TGI Fridays Filed for Bankruptcy — Here's What That Means

TGI Fridays has officially filed for bankruptcy. 

Over the weekend, the restaurant chain filed for Chapter 11 bankruptcy protection, which the company said was due to a decrease in traffic following the Covid-19 pandemic. 

"The primary driver of our financial challenges resulted from COVID-19 and our capital structure," Rohit Manocha, the executive chairman of TGI Fridays, shared in a statement. "This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential."

The filing, CNN reported, will affect the 39 restaurants that are owned by the TGI Fridays parent company but not the franchisees overseeing all other locations. The company has secured financing, so all restaurants will operate as usual while it navigates the bankruptcy process.

According to Manocha, the next steps 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." 

John Bringardner, the head of Debtwire, shared with CNN, he believes the parent company “will likely have to close or sell unprofitable locations as part of the restructuring.”

The chain, Reuters reported, had almost been purchased by Hostmore, a British restaurant operator that operated TGI Fridays in the UK through its business Thursdays. However, it abandoned those plans in September after it was removed as the manager of TGIF Funding, a company that owns the right to collect royalties from the restaurant chain franchise. Reuters noted that 35 TGI Fridays locations in the UK have already closed, accounting for more than 1,000 job losses.

As CNN additionally reported, this may have been a long time coming. In January, TGI Fridays shuttered dozens of locations across the U.S. and slowly plodded away, shutting down more and more throughout the year. In late October, it closed 50 more. Before this wave of closures, CNN reported, it had 270 locations. Now it's down to 163. (According to Inc., there are still 461 TGI Fridays-branded restaurants across the globe.) 

TGI Fridays isn't alone in its 2024 bankruptcy filing. Red Lobster famously did so in May, with the company's chief executive Jonathan Tibus stating it was “the best path forward ... It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.” He added that, just like TGI Fridays, the hope is to conclude its restructuring “quickly and efficiently while remaining focused on our employees and guests.”