After weeks of reports claiming that TGI Fridays was preparing for bankruptcy, the beloved American casual dining chain officially filed for Chapter 11 bankruptcy protection on Saturday, November 2nd.
Why Did TGI Fridays File for Bankruptcy?
In a statement announcing its bankruptcy filing, TGI Fridays said that the fallout from the COVID-19 pandemic was the “primary driver” of the chain’s financial challenges and it will use the Chapter 11 process to “explore strategic alternatives in order to ensure the long-term viability of the brand.”
Rohit Manocha, TGI Fridays’ executive chairman, added, “The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world.”
How Many TGI Fridays Locations Have Been Closed?
In January 2024, TGI Fridays abruptly closed 36 locations across the United States and continued downsizing throughout the year. By October, an additional 49 restaurants had been shut down, totaling at least 85 closures.
It’s worth noting, however, that the bankruptcy only affects TGI Fridays’ parent company, which operates 39 restaurants, and not the franchisees that control the other remaining locations. According to the location finder on its website, TGI Fridays now operates 163 restaurants nationwide. Prior to the waves of closures this year, TGI Fridays had about 270 U.S. locations.
Although the company has secured financing, so all restaurants will operate as usual while it navigates the bankruptcy process, more location closures are expected going forward. In an interview with CNN, John Bringardner, head of Debtwire, said TGI Fridays has “stopped the clock on payments of this month’s rent to landlords and other vendors, giving them breathing room to restructure.” Bringardner added that the parent company “will likely have to close or sell unprofitable locations as part of the restructuring.”
How Did TGI Fridays Start?
Founded in 1965 by Alan Stillman in New York City, the first TGI Fridays was envisioned as a place where singles could meet and socialize in a friendly, laid-back atmosphere. With its signature red-and-white striped awning and a warm, welcoming ambiance, the laid-back singles bar quickly became popular among locals.
The concept was revolutionary at the time, combining a lively bar scene with an extensive menu of American comfort food. Its casual vibe, innovative cocktails, and strong emphasis on customer experience distinguished TGI Fridays from traditional dining establishments. As word spread, the brand began to expand, introducing new locations across the U.S. and later internationally.
As of last year, TGI Fridays has over 600 restaurants worldwide. But as the brand struggles in the U.S. and some international markets like the United Kingdom where it closed dozens of restaurants that caused 1,000 job losses, it remains to be seen whether it can overcome its financial woes and successfully adapt to the shifting consumer preferences and economic pressures affecting the whole casual dining industry.
TGI Fridays is the latest casual dining chain to file for bankruptcy protection this year. Earlier this year, Red Lobster and Buca di Beppo both filed for Chapter 11, with the latter emerging from bankruptcy after a few months.