The Casual Dining Chain Cuts Numerous Locations Following Bondholders’ Asset Seizure Last Month
A Significant Reduction in U.S. Locations
Since early September, TGI Fridays has closed at least 60 restaurants in the United States, according to a recent analysis of its store listings. The brand’s website now shows only 164 locations, down from 225 last month when bondholders seized control of the company’s assets. This rapid reduction has led to speculation that TGI Fridays may be considering bankruptcy, as reported by Bloomberg.
Industry Struggles Impacting Casual Dining Chains
Like many other casual dining brands, TGI Fridays has struggled to maintain strong sales as consumers cut back on dining out. High inflation, changing dining habits, and economic pressures have made it difficult for brands like TGI Fridays to attract and retain customers. While other chains, such as Denny’s and Red Lobster, have faced similar challenges with store closures, TGI Fridays has experienced one of the most dramatic declines in recent years.
Failed Acquisition Deal Adds to Challenges
Earlier this year, TGI Fridays was in talks with its UK master franchisee, Hostmore, for a potential acquisition. Hostmore’s goal was to refranchise TGI Fridays’ stores and help turn the brand around. However, the deal fell apart due to internal company issues, allowing bondholders to seize control of Fridays’ assets. This “manager termination event,” as it’s called, is a rare move, marking the first occurrence of such a maneuver since the Great Recession.
A Downward Trend in Store Count
TGI Fridays’ U.S. store count has been in decline since 2020. At that time, the brand had 329 locations; by the beginning of 2023, it had dropped to 269. This year alone, 105 additional stores have closed. The brand has attempted various strategies to combat its decline, including introducing a new menu, adding a virtual sushi brand, and adjusting its loyalty program discounts, but none of these changes have reversed its downward trajectory.
Looking Ahead: Uncertain Future for TGI Fridays
With bondholders now in control and a possible bankruptcy on the horizon, the future of TGI Fridays is uncertain. Despite efforts to refresh the brand and re-engage customers, the restaurant chain is still struggling to find stable footing in a competitive and challenging market. For now, TGI Fridays’ story serves as a reminder of the shifting landscape in the U.S. dining industry and the impact of economic changes on legacy brands.
