Texas-based casual dining chain TGI Friday’s Inc. has filed for Chapter 11 bankruptcy. The company operates 39 of TGI Friday’s corporate-owned restaurants in the U.S.
It has obtained commitment for debtor-in-possession financing to help keep its business running as it goes through a restructuring process.
It is important to note that the TGI Friday’s brand and related intellectual property are owned by TGI Fridays Franchisor, LLC. TGI Fridays Franchisor, LLC, will not be included in the Chapter 11 process. This means that franchised locations will not be affected by any changes happening with the company — there are 500 franchise locations worldwide, across 41 countries.
What led to this?
The pandemic and changes in how people eat out greatly affected TGI Fridays’ financial situation. There’s been a change in consumer habits. Many consumers prefer dining at home or getting food delivered instead of going out.
Rohit Manocha, the Executive Chairman of TGI Fridays, pointed out that the pandemic and the company’s financials were key reasons behind its struggles. This is a common challenge shared by many restaurants in the industry right now.
Other casual dining chains have also suffered
Other casual dining restaurants have also suffered since the pandemic. Earlier this year, Red Lobster declared bankruptcy amid high costs and changes in what customers want. Other restaurants, like Buca di Beppo and Rubio’s Coastal Grill, also filed for bankruptcy as they try to adapt.
The casual dining industry is facing challenges. Rising costs for things like rent and wages, along with customers being more careful with their spending, have made it hard for restaurants to succeed.
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