TGI Fridays, restaurant chain that popularized 'happy hour,' seeks bankruptcy
Renowned American restaurant chain TGI Fridays has filed for bankruptcy protection amid the financial toll of COVID-19 and changing dining trends. The company has seen a drastic decline in sales, resulting in the closure of many branches. However, several international franchises are still open. The Dallas-based company's Chapter 11 filing was submitted in a Texas federal court on Saturday.
Restructuring to ensure long-term viability
TGI Fridays has said its US and international restaurants will continue serving customers during the restructuring process. The company is looking at strategic alternatives to ensure its long-term viability. The move comes as a major shift for the iconic chain, which was once a staple of American pop culture but has seen its customer base shrink due to changing tastes.
TGI Fridays's executive chairman comments on financial challenges
Rohit Manocha, Executive Chairman of TGI Fridays, blamed the company's financial woes mainly on COVID-19 and its capital structure. He said, "This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential." The pandemic has also led other sit-down chain restaurants such as Red Lobster and Buca di Beppo, to seek bankruptcy protection amid losses.
TGI Fridays's journey from a Manhattan bar to bankruptcy
TGI Fridays opened its doors in 1965 as a bar on Manhattan's Upper East Side. Over the years, it transformed into a popular suburban hangout famous for its ribs, potato skins topped with cheese and bacon, and signature red-striped decor with Tiffany-style lamps. The company's empire peaked in 2008 with 601 restaurants in the US and a $2 billion business. It was also one of the first major chains to popularize the "happy hour" concept.
TGI Fridays's sales and restaurant count decline
According to Technomic's Director of Industry Research, Kevin Schimpf, TGI Fridays's US sales stood at $728 million in 2023, a 15% decline from the previous year. The company currently operates 163 restaurants in the US, a drastic decline from 269 last year. It shuttered 36 branches in January alone and dozens more over the past week.
TGI Fridays's ownership and franchise details
TGI Fridays Inc. owns and operates only 39 restaurants in the US, a fraction of the 461 TGI Fridays-branded restaurants around the world. The intellectual property is owned by a different entity, TGI Fridays Franchisor, which has franchised the brand to 56 independent owners in 41 countries. These franchises continue to operate despite the company's bankruptcy filing.
