TGI Fridays, a well-known restaurant chain, has closed 30 of its locations across the United States. This decision comes after the company filed for Chapter 11 bankruptcy in November 2023. Chapter 11 bankruptcy allows a business to reorganize its debts while continuing to operate. The closures are part of the company’s efforts to manage its financial struggles.
Over 100 closures in the past year
Before filing for bankruptcy on November 2, 2023, TGI Fridays had already closed about 100 locations. These closures were part of a larger effort to cut costs and streamline operations. The chain has only 133 restaurants left in the U.S., according to its official website. This is about half the number of restaurants it had at the end of 2023, as reported by Technomic, a company that tracks restaurant industry data.
Recent closures in several states
Local news reports from states like New York, New Hampshire, Maryland, Massachusetts, and Ohio confirm that TGI Fridays restaurants in these areas have closed recently. Some of the closed locations posted signs on their doors, informing customers that the company had made a “difficult decision” to shut down. These closures have left many employees without jobs and customers without their favorite dining spots.
No comment from TGI Fridays
As of now, TGI Fridays has not responded to requests for comments about the closures. The company has remained silent on the reasons behind the recent shutdowns and its plans for the future.
Years of struggles
TGI Fridays has been facing financial difficulties for many years. From 2008 to 2023, the chain lost 55% of its U.S. locations. During the same period, its sales dropped by 63%, according to data from Technomic. The restaurant industry has become increasingly competitive, with many customers opting for fast-casual dining options or ordering food delivery instead of visiting sit-down restaurants like TGI Fridays.
Financial issues and failed merger
In 2023, TGI Fridays faced additional challenges. The company lost control of many of its assets due to problems with its business securitization. Business securitization is a process where companies raise money by selling future income. This financial setback made it harder for the company to manage its debts and continue operations smoothly.
Additionally, a planned merger with Hostmore, a U.K.-based franchisee, fell through. The merger was expected to help TGI Fridays strengthen its global presence and improve its financial situation. However, the deal did not materialize, leaving the company in a weaker position.
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Bankruptcy filing and asset sales
The bankruptcy filing in November 2023 only affected 39 company-owned locations in the U.S. Earlier this month, TGI Fridays announced that it would sell nine of these locations to Mera Corp., a restaurant operator, for $34.5 million. This sale is part of the company’s efforts to raise funds and pay off its debts.
Franchise operations continue
While the company-owned locations are being sold or closed, nearly 400 TGI Fridays restaurants worldwide are operated by franchisees. Franchisees are independent business owners who pay to use the TGI Fridays brand and operate their own locations. These franchise-operated restaurants are not directly affected by the bankruptcy filing.
Earlier this month, TGI Fridays appointed Ray Blanchette, a former CEO and current franchisee, to manage the global franchise business. Blanchette’s experience is expected to help strengthen the franchise operations and ensure the brand’s survival in the competitive restaurant industry.
Challenges in the restaurant industry
TGI Fridays is not the only restaurant chain facing challenges. The restaurant industry has been struggling with rising costs, labor shortages, and changing consumer preferences. Many customers are now choosing more affordable and convenient dining options, such as fast food or meal delivery services. Sit-down restaurants like TGI Fridays have found it harder to attract customers, especially in the wake of the COVID-19 pandemic, which changed how people dine out.
What’s next for TGI fridays?
The future of TGI Fridays remains uncertain. While the company is working to reorganize its finances and sell some of its assets, it will need to adapt to the changing market to survive. This could include updating its menu, improving customer service, and finding ways to attract younger diners. The success of its franchise operations will also play a key role in determining the brand’s future.
