The American casual restaurant chain TGI Fridays requested Chapter 11 bankruptcy protection on Saturday, citing a flawed capital structure and joining a host of its peers that have struggled this year in the face of rising everyday prices and shifting consumer trends.
The chain, known for its red-and-white striped logo and kitschy interior design, has been quietly closing locations since January and closed 50 more last week before filing for Chapter 11 protection.
The Dallas-based company has not revealed the locations where stores will close.
There are five TGI Fridays in California, including one in Los Angeles near Hollywood Boulevard, according to the company's website.
TGI Fridays said it operates 39 company-owned locations and has secured financing to keep the restaurants open during the bankruptcy. The bankruptcy will not affect 56 franchised restaurants, which are independently owned and operated.
“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders,” Chief Executive Rohit Manocha said in a statement. “This restructuring will allow our future restaurants to continue with a streamlined corporate infrastructure that allows them to reach their full potential.”
The fallout from the COVID-19 pandemic has also been a major driver of the company's financial difficulties, Manocha said. The chain plans to use its bankruptcy protection “to explore strategic alternatives to ensure the long-term viability of the brand,” according to the statement.
The company did not respond to a request for comment.
TGI Fridays offers customers a wide variety of classic American entrees along with shakes and ice cream. The chain, which began in Manhattan in 1965, helped popularize the concept of “happy hour” and in its heyday was a popular place for celebrations and gatherings.
TGI Fridays bartenders trained Tom Cruise for his role in the 1988 movie “Cocktail,” the company boasted, and its bartenders' colorful, button-studded uniforms were parodied in the 1999 movie “Office Space,” starring Jennifer Aniston.
The chain has been owned by private equity firms TriArtisan and Sentinel Capital Partners since 2014 and does not publish financial results. According to market research firm Technomic, the company's U.S. sales refused to $728 million last year, down 15% from the year before, the Wall Street Journal reported.
TGI Fridays' problems are part of a pervasive trend that has also affected American casual dining chains such as Red Lobster and Denny's. Middle-class consumers who once frequented such places are cutting back on discretionary spending, experts say, and the high price of goods and labor is eating into profits.
Red Lobster filed for bankruptcy earlier this year after a shrimp all you can eat The fiasco contributed to financial losses; Rubio's Coastal Grill followed suit after abruptly closing 48 locations in California. Fast-casual burger joint Shake Shack closed nine underperforming restaurants in September, including five in the Los Angeles area.
The Associated Press contributed to this report.
