TGI Friday’s Files For Chapter 11 Bankruptcy
TGI Friday’s, one of America’s most iconic casual dining chains, has just filed for Chapter 11 bankruptcy protection. The decision follows the company’s efforts to recover from the impact of Covid-19, which it says was the “primary driver of our financial challenges.” Rohit Manocha, TGI Friday’s executive chairman, added, “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 Friday’s parent company, TriArtisan Capital Advisors, will mostly be affected, rather than the franchises. It has managed to secure the finances necessary for its 39 restaurants to stay open while it undergoes the process. According to CNN, John Bringardner, head of Debtwire, said that its parent company “will likely have to close or sell unprofitable locations as part of the restructuring.” TGI Friday’s has been an indelible part of American comfort food for nearly 60 years.
Dozens of locations were shuttered in January 2024, and more have closed throughout the year. An additional 50 locations were closed just last week, bringing its total to 163, down from 270 prior to January. To compete with rivals Applebee’s and Chili’s, TGI Friday’s updated its menu with sushi, new cocktails, and appetizers. The changes failed to improve sales. Locations in the UK are also experiencing financial issues, which has left 1,000 employees without a job.
Meanwhile, industry competitor Chili’s is witnessing a resurgence in sales, thanks in part to the popularity of the Big Smasher burger, its $6 margaritas, and Triple Dipper combination platters, per CNN. Chili’s parent company, Brinker International, reported a 14% increase in sales and 6.5% in traffic. Along with strong promotional targeting and tongue-in-cheek ad campaigns calling out competitors, its menu items have been going viral on TikTok.
Time will tell whether TGI Friday’s can rebound like its rival Chili’s.
