TGI Friday's on Saturday became the latest restaurant chain to go belly-up — and blamed its misfortunes on the COVID-19 pandemic and the company's "capital structure."
In a statement, TGI Fridays Inc. said it filed voluntary bankruptcy petitions that cover the 39 fast-casual restaurants it owns and operates in the U.S.
Another 56 franchise outlets in the U.S. and 40 other countries aren't affected and remain open for business, and the chain's brand and intellectual property aren't part of the bankruptcy proceedings in the U.S. Northern District of Texas, the company said.
TGI Fridays Inc. said it planned to "use the time and legal protections made available through the Chapter 11 restructuring process" to "explore strategic alternatives in order to ensure the long-term viability of the brand."
"The primary driver of our financial challenges resulted from COVID-19 and our capital structure," executive chairman Rohit Manocha said. "This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential."
Saturday's filings came after TGI Fridays UK last month entered administration, the British term for insolvency, and closed 35 restaurants, with the other 51 sold off.
The also followed bankruptcy filings this year by Red Lobster, Italian-themed chain Buca di Beppo, fish taco chain Rubio's Coastal Grill, Mexican restaurant chain Tijuana Flats and BurgerFi International, which owns the BurgerFi and Anthony's Coal Fired Pizza & Wings chains.
In September, Red Lobster Management won court approval to exit Chapter 11 protection under new ownership and management following years of declining sales, increased labor costs and its money-losing, $20 "Ultimate Endless Shrimp" promotion.
TGI Friday's, which bills itself as "the world's first casual bar and grill," is owned by TriArtisan Capital Advisors, a private equity company based in New York City.
TriArtisan also owns the P.F. Chang's restaurant chain and HOA Brands, which franchises and operates Hooters restaurants.
