TGI Fridays Files for Chapter 11 Bankruptcy Protection

TGI Fridays has announced that it has filed for Chapter 11 bankruptcy protection in Dallas, Texas, as of Saturday, Nov. 2.

The casual dining chain revealed the filing in a press release announcement. “TGI Fridays Inc. (the ‘Company’), the owner and operator of 39 domestic restaurants in the TGI Friday’s casual dining chain, today filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Texas,” the announcement read. “The Company expects to use the time and legal protections made available through the Chapter 11 restructuring process to allow the Company to explore strategic alternatives in order to ensure the long-term viability of the brand.”

The announcement further revealed that individual franchisees wouldn’t be affected by the filing and that many restaurants would continue their operations thanks to a Transition Services Agreement that also will provide funding to franchisees while the corporation pursues its protections under the Chapter 11 filing.

“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,” said Rohit Manocha, executive chairman of TGI Fridays Inc., in a statement accompanying the press release. “The primary driver of our financial challenges resulted from COVID-19 and our capital structure. This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”

TGI Fridays Was Already in Trouble

TGI Fridays was already showing signs of financial trouble last month when it was announced that more than 1,000 people had lost their jobs as a result of the closure of 36 of its restaurants in the U.K.

According to Nation’s Restaurant News, the casual dining chain was spared for the time being in the U.K. after private equity firms Breal Capital and Calveton U.K. jointly acquired 51 of the 87 locations put up for sale by former U.K. master franchisee Hostmore PLC.

The remaining 36 stores of the American brand were quickly shut down, leaving 1,012 workers unemployed, while the remaining 51 outlets in the U.K. were able to preserve about 2,400 jobs.

TGI Fridays also shut down 36 locations in the U.S. earlier this year. According to a news release, the targeted eateries were not doing well in their respective markets in certain U.S. regions.