After facing a number of financial challenges and failing to recover from the pandemic, casual dining chain TGI Fridays is filing for bankruptcy.
The company filed for Chapter 11 protection on Saturday with the US bankruptcy court in the Northern District of Texas. It plans to use the move as a way to buy time for a restructuring process that would lead to the recovery of its business.
As part of the bankruptcy filing, TGI Fridays disclosed that it has between $100 million and $500 million in assets and liabilities.
“The primary driver of our financial challenges resulted from COVID-19 and our capital structure,” TGI Fridays’ executive chairman Rohit Manocha said 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 move comes after UK restaurant operator Hostmore backed out of a proposed deal to buy TGI Fridays back in September. The deal fell through because TGI Fridays lost its role as a manager of TGIF Funding, an entity that collects royalties from the restaurant chain’s franchise part of the business.
TGI Fridays has been aggressively shutting down its locations throughout the United States in 2024. It closed 36 restaurants early in the year and ceased operation of 11 more in recent weeks. Currently, there are 164 TGI Fridays restaurants in the US compared to 269 locations last year.