TGI Fridays Files for Chapter 11 Bankruptcy as Casual Dining Struggles Continue

The popular restaurant chain TGI Fridays known for its lively atmosphere and casual dining experience has filed for Chapter 11 bankruptcy protection as it seeks to navigate significant financial challenges.

The Dallas-based company made the announcement on Saturday, marking a pivotal moment for a brand that has been a staple in American dining since 1965.

The decision to file for bankruptcy comes after a series of closures and declining sales. TGI Fridays has seen its customer base dwindle as many diners now prefer delivery options or upscale fast-food alternatives.

Rohit Manocha, the executive chairman of TGI Fridays, explained that "the primary driver of our financial challenges resulted from COVID-19 and our capital structure."

Once boasting 601 locations in the US in 2008, TGI Fridays now operates only 163 restaurants. The company closed 36 locations in January and has shuttered more in recent weeks, according to AP News.

TGI Fridays Faces Financial Struggles

In 2023, its sales reached $728 million, a sharp decline of 15% from the previous year. This decline reflects broader struggles within the casual dining sector, where other chains like Red Lobster and Buca di Beppo have also filed for bankruptcy in recent months.

TGI Fridays currently operates 39 company-owned restaurants, while the remainder of its locations are franchised and remain unaffected by the bankruptcy filing. Despite this, the company is in a tough spot, as it navigates significant debts, including money owed to delivery service DoorDash.

To support its restructuring efforts, TGI Fridays has secured a loan from the Bank of San Antonio. The company has appointed Kyle Richter from Berkeley Research Group as its chief restructuring officer, tasked with steering TGI Fridays through this challenging period, WSJ reported.

The iconic brand, famous for its ribs and vibrant decor, has struggled to adapt to changing consumer preferences. In an effort to stay relevant, TGI Fridays previously expanded into the delivery market and embraced ghost kitchens. However, these moves were not enough to overcome the financial hurdles posed by the pandemic and changing dining habits.