American restaurant chain “Fridays” files for bankruptcy

American fast-food chain, TGI Fridays, declared its bankruptcy under Chapter 11 of the bankruptcy code on Saturday.

According to CNN, the company said in a statement that the repercussions of the Covid-19 pandemic were “the primary driver of our financial challenges,” and that it will use Chapter 11 “to explore strategic alternatives to ensure the long-term viability of the brand.”

“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,” TGI Fridays CEO Rohit Manocha said in a statement.

The bankruptcy affects the parent company of TGI Fridays, which operates 39 restaurants, not the franchisees who control the remaining locations. The company has secured financing so that all restaurants can operate as usual while it navigates the bankruptcy process.

TGI Fridays “stopped the clock on this month’s rent payments to landlords and other vendors, giving them breathing room to restructure,” said John Bringardner, president of Debtwire. The parent company “will likely have to close or sell unprofitable locations as part of the restructuring,” he added.

TGI Fridays began in 1965 in Manhattan as a place for singles to meet and was one of the first major chains to popularize the concept of “happy hour.” The menu features a wide range of American fare, including chicken wings, potato skins and hamburgers. Diners will immediately recognize its quirky interior with Tiffany-style lamps and large red booths, plus a large bar that is typically the focal point of TGI Fridays restaurants. Additionally, service employees wear “decorations,” or pins and other decorative pieces, on their uniforms, which became a running joke in the 1999 movie “Office Space.”

TGI Fridays never fully recovered from the pandemic, which shuttered restaurants for dine-in for months. Combined with inflationary pressure on its middle-class customers, it created financial chaos for the nearly six-decade-old chain.

In January 2024, TGI Fridays abruptly closed dozens of locations across the United States and has continued to quietly shutter restaurants. Last week, it closed 50 locations, reducing its number to 163. Before this year’s wave of closures, TGI Fridays had about 270 locations in the United States.

TGI Fridays is privately held by TriArtisan Capital Advisors, a private equity firm, so financial results have not been released. Still, the company said last year that total sales were expected to reach $1.6 billion in 2022, with same-store sales in the U.S. growing 8% compared with 2019.

It has also been changing its menu to keep up with rivals, notably Applebee’s and Chili’s, by adding sushi, updating its cocktail menu and giving its appetizer selection a fresh spin.

In September, TGI Fridays’ U.K. operations also ran into trouble. A proposed takeover by a U.K. franchisee fell through and it went bankrupt. It is in the process of closing dozens of restaurants in the region and cutting 1,000 jobs.

TGI Fridays joins Red Lobster and Buca di Beppo, both of which filed for Chapter 11 bankruptcy protection in recent months. However, the latter emerged from bankruptcy and hired an executive from P.F. Chang’s to turn the business around.