TGI Fridays has filed for bankruptcy protection to “position [its] restaurants for long-term success,” the casual-dining restaurant chain announced Saturday.
The self-described “birthplace of fun, freedom and celebration” filed for Chapter 11 protections in a federal court in Texas early on Saturday in a bid to allow the company to “explore strategic alternatives in order to ensure the long-term viability of the brand.”
The bankruptcy will only affect the 39 restaurants owned and operated by TGI Fridays Inc. All franchised stores operating in 41 countries will continue to serve customers as usual.
The “difficult and necessary actions” announced by the Dallas-headquartered company on Saturday are designed to protect the interest of franchisees, both in the U.S. and abroad, said Rohit Manocha, the company’s executive chairman.
“The primary driver of our financial challenges resulted from COVID-19 and our capital structure,” Manocha said. “This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”
Rumors of a possible bankruptcy filing have been circulating on business news sites and restaurant trade publications for weeks, fueled by the closure of restaurants across the U.S. over the past few months — several of which were located in New York, New Jersey and Connecticut.
Earlier this week, Restaurant Business reported that “the struggling casual-dining chain [had] closed about 100 locations this year amid a host of challenges.”
Saturday’s announcement comes as a growing number of high-profile casual-dining restaurant chains in the U.S. struggle to adjust to what appears to be a new landscape in the service industry in the US, as rising menu prices continue to turn off customers.
In May, seafood restaurant chain Red Lobster Early filed for bankruptcy protection after closing dozens of its locations. The company exited Chapter 11 protection four months later after a judge approved the company’s reorganization plan in early September.
Early last week, the diner-style restaurant chain Denny’s announced it would shut down 50 of its underperforming restaurants by the end of 2025, and on Friday, fast-food giant Wendy’s announced plans to close around 140 “poor-performing” restaurants by the end of the year.
Originally Published:
