Why TGI Fridays is Seeking Bankruptcy Help

The iconic restaurant chain TGI Fridays has sought bankruptcy protection. This move comes after the company faced significant financial struggles due to the COVID-19 pandemic and its capital structure. The Dallas-based chain filed for Chapter 11 bankruptcy in a Texas federal court on Saturday. The executive chair of TGI Fridays, Rohit Manocha, explained that the primary cause of their financial troubles was the pandemic and their capital structure. Over the years, sit-down chain restaurants like TGI Fridays have encountered challenges as many diners prefer food delivery or opt for upscale fast food chains like Chipotle and Shake Shack. Founded in 1965, TGI Fridays reached its peak popularity in 2008 with 601 restaurants in the US and a $2 billion business. However, its sales in the US dropped to $728 million in 2023, marking a 15% decrease from the previous year, according to Technomic's Kevin Schimpf. The number of TGI Fridays restaurants in the US has also significantly decreased. From 269 last year, it now has 163 restaurants. The company closed 36 branches in January and many more in the past week. Out of the 461 TGI Fridays-branded restaurants worldwide, only 39 are owned and operated by TGI Fridays Inc, with the intellectual property and brand being franchised to 56 independent owners in 41 countries. Those franchised restaurants remain open.