TGI Fridays Files for Bankruptcy

TGI Fridays, the Texas-based casual dining restaurant, has filed for bankruptcy protection, blaming issues with its capital structure and the after-effects of the Covid-19 pandemic.

The bar-and-grill chain, which has 39 restaurants in the U.S., said over the weekend it has filed for Chapter 11. Those restaurants, as well as locations owned by 56 independent franchisees in 41 countries, including the U.S., will stay open, the company said. Independent franchises are not part of the bankruptcy.

The nearly six-decade-old chain has been closing restaurants and grappling with competition from more trendy restaurants like Chipotle Mexican Grill (CMG) as well as a pullback by consumers in spending amid inflation.

TGI Fridays’ Filing Comes as Red Lobster Exits Chapter 11

Rival casual-dining chain Red Lobster, which grabbed headlines this year when it filed for bankruptcy, received court approval to leave Chapter 11 and handed control to private equity firm Fortress Investment Group, it said in September.

On Saturday, TGI Fridays Inc Executive Chairman Rohit Manocha called the move to file for bankruptcy “difficult but necessary.”

“The primary driver of our financial challenges resulted from COVID-19 and our capital structure,” Manocha 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.”