TGI Fridays Files for Chapter 11 Bankruptcy

By Mrinmay Dey
(Reuters) – TGI Fridays, an American casual dining chain, announced on Saturday that it has filed for Chapter 11 bankruptcy protection due to prolonged financial struggles and a collapsed deal with UK-based Hostmore.

In its filing with the U.S. bankruptcy court for the Northern District of Texas, the company reported assets and liabilities ranging from $100 million to $500 million.

Privately owned by TriArtisan Capital Advisors, TGI Fridays has been a popular dining spot since its first bar opened in Manhattan, New York, over 50 years ago in 1965.

The owner and operator of 39 domestic "Thank God it's Friday!" restaurants stated that it continues to operate its corporate-owned 'happy hour' dining venues across the U.S. and has secured financing to support its operations.

Rohit Manocha, executive chairman of TGI Fridays, mentioned: "The primary driver of our financial challenges resulted from COVID-19 and our capital structure. This restructuring will enable our restaurants to optimize their corporate infrastructure and reach their full potential."

In September, British operator Hostmore backed out of plans to acquire TGI Fridays after losing its management role of TGIF Funding, which holds rights to collect royalties from the franchise. This prompted a 90% crash in Hostmore's shares, leading to its announcement to enter administration due to overwhelming debt.

As reported by the administrators of Thursdays (UK) in October, 35 TGI Fridays locations in the UK were closed, resulting in 1,012 job losses.

Following the bankruptcy announcement, the Dallas-based chain confirmed that normal operations would continue at all of its franchise locations, both domestically and internationally. TGI Fridays Franchisor, which owns the brand and its intellectual property, has franchised its restaurants to 56 franchisees in 41 countries, and those independent stores are not included in the Chapter 11 process.