TGI Fridays files for bankruptcy protection as sit-down restaurant struggles continue
Restaurant chain TGI Fridays filed for bankruptcy protection on Saturday, saying it is looking for ways to “ensure the long-term viability” of the casual dining brand after closing many of its branches this year.
The Dallas-based company’s Chapter 11 filing in a Texas federal court accelerates the gradual decline of an iconic chain that was once near the center of American pop culture but has seen its customer base dwindle as tastes changed.
The company boasted that its bartenders trained Tom Cruise for his role in the 1988 film “Cocktail.” The wait staff’s button-filled uniforms, intended to evoke a fun atmosphere, were later parodied in the satire “Office Space’ from 1999, starring Jennifer Aniston.
Rohit Manocha, executive chairman of TGI Fridays, said in a statement that the “key driver of our financial challenges resulted from COVID-19 and our capital structure.”
Sit-down restaurants more broadly have faced challenges in recent years as diners opted to have food delivered or visit upscale fast-food chains like Chipotle and Shake Shack.
An American bankruptcy judge in September a reorganization plan approved for the Red Lobster seafood chain after years of mounting losses. Italian-American food chain Buca di Beppo filed for bankruptcy protection in August.
Founded in 1965 as a bar on Manhattan’s Upper East Side, TGI Fridays expanded over the ensuing decades into a ubiquitous suburban hangout known for its ribs, potato skins topped with cheese and bacon, and decor adorned with red stripes and Tiffany style. lamps.
The empire peaked in 2008 with 601 restaurants in the U.S. and a $2 billion business, said Kevin Schimpf, director of industrial research at Technomic. According to Technomic, U.S. sales reached $728 million in 2023, down 15% from the previous year.
It now has 163 restaurants in the U.S., up from 269 last year. It closed 36 in January and dozens more in the past week.
TGI Fridays Inc. said it owns and operates just 39 restaurants in the U.S., which is just a fraction of the 461 TGI Fridays-branded restaurants around the world. A separate entity, TGI Fridays Franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries. They remain open.
A UK-based franchisee, Hostmore, also sought debt protection in September and abruptly closed locations in that country after a failed takeover deal to acquire TGI Fridays.
During the pandemic, TGI Fridays has made efforts to expand into the delivery market by making itself a hub for so-called ghost kitchens, which have no storefront and only prepare food for delivery. One of the main creditors that owes TGI Fridays money is delivery service DoorDash, according to Saturday’s bankruptcy court filings.
Another iconic American sit-down restaurant, Denny’s, announced in October that it is closing 150 of its worst-performing restaurants in an effort to reverse the brand’s declining sales.