TGI Fridays Has Officially Filed For Bankruptcy
UPDATE: Nov. 4, 2024
On Nov. 2, TGI Fridays confirmed it has filed for Chapter 11 bankruptcy. The filing only impacts the chain's 39 company-owned locations, though TGI Fridays said it has secured funding to keep those restaurants operational throughout the Chapter 11 process. The chain's franchised locations also remain open and serving customers as usual. The company plans to use the bankruptcy process to restructure its finances in an effort to revive the chain.
"The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world," Rohit Manocha, executive chairman of TGI Fridays Inc., said in a statement. "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."
Our original story, published on Oct. 22, addressed rumors that the chain was considering bankruptcy; that reporting appears below.
A growing list of struggling restaurant chains have resorted to bankruptcy in 2024, including iconic sit-down brands like Red Lobster and Buca di Beppo. Now, another famous casual dining chain may join these companies in declaring bankruptcy—and the filing could happen very soon.
Bloomberg, citing people familiar with the matter who asked to remain anonymous, reported on Oct. 19 that TGI Fridays was making preparations for a potential Chapter 11 bankruptcy filing in the coming weeks. The people told the publication that TGI Fridays is talking with lenders as it hunts for a loan to keep its restaurants operational during the possible bankruptcy process.
The company is reportedly working with lawyers from the firm Ropes & Gray LLP to ready itself for bankruptcy. Debtwire also reported earlier this month that TGI Fridays was exploring a possible bankruptcy filing. However, the anonymous sources told Bloomberg that the bankruptcy preparations aren't set in stone yet and could still change.
The bankruptcy reports emerged during a difficult period for TGI Fridays, which just last month lost control of most of its assets after it didn't file documents to bondholders on time. Hostmore, a TGI Fridays operator based in the United Kingdom, backed out of plans to purchase the chain just days later. Afterward, Hostmore closed 35 restaurants and filed for the United Kingdom's equivalent of bankruptcy.
TGI Fridays has also struggled with sales growth and closures for years and has shuttered roughly 50 locations in the United States alone since the start of 2024, Restaurant Business Magazine reported. It currently operates 215 restaurants in the United States, a big decline from the 386 locations it had in May 2020.
TGI Fridays did not immediately respond to our queries for confirmation and comment on the bankruptcy preparation reports.
If TGI Fridays does end up filing for bankruptcy soon, the move would come just a few months after Red Lobster announced its own Chapter 11 filing to address financial and operational issues. The seafood chain had struggled for years with high costs and operating losses and took a particularly hard blow during its ill-fated Ultimate Endless Shrimp promotion in 2023. Since then, Red Lobster has found a new owner and successfully exited bankruptcy.
Meanwhile, Buca di Beppo—the other major sit-down chain to face bankruptcy in 2024—filed for Chapter 11 protection in August. The company blamed declining sales, elevated costs, staffing issues, and changing consumer preferences for its financial woes. However, the bankruptcy filing has allowed Buca di Beppo to work on restructuring the company while enhancing operations and the guest experience.
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