TGI Friday's files for bankruptcy

Another signature American restaurant is nearing the financial brink. TGI Fridays filed for Chapter 11 bankruptcy protection Saturday in a Texas federal court while it promised to “ensure the long-term viability” of its family dining brand even as it had a bad year of dining room closures in 2024, The New York Post reported.

TGI Fridays Executive Chairman Rohit Manocha tried to explain the company's current adversity in a statement that said the “primary driver of our financial challenges resulted from COVID-19 and our capital structure.” Many traditional restaurants that offer dining-in have yet to recover from the front door delivery practices of the Covid pandemic. Red Lobster has also seen its clientele decline and losses continue. A US bankruptcy judge approved a reorganization plan for the chain in September, The Post noted.

TGI Fridays is on the cusp of its 60th anniversary, having been founded in 1965. By 2008, the chain had 601 restaurants across the US and was generating $2 billion in business. By 2023, sales were down to $728 million. There are 163 restaurants still open, over 100 fewer than the 269 locations of the previous year.

The chain is divided into two branches, with TGI Fridays Inc. owning and operating just 39 of the 461 TGI Friday global locations. TGI Fridays Franchisor owns the right to the brand that it has franchised to 56 independent owners around the world.

There is an epidemic of corporate bankruptcies and store closures in the United States. Big Lots has just filed for bankruptcy. LL Flooring just announced that it is closing all of its 442 stores and Red Lobster – perhaps the best-known seafood chain in America – has filed for bankruptcy but only after shutting down 100 restaurants. About a dozen other restaurant chains are in the same financial situation.