ABC News – TGI Fridays is the latest casual American restaurant chain to announce it has filed for bankruptcy protection in Northern Texas in hopes of “restructuring” the business.
The Dallas-based company filed a voluntary Chapter 11 petition in a Texas federal court on Saturday, a copy of which was obtained by ABC News, saying it would use this time to address legacy liabilities and look for ways to “ensure the long-term viability of the brand” after recently shuttering dozens of locations.
The restaurant, which first opened in New York City in 1965, has faced a slew of operational hardships from increased costs to changing consumer habits brought on by the COVID-19 pandemic that drastically altered the dining landscape.
Rohit Manocha, executive chairman of TGI Fridays, confirmed in a statement that the pandemic was a “primary driver of our financial challenges.”
He called these next steps “difficult but necessary actions” to protect its stakeholders, including domestic and international franchisees, adding that “restructuring will allow our goforward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”
TGI Fridays did not respond to ABC News’ request for additional comment, but according to the press release, “all restaurants will remain open and continue to serve customers as usual” during this time.
The landscape has changed for many casual sit-down eateries in the U.S., including competitors like Red Lobster that recently got cleared to exit Chapter 11 after years of losses with a sale to a new owner.
Financial and retail expert Hitha Herzog explained to “Good Morning America” that Chapter 11 was looming for the casual dining chain after its trustee, Citibank, which had overseen TGI Fridays financing since 2017, terminated its management role earlier this fall.
“The company lost control of several management functions because they lost the trustee — Citibank — who oversaw several management functions terminated its role,” Herzog said …
