TGI Fridays, the popular restaurant chain, has abruptly closed nearly 50 locations within the past week, signaling potential financial trouble as reports of an impending bankruptcy circulate. The closures have reduced the number of operational restaurants from 213 to 164, marking the largest number of closures since January, when 36 underperforming locations were shuttered.
The affected restaurants span several U.S. states, including California, Ohio, New York, New Jersey, Florida, and Missouri. Some closures have resulted in a complete exit from certain cities, such as Columbus, Ohio, and Buffalo, New York. At the start of the year, TGI Fridays had 270 U.S. locations.
The closures come amid reports that TGI Fridays is preparing to file for bankruptcy. Bloomberg reported a few weeks ago that the chain is seeking a cash infusion from lenders to keep it operating while it navigates the Chapter 11 process.
John Bringardner, head of Debtwire, told CNN that TGI Fridays will likely use Chapter 11 to seek a buyer for some portion of its business, reject leases for unprofitable locations, and restructure its debt so it can emerge from bankruptcy with a smaller but still viable footprint. He added that the chain’s dwindling location count, changing consumer preferences, and lower-cost competition from fast food have left the company unable to service its debt. A filing could come in November before the next round of lease payments for its remaining restaurants.
This year, a number of chains filed for bankruptcy, including Red Lobster and Buca di Beppo, as shifting consumer habits and inflation caused diners to reevaluate their spending.
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