TGI Fridays Bankruptcy: Iconic Chain Closes Branches Amid Industry Turmoil
TGI Fridays Files for Bankruptcy Amid Industry Challenges
TGI Fridays, the once-iconic restaurant chain, has filed for Chapter 11 bankruptcy protection in a Texas federal court. The move comes as the company seeks to ensure its long-term viability after closing numerous branches across the United States.
Executive Chairman Rohit Manocha cited the COVID-19 pandemic and the company’s capital structure as primary financial challenges. This filing marks a significant decline for the chain, which was once a cultural staple, known for training Tom Cruise for his role in “Cocktail” and being parodied in the film “Office Space.”
The restaurant industry has faced numerous challenges in recent years, with sit-down chain restaurants struggling against competition from delivery services and upscale fast-food chains like Chipotle and Shake Shack. TGI Fridays is not alone in its struggles, as other chains such as Red Lobster and Buca di Beppo have also sought bankruptcy protection.
Founded in 1965 in Manhattan, TGI Fridays grew to become a popular suburban gathering spot. The chain reached its peak in 2008 with 601 U.S. restaurants and $2 billion in business. However, U.S. sales have since plummeted, dropping to $728 million in 2023, a 15% decrease from the previous year.
Currently, only 163 U.S. restaurants remain, down from 269 last year. The company closed 36 locations in January and has continued to shutter more outlets recently. TGI Fridays Inc. now owns just 39 U.S. restaurants, with the brand franchised globally to 56 independent owners.
The company’s financial struggles extend beyond U.S. borders. Hostmore, a UK-based franchisee, recently sought debt protection and closed locations after a failed takeover deal. During the pandemic, TGI Fridays attempted to expand into delivery through ghost kitchens, but this effort appears to have fallen short. Bankruptcy filings indicate that DoorDash is among the company’s major creditors.
These challenges are not unique to TGI Fridays. Denny’s, another well-known chain, recently announced the closure of 150 low-performing restaurants to improve sales, reflecting the broader struggles facing the industry.
As TGI Fridays navigate through this bankruptcy process, the outcome will be closely watched by industry observers and competitors alike, potentially signaling broader trends in the evolving landscape of casual dining.
