TGI Fridays files for bankruptcy protection in the US | British News

The restaurant chain TGI Fridays has filed for bankruptcy protection in the USA.

The bankruptcy filing was filed by TGI Fridays Inc., a Dallas-based American arm of the casual dining brand that operates 39 restaurants in the United States.

This came after the company faced financial challenges due to the COVID-19 pandemic and a deal to sell it to its UK branch fell through.

The company said its 39 stores would remain open after receiving a funding commitment to support operations.

In its filing with the US Bankruptcy Court for the Northern District of Texas, TGI Fridays Inc listed both assets and liabilities ranging from $100m (£77m) to $500m (£387m).

Rohit Manocha, Chairman of TGI Fridays Inc, said: “The primary reason for our financial challenges resulted from COVID-19 and our capital structure.”

“This restructuring will allow our emerging restaurants to continue operating with an optimized business infrastructure that will enable them to reach their full potential.”

The company's 39 restaurants in the U.S. are a fraction of the 461 TGI Friday-branded restaurants around the world.

A separate company, the TGI Fridays franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries

These branches, including in the UK, will remain open.

The UK franchise was run by hospitality company Hostmore before going into administration in September – 4,500 jobs and 87 branches are at risk.

However, 51 restaurants remained open and 2,400 jobs remained open saved through a sale to private investment companies Breal Capital and Calverton.

Months earlier, an agreement to sell TGI Fridays Inc. to Hostmore for £177 million fell through.

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The deal collapsed after the US company lost control of TGIF Funding and with it the royalties from its lucrative franchise agreements and intellectual property.

TGI Fridays was founded in 1965 and peaked in 2008 with 601 restaurants in the US and sales of $2 billion (£1.5 billion), according to Kevin Schimpf, director of industry research at Technomic

According to Technomic, US sales in 2023 were $728m (£563m), down 15% from the previous year.

It now counts 163 restaurants in the U.S., up from 269 last year. Thirty-six of them were closed in January and dozens more last week.

In recent years, restaurant chains have faced greater challenges as diners opt to have food delivered or visit upscale fast-food chains like Chipotle and Shake Shack.