TGI Fridays files for bankruptcy protection in the US | UK News

Restaurant chain TGI Fridays has filed for bankruptcy protection in the US.

The bankruptcy protection filing was made by TGI Fridays Inc, a Dallas-based American arm of the casual dining brand, which operates 39 restaurants in the US.

It comes after the company faced financial challenges due to the COVID-19 pandemic and after a deal for it to be sold to its UK arm collapsed.

The firm has said its 39 branches would stay open after it secured a financing commitment to support operations.

In its filing with the US bankruptcy court for the Northern District of Texas, TGI Fridays Inc listed both assets and liabilities in the range of $100m (£77m) to $500m (£387m).

Rohit Manocha, executive chairman of TGI Fridays Inc, said: “The primary driver of our financial challenges resulted from COVID-19 and our capital structure.

“This restructuring will allow our go-forward restaurants to proceed with an optimised corporate infrastructure that enables them to reach their full potential.”

The 39 restaurants owned by the company in the US are a fraction of the 461 TGI Friday-branded restaurants around the world.

A separate entity, TGI Fridays Franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries

Those branches, including those in the UK, will also remain open.

The UK franchise had been run by hospitality firm Hostmore before it entered into administration in September – putting 4,500 jobs and 87 outlets at risk.

However, 51 restaurants stayed open and 2,400 jobs were saved in a sale to private investment companies Breal Capital and Calverton.

Months earlier, a £177m agreement for TGI Fridays Inc to be sold to Hostmore had collapsed.

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The deal broke down after the US firm lost control of TGIF Funding, and with it, the royalties from its lucrative franchise agreements and intellectual property.

Founded in 1965, the popularity of TGI Fridays peaked in 2008 with 601 restaurants in the US and a $2bn (£1.5bn) business, according to Kevin Schimpf, director of industry research at Technomic

Its sales in the US were $728m (£563m) in 2023, down 15% from the prior year, according to Technomic.

It now counts 163 restaurants in the US, down from 269 last year. It closed 36 in January and dozens more in the past week.

Sit-down chain restaurants have more broadly faced challenges in recent years as diners choose to get food delivered or visit upscale fast food chains like Chipotle and Shake Shack.