Last week, TGI Fridays filed for bankruptcy protection in Northern Texas, focusing on restructuring the business. The company, headquartered in Dallas, submitted a Chapter 11 petition to a federal court in Texas. This move is intended to manage existing debts and develop strategies to sustain the brand following the recent closure of multiple locations. The filings indicate the company’s assets and liabilities are between $100 million and $500 million.
Established in New York City in 1965, TGI Fridays has encountered several operational challenges recently. These include rising costs and shifts in consumer behavior, largely due to the impacts of the COVID-19 pandemic, which significantly changed the dining industry.
Key Takeaways
- Bankruptcy for Restructuring: TGI Fridays filed for Chapter 11 bankruptcy in Texas to reorganize its debts and restructure operations. This decision follows years of financial challenges, accelerated by COVID-19 impacts on dining habits and operational costs.
- Revenue Decline and Strategic Adjustments: Once a leading chain with $2 billion in revenue, TGI Fridays revenue has fallen to $728 million, partly due to location closures and lower sales per unit. Efforts to revive sales included new menu items, value pricing, and expanded happy hour options, but these strategies struggled against stronger competitors.
- Asset Takeover and Merger Disruption: In 2024, bondholders took over key assets, stopping a planned $220 million merger with UK franchisee Hostmore. This event reduced TGI Fridays’ royalty income and hindered a planned shift toward a franchise-heavy model.
- Franchise Support and Temporary Funding: TGI Fridays Franchisor, LLC will provide short-term funding to support franchisees while TGI Fridays Inc. restructures. This move aims to preserve the company’s franchise operations and stabilize its corporate structure for long-term recovery.

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TGI Fridays Files for Bankruptcy in Texas, Citing COVID-19 and Capital Structure Issues
TGI Fridays has declared bankruptcy in Northern Texas as part of a plan to reorganize the business. TGI Fridays’ Executive Chairman Rohit Manocha stated that the main reasons for its financial difficulties were the impacts of COVID-19 and issues with its capital structure. The company aims to improve its corporate structure to help its restaurants perform better, continued Rohit in a press release.
Since its first branch debuted in Manhattan, New York, in 1965, TGI Fridays, which is owned by TriArtisan Capital Advisors, has enjoyed great success. The brand grew quickly, reaching its highest point in 2008 with 601 US outlets and $2 billion in sales.
However, by 2023, revenue had dropped to $728 million or 15%, showing a sharp decline in the company’s performance due to closing some locations and lower sales per unit, as stated in a court document. The company tried several strategies to improve sales, including introducing virtual brands through C3, launching the Grilled and Sauced menu in 2023, and considering new real estate strategies focused on less capital-intensive hotel expansion.
According to Richter, the company also introduced a new value menu with 10 meals starting at $9.99, boosted its ‘happy hour’ program, offered direct mail promotions, and presented attractive loyalty incentives. Consumer perception of the brand’s pricing improved by 15 percentage points from the first to the second quarter. However, as customers became more sensitive to prices, competitors like Chili’s, who have more resources and are publicly traded, were more effective in promoting their value meals to consumers.

Other post-pandemic shifts in consumer behavior—such as reduced alcohol consumption, increased remote work, and a preference for fast-casual dining options like Shake Shack and Chipotle—have adversely affected the chain’s profitability.
Kyle Richter, the Chief Restructuring Officer at TGI Fridays, mentioned that the company faced challenges in funding national marketing campaigns, which affected its competitive stance against larger chains. He highlighted that Fridays struggled to maintain its market share due to these financial limitations.
In September 2024, the company failed to meet the terms of its bond agreement, leading bondholders to take control of several assets, including restaurant royalties. This move, a manager termination event, interrupted a planned $220 million merger with the UK franchisee Hostmore. The merger was intended to shift TGI Fridays towards a fully franchised business model; however, the takeover of assets halted these efforts.
The loss of assets forced TGI Fridays to forfeit a substantial part of its income, as it could no longer collect revenue from restaurant royalties.
TGI Fridays’ financial troubles were also affected by the end of its relationship with Citibank, which had managed the company’s financing since 2017. Citibank’s absence resulted in a lack of management in key areas such as licensing, franchise operations, personnel decisions, and funding securitization. A permanent successor has yet to be found, and a consulting firm has temporarily stepped in to handle these duties.
Its financial strategy, especially its dependence on “whole business securitization,” played a role in its difficulties. This method involved the issuance of corporate bonds backed by expected cash flows from franchise royalties. Poor financial practices, including payment delays to vendors and a drop in restaurant performance, further destabilized the company’s financial health.
There are currently 163 TGI Fridays restaurants in the US, down from 269 the previous year. The company shut down 36 locations in January and several others over the past week. Most closures were company-owned units; the company operated 140 US restaurants at the start of the year but only 39 remained during the bankruptcy filing—a small part of the 461 TGI Fridays locations worldwide.

Another entity, TGI Fridays Franchisor, holds the brand’s intellectual property and licenses it to 56 independent operators in 41 countries, where the franchised locations continue to run.
TGI Fridays Franchisor, LLC will provide temporary funding to TGI Fridays Inc. to ensure ongoing support to its franchisees as it develops a permanent solution. Manocha described the latest measures as tough but essential to safeguard the interests of the company’s stakeholders, which include franchisees in the US and internationally and its employees worldwide. He emphasized that the restructuring would enable the company’s restaurants to operate with an optimized corporate infrastructure, allowing them to reach their full potential.
This year, over ten restaurant chains, such as Tijuana Flats, Buca di Beppo, and Red Lobster, have filed for bankruptcy. Red Lobster closed more than 106 locations but has now exited bankruptcy and named Damola Adamolekun as the new CEO.
About TGI Fridays
TGI Fridays, founded in 1965 by Alan Stillman and Daniel R. Scoggin in New York City, is a well-known American casual dining restaurant chain famous for its American cuisine and lively atmosphere. “TGI Fridays” stands for “Thank God It’s Friday,” highlighting the brand’s focus on creating an energetic dining experience. As of June 2024, the chain operates over 400 locations in 44 countries, including 163 in the United States. The menu includes a variety of dishes such as sizzling entrees, appetizers, salads, seafood, sandwiches, desserts, and both alcoholic and non-alcoholic beverages.
Ownership of the company has changed over the years; in May 2014, TGI Fridays was acquired by Sentinel Capital Partners and TriArtisan Capital Partners. By October 2019, TriArtisan became the sole stakeholder after purchasing Sentinel’s remaining shares.
Conclusion
TGI Fridays recent bankruptcy filing reflects the broader challenges facing the casual dining industry as consumer preferences and economic conditions shift. COVID-19 and financial and operational issues significantly impacted the brand’s stability, leading to restructuring.
Despite efforts to revitalize sales through menu adjustments and value-based promotions, competition and rising operational costs have intensified financial pressures. The reorganization plan, supported by short-term funding from TGI Fridays Franchisor, LLC, aims to preserve the franchise network and refocus the brand’s business strategy. With effective restructuring, TGI Fridays hopes to stabilize its financial foundation and adapt to the evolving dining landscape, ensuring the franchise’s and its stakeholders’ long-term resilience.