TGI Fridays Files for Bankruptcy Amid Financial Struggles

TGI Fridays Inc., the company that operates the eponymous casual dining chain, has filed for Chapter 11 bankruptcy as it navigates challenges stemming from the COVID-19 pandemic shutdowns and shifting consumer preferences.
The 125 or so TGI Fridays restaurants in the United States that are independently owned and operated by franchisees are not involved in the bankruptcy process.
TGI Fridays Inc. said in a statement that it has secured debtor-in-possession financing to support its ongoing operations as it navigates the Chapter 11 process, allowing it to continue paying staff and suppliers, ensuring that day-to-day operations remain unaffected at its corporate-owned locations.
“The primary driver of our financial challenges resulted from COVID-19 and our capital structure,” Rohit Manocha, executive chairman of TGI Fridays Inc., said in a statement. “This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”
Many dining establishments have struggled to recover from pandemic-related curbs on businesses, which were forced to restrict operations or adjust operating models, such as cutting in-person service and pivoting to curbside pickups. While many have bounced back, some have continued to feel the effects.
The casual dining sector has also become increasingly competitive, with consumers favoring fast-casual and delivery options over traditional sit-down restaurants. This shift has adversely affected TGI Fridays’ market share and financial health.
Globally, TGI Fridays continues to operate more than 460 restaurants across 41 countries, with international franchisees remaining unaffected by the U.S. bankruptcy proceedings.
In September, British restaurant operator Hostmore dropped plans to buy TGI Fridays, with the proposed deal unraveling as TGI Fridays lost control of key assets used as collateral for asset-backed securities issued in 2017.