DALLAS — The popular restaurant chain TGI Fridays has initiated a bankruptcy protection process, filing for Chapter 11 in a Texas federal court on Saturday. The decision comes as the brand seeks solutions to secure its long-term sustainability following a significant number of branch closures throughout the year.
Executive Chairman Rohit Manocha attributed the company’s financial issues largely to the impacts of the COVID-19 pandemic alongside its capital structure, indicating that the challenges have been exacerbated over time.
In recent years, sit-down restaurant chains have struggled to maintain their market share as consumers increasingly prefer food delivery services or opt for fast-casual dining experiences offered by popular chains like Chipotle and Shake Shack.
This situation parallels the struggles of other dining establishments, including seafood chain Red Lobster, which received a court-approved reorganization plan in September after experiencing prolonged losses and a significant drop in patrons.
Since its inception in 1965, TGI Fridays’ most notable success came in 2008 when the brand boasted 601 locations across the U.S. with an impressive revenue of $2 billion. However, recent reports indicate a depreciation in its performance; sales for 2023 have hit $728 million, reflecting a 15% decrease compared to the previous year, according to industry research.
Currently, TGI Fridays operates only 163 restaurants in the U.S., a significant decline from 269 a year ago. The franchise had to shutter 36 locations in January and has continued to close a number of others in recent weeks.
At present, TGI Fridays Inc. controls just 39 of the U.S. locations, which represents a small portion of the total 461 TGI Friday-branded establishments worldwide. The intellectual property is held by a separate entity, TGI Fridays Franchisor, which has permitted 56 independent franchisees across 41 countries to operate their own branches, all of which are still in business.
