TGI Fridays UK Operator Faces Administration Amid Rescue Deal Collapse

The future of TGI Fridays‘ 87 UK outlets and 3,000 jobs hangs in the balance as Hostmore, the company operating the brand, announces plans to appoint administrators. The decision follows the failure to negotiate a successful rescue deal. Hostmore, listed on the London stock market, has appointed Teneo, an advisory firm, to manage the administration process and sell the restaurant assets to potential buyers.

The ongoing operation of the restaurants will continue in the short term. Hostmore has indicated that the expected sale, anticipated by the end of October, will likely generate less than the company’s current debt of £35 million, prompting a suspension of trading in its shares. The company had faced challenging circumstances after £180 million takeover discussions with TGI Fridays in the US fell through last week.

In the unsuccessful merger talks, Hostmore encountered difficulties when the main US franchise owner announced they lost rights to royalties and other payments associated with the TGI Fridays brand. This announcement led to a drastic 90% drop in Hostmore’s stock value.

While the future of TGI Fridays in the UK remains uncertain, Hostmore’s board emphasized their efforts to cut annual expenses by £12 million and improve the operational efficiency of the business. Despite these efforts, the company struggled under unfavorable economic conditions and the failed acquisition attempt.

Founded in 1965 in New York, TGI Fridays became well known for serving classic American dishes like burgers in a casual and vibrant atmosphere. The brand entered the UK market in 1994 and was later taken over by private equity firm Electra Partners in 2014. Electra spun off Hostmore as an independent entity in 2021.