivery or choose to dine at upscale fast-casual restaurants like Chipotle and Shake Shack.
A U.S. bankruptcy judge recently approved a reorganization plan for Red Lobster, another chain that has faced significant challenges due to declining customer numbers.
Founded in 1965, TGI Fridays reached its peak popularity in 2008, boasting 601 locations in the U.S. and generating $2 billion in revenue, according to Kevin Schimpf, director of industry research at Technomic.
However, the chain reported sales of $728 million in 2023, a 15% decline from the previous year.
Currently, TGI Fridays operates a total of 163 restaurants in the U.S., down from 269 last year, having closed 36 locations in January and several more in the past week.
The company noted that it directly owns and operates only 39 of these restaurants, a small portion of the 461 TGI Fridays locations worldwide.
The intellectual property of the brand is held by a separate entity, TGI Fridays Franchisor, which has franchised the brand to 56 independent operators in 41 countries, and those locations remain open.
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