TGI Fridays Inc, which owns and operates 39 US restaurants in the TGI Friday’s casual dining chain, on 2 November filed for bankruptcy under Chapter 11.
The company expects to use the time and legal protections in the restructuring process to explore alternatives to ensure the long-term viability of the brand.
Franchises not included in the Chapter 11 process
TGI Fridays Franchisor owns the TGI Fridays brand and related intellectual property and these entities are not part of the Chapter 11 process. The brand has 56 franchisees in 41 countries and these continue to trade.
James Sinclair, CEO of Signature Group Holdings which operates the TGI Fridays brand in Australia, told Franchise Executives “It’s business as usual for TGI Fridays in Australia. We are one of Australia’s most popular restaurant chains, serving more than two million customers each year. Our operations are completely separate, and we have no financial links to the US, so there will be no impact locally from this situation.”
Supporting restaurants
In the US, the franchisor has negotiated a Transition Services Agreement with, and provided interim funding to, TGI Fridays Inc. to maintain support services for franchisees.
In addition to supporting franchise restaurants, TGI Fridays Inc. maintains operations across its corporate-owned restaurants in the US.
Rohit Manocha, executive chairman of TGI Fridays Inc, said “The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world.
“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 company has secured a commitment for debtor-in-possession financing to support operations while proceeding through the Chapter 11 process.
This article has been updated to include a comment from TGI Fridays Australia.
