The confirmation that TGI Fridays has filed for bankruptcy under Chapter 11 was made on November 2nd. Despite the fact that the case only affects the 39 company-owned locations of the brand, TGI Fridays has said that it has acquired funds to ensure that those restaurants continue to operate properly during the Chapter 11 process.
Additionally, the franchised stores of the company continue to operate normally and continue to serve consumers. In an attempt to bring the chain back to life, the firm intends to reorganize its financial situation via the process of filing for bankruptcy.
In a statement, Rohit Manocha, executive chairman of TGI Fridays Inc., called the following measures that were announced today “difficult but necessary actions to protect the best interests of our stakeholders.” These stakeholders include our domestic and foreign franchisees as well as our valued team members all around the globe. Both COVID-19 and our capital structure were the key factors that led to the difficulties we had with our finances.
Because of this restructure, our restaurants that are moving ahead will be able to go forward with an efficient corporate infrastructure that will allow them to fulfill their full potential.
According to the information that can be seen below, our first article, which was published on October 22nd, addressed allegations that the chain was contemplating filing for bankruptcy.
Red Lobster and Buca di Beppo are just two of the many well-known sit-down restaurant groups that have filed for bankruptcy in 2024. The list of troubled restaurant franchises continues to increase year. Currently, it is possible that a further well-known casual dining chain may follow in the footsteps of these enterprises and file for bankruptcy; the filing might take place very soon.
On October 19, Bloomberg reported that TGI Fridays was making preparations for a likely Chapter 11 bankruptcy file in the coming weeks. The article cited persons who were acquainted with the subject and wished to remain anonymous. According to the individuals who spoke with the article, TGI Fridays is now talking to lenders in an effort to get a loan that would allow it to continue operating its restaurants during the potential bankruptcy process.
It has been revealed that the corporation is preparing itself for bankruptcy by dealing with attorneys from the firm Ropes & Gray LLP. Additionally, earlier this month, Debtwire revealed that TGI Fridays was investigating the possibility of filing for bankruptcy filing. On the other hand, Bloomberg was informed by the unidentified sources that the preparations for the bankruptcy are not yet finalized and may yet undergo significant changes.
Not only did TGI Fridays lose possession of the majority of its assets only one month ago, but it also failed to submit documentation with bondholders in a timely manner, which led to the bankruptcy reports being filed during a difficult moment for the company. Just a few days later, Hostmore, a TGI Fridays operator located in the United Kingdom, decided to abandon their aspirations to acquire the company. Following that, Hostmore shut down thirty-five restaurants and submitted a petition for the equivalent of bankruptcy in the United Kingdom.
In addition, TGI Fridays has been experiencing difficulties in terms of sales growth and closures for a number of years. According to Restaurant Business Magazine, the company has closed over fifty stores in the United States alone since the beginning of 2024. There are presently 215 restaurants that it runs in the United States, which is a significant decrease from the 386 sites that it had in May of 2020.
In response to our inquiries for confirmation and comment on the bankruptcy preparation rumors, TGI Fridays did not immediately provide a responding response.
If it turns out that TGI Fridays will be filing for bankruptcy in the near future, this would be only a few months after Red Lobster revealed that it will be filing for Chapter 11 bankruptcy in order to solve both financial and operational concerns. During the unfortunate Ultimate Endless Shrimp campaign that took place in 2023, the seafood company, which has been struggling for years with excessive expenses and operational deficits, was dealt a particularly severe dose of the negative consequences.
In the time since then, Red Lobster has been able to successfully emerge from bankruptcy and find a new owner.
In the meanwhile, Buca di Beppo, the second large sit-down restaurant that is expected to declare bankruptcy in 2024, submitted a petition for protection under Chapter 11 in August. The firm attributed its financial difficulties to a number of factors, including falling sales, rising expenses, difficulties with personnel, and shifting tastes among customers.
Buca di Beppo, on the other hand, has been able to focus on reorganizing the firm while simultaneously improving operations and the overall experience for customers as a result of the bankruptcy case.