TGI Fridays Files for Chapter 11 Bankruptcy Amid Ongoing Casual Dining Struggles

TGI Fridays Inc., the iconic casual dining chain, has filed for Chapter 11 bankruptcy protection in the Northern District of Texas. The filing, made on November 2, 2024, comes as the company grapples with significant financial challenges exacerbated by the COVID-19 pandemic and its capital structure.

The company, which operates 39 company-owned restaurants in the U.S., listed assets and liabilities between $100 million and $500 million in its bankruptcy petition. This move is part of a broader restructuring effort aimed at optimizing its corporate infrastructure and ensuring the long-term viability of the brand. TGI Fridays has secured debtor-in-possession financing to support its operations during the restructuring process.

Rohit Manocha, the executive chairman of TGI Fridays Inc., attributed the financial difficulties primarily to the impact of COVID-19 and the company’s capital structure. The bankruptcy affects only the company-owned U.S. locations, while franchised locations in 41 countries will continue to operate as usual.

TGI Fridays is not alone in its struggles; the casual dining sector has been under pressure from consumers who are increasingly opting for faster, more affordable dining options. Other chains like Red Lobster and Buca di Beppo have also filed for bankruptcy this year. The shift towards limited service and takeout, coupled with high inflation, has further compounded the challenges faced by sit-down restaurants.

The company has a storied history, founded in 1965 in New York City as a laid-back bar and grill. It grew to become one of the first casual-dining chains and a global brand known for its ribs, loaded potato skins, and cocktails. However, over the years, TGI Fridays has closed numerous locations, with its U.S. footprint shrinking significantly from its peak in 2008.

In recent months, TGI Fridays has closed over 50 additional restaurants across the U.S., bringing its current total to 163 U.S. locations. The company’s efforts to merge with U.K. franchisee Hostmore PLC earlier this year were also unsuccessful, contributing to its current financial predicament).