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TGI Fridays, the American casual dining brand famous for its lively atmosphere and happy-hour tradition, has filed for Chapter 11 bankruptcy protection as it grapples with the lingering impacts of the COVID-19 pandemic. The filing allows the company to reorganize its finances and consider strategic options to support long-term viability. TGI Fridays executives stated that the restructuring is essential to protect all stakeholders, including its employees and both U.S. and international franchisees.
The bankruptcy filing primarily impacts TGI Fridays’ corporate entity, which directly manages 39 restaurants. Franchisee-run locations, which make up the majority of its global footprint, will not be directly affected and are expected to continue operations as usual. In fact, TGI Fridays has secured interim financing that will enable all restaurants, including corporate-owned locations, to keep serving customers during the restructuring period. However, some corporate-owned U.S. restaurants could face closures or sales if they are found unprofitable as the company seeks to improve its financial position.
Franchisee-run locations, which make up the majority of its global footprint, will not be directly affected and are expected to continue operations as usual.
Since its launch in 1965 in New York City, TGI Fridays has become a recognized name in casual dining, noted for its American-style menu of wings, burgers, and potato skins, as well as its signature bar setup. However, the chain struggled significantly during the pandemic as indoor dining was restricted and inflation further strained its middle-class customer base. These challenges prompted a series of location closures over the past year, including a recent shuttering of 50 U.S. restaurants, reducing its count to 163.
The Chapter 11 process comes on the heels of a difficult period for TGI Fridays’ international operations as well. In the United Kingdom, the brand’s largest international market, a planned acquisition by its UK franchisee fell through, leading to bankruptcy and resulting in numerous restaurant closures and job losses. Despite these setbacks, the franchise locations abroad, which are independently managed, will not be directly impacted by the U.S. bankruptcy filing.
TGI Fridays' move to file for bankruptcy follows similar actions by other well-known brands like Red Lobster and Buca di Beppo, which also sought court protection to reorganize. Like TGI Fridays, these brands struggled to adapt to a shifting dining landscape and financial pressures, though some have begun to recover through executive changes and operational adjustments.
As TGI Fridays navigates this reorganization, it aims to stabilize its U.S. operations while allowing international franchises to operate independently without disruption.
Source: CNN
