Restaurant chain TGI Fridays filed for bankruptcy protection on November 2, saying it is looking for ways to “ensure the long-term viability” of the casual dining brand after closing many of its branches in 2024.
The Dallas-based company's Chapter 11 filing in a Texas federal court accelerates a gradual decline for an iconic chain that was once near the center of American pop culture but has seen its customer base dwindle as tastes changed.
TGI Fridays executive chairman Rohit Manocha said in a statement that the challenges were a result of COVID-19.
"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," Manocha said. "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."
Until recently, Dallas-Fort Worth had 11 locations including five at DFW Airport. Those airport locations are the only ones still open. The remaining six are all now closed — some closures very recent, most after being in business for a decade or more: 4951 Belt Line Rd. in Addison; 311 N. Clark St. in Cedar Hill, southwest of Dallas; 3700 Towne Crossing Blvd. in Mesquite; and 220 Cornflower Dr. at Firewheel Town Center in Garland.
A Plano location at 2444 Preston Rd. closed in 2022 and is now home to Rise Souffle, while the flagship in Dallas' West End at 1713 Market St. closed in 2020 after 32 years.
Privately owned by TriArtisan Capital Advisors, TGI Fridays has been a beloved dining destination since its inaugural bar opened in Manhattan in 1965. It expanded over the following decades to become a ubiquitous suburban gathering spot known for its ribs, potato skins topped with cheese and bacon, and a decor bedecked with red stripes and Tiffany-style lamps.
The company has boasted that its bartenders trained Tom Cruise for his role in the 1988 film Cocktail, while its serving staff's button-filled uniforms, meant to evoke a fun atmosphere, were later parodied in the 1999 satire Office Space, starring Jennifer Aniston.
Its empire peaked in 2008 with 601 restaurants in the U.S. and a $2 billion business, according to Kevin Schimpf, director of industry research at Technomic. Its sales in the U.S. were $728 million in 2023, down 15% from the prior year, according to Technomic.
It now counts 163 restaurants in the U.S., down from 269 last year and 213 from a week ago. It closed 36 in January and dozens more in the past week. TGI Fridays Inc. said it only owns and operates 39 restaurants in the U.S, a fraction of the 461 TGI Fridays-branded restaurants around the world.
A separate entity, TGI Fridays Franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries. Those are independently owned and not part of the Chapter 11 process, and remain open.
A United Kingdom-based franchisee, Hostmore, also sought debt protection in September and abruptly closed locations throughout that country after a failed takeover deal to acquire TGI Fridays.
During the pandemic TGI Fridays made an effort to expand into the delivery market by making itself a hub for ghost kitchens, which have no storefront and only prepare food for delivery. Among the major creditors owed money by TGI Fridays is the delivery service DoorDash, according to Saturday's bankruptcy court filings.
Sit-down chain restaurants more broadly have faced challenges in recent years as diners choose to get food delivered or visit upscale fast-food chains like Chipotle and Shake Shack. In September a U.S. bankruptcy judge approved a reorganization plan for the seafood chain Red Lobster after years of mounting losses. Italian American food chain Buca di Beppo filed for bankruptcy protection in August. PAnother iconic U.S. sit-down restaurant, Denny's, announced in October that it is closing 150 of its lowest-performing restaurants in an effort to turn around the brand’s flagging sales. Wendy’s is also closing up to 140 restaurants, according to a statement from The Wendy's Co. on October 31.
