TGI Fridays Nears Bankruptcy With More Restaurant Closures
TGI Fridays may soon be included in the list of chain restaurants that experienced bankruptcy scares in 2024 (a list that also includes Red Lobster and Popeyes). The restaurant has recently closed even more locations, bringing the total number of restaurants in the United States down to 164. These location closures are in addition to the 36 that took place in January of 2024, which affected restaurants in 12 states, as well as 35 closures in the U.K. in early October. The latest spate of closures has shuttered TGI Fridays restaurants in Ohio, New York, California, and several other states.
Meetings held regarding the financial future of TGI Fridays indicate that the chain is likely to file for Chapter 11 bankruptcy soon. One major development involved the chain being removed as manager from the whole business securitization process it initiated in 2017, which is a financing strategy that involves packaging a company's assets and selling them to investors. With this strategy, problems can arise if the company (in this case, TGI Fridays) is unable to cover operating expenses and pay back investors in the time allotted. It's also been reported that the restaurant is seeking financial support during the upcoming bankruptcy process. TGI Fridays hopes that the bankruptcy filing will help it remain afloat despite the tumultuous financial state it finds itself in.
What led to the decline of TGI Fridays?
TGI Fridays was once considered a hip and happening place that some even credit with spurring the contemporary cocktail culture that's still quite popular today. Additionally, TGI Fridays has expanded its digital presence by establishing virtual kitchens, which shows that the chain has an eye on the future of fast-casual dining. However, the restaurant chain has faced some significant obstacles over the years, including the evolving desires of consumers when it comes to dining establishments, as well as lower costs at competing fast-food establishments (although plenty of consumers are also unhappy with fast-food joints like McDonald's and its skyrocketing prices over the years).
TGI Fridays also saw some significant upheaval in 2023 regarding its chief executive officer. Current CEO Weldon Spangler had to take up the role in October 2023 after Brandon Coleman abruptly resigned. Coleman had been promoted from another role to help reinvigorate the brand just two months prior in August 2023 after former CEO Ray Blanchette stepped down in May of that same year.
As for whether TGI Fridays will be able to bounce back after what seems to be impending bankruptcy, that's hard to say. Many chain restaurants are experiencing similar struggles these days, and once powerful brands may now be looked at as outdated and old-fashioned. Chapter 11 bankruptcy allows businesses to restructure their debt, which could provide this once beloved chain with a little financial breathing room.