TGI Fridays has filed for Chapter 11 bankruptcy, citing the prolonged economic effects of the COVID-19 pandemic as the primary reason for its financial struggles. The company aims to use the bankruptcy proceedings to explore strategic alternatives to secure its future.

  • Impact on Operations: The bankruptcy involves only TGI Fridays’ parent company which directly operates 39 locations, not affecting the franchise-owned restaurants. Operations will continue normally during the restructuring, supported by secured financing.
  • Financial Adjustments: The company has paused payments to landlords and vendors to alleviate immediate financial pressures and plans to reevaluate its less profitable locations.
  • Company Background: Founded in 1965 in Manhattan, TGI Fridays helped popularize the “happy hour” and is known for its American comfort food and distinctive interior decor. Staff uniforms famously included “flair,” as highlighted in popular culture like the movie “Office Space.”
  • Pandemic and Financial Challenges: The chain struggled significantly due to closures during the pandemic and has not fully recovered. Inflation has also put additional pressure on its predominantly middle-class customer base.
  • Recent Closures and Sales: Before the recent wave of shutdowns, TGI Fridays had closed numerous U.S. locations and reported about 270 locations at the start of the year. The chain estimated a total sales figure of $1.6 billion for 2022, with a notable increase in same-store sales from 2019.
  • Ownership and Management: TGI Fridays is owned by TriArtisan Capital Advisors. The chain has made efforts to revamp its menu to compete with similar restaurants like Applebee’s and Chili’s, adding items like sushi and updating its cocktails and appetizers.
  • Global Operations: The UK operations also encountered financial difficulties, leading to bankruptcy and the closure of several restaurants, impacting around 1,000 jobs.

This step by TGI Fridays reflects broader challenges in the casual dining industry, evidenced by similar bankruptcy filings from other chains like Red Lobster and Buca di Beppo.