American fast-casual chain and creator of the Long Island Iced Tea – TGI Fridays – that once had roughly 400 locations internationally, now only has about 85 remaining outlets in the US. This is a significant marker of the chain’s once-glorious reign coming to a quiet end amid financial failings and struggles to stay afloat in a post-pandemic landscape.
Highlights
- A multinational chain that once had over 600 locations worldwide is now closing its doors following an economic downturn.
- TGI Fridays is now looking at franchising all remaining locations as part of their Chapter 11 bankruptcy filing.
- The chain started in 1965 in New York City and served diner-style food such as hamburgers, fries, salads, and chicken wings.
Bankruptcy Filing and Location Closure
TGI Fridays has about $37 million in debt at present (Source: TGI Fridays Official Website)
Even at the start of 2024, TGI Fridays had roughly 270 operational restaurants across the United States. However, the chain filed for Chapter 11 bankruptcy at the end of 2024, when it still had roughly 164 open locations nationwide.
At the time, the brand had about $37 million in debt due to a prolonged spell of reduced sales and store closures. In fact, the chain had lost credibility a long time ago when it started cutting corners by using prepackaged food instead of freshly made items.
As part of their Chapter 11 filing process, they have closed another 30 locations in the past month. The chain has sold dozens of its spots as franchises.
The Way Forward: Transitioning to a Franchise Model
Moving forward, TGI Fridays will be operating under a completely new model. One of the Franchisees is Ray Blanchette, who was once the CEO of TGI Fridays. He was once again reinstated to the position of CEO in 2024. According to a statement by a TGI Fridays spokesperson, since then, Blanchette has established Sugarloaf TGIF Management.
Furthermore, the team at TGI Fridays differs from most brands that have shut shop or cut back operations in the recent past. The brand now has a franchisee advisory board and is being led largely by franchisees, who are responsible for making decisions across the board for the brand. In fact, as per the company representatives, the bankruptcy has affected under 10% of the system.
The spokesperson also stated, “The story about TGI Fridays – the iconic restaurant-bar chain that invented casual dining, the singles bar concept, and the Long Island Iced Tea – is not the closures but the new structure and new strategy.”
Restaurant Closures: A Trend in the Restaurant Industry
The last few decades have seen a significant cutback on discretionary spending due to an increase in restaurant prices and the unexpected downturn of the economy. Consumers prefer ordering takeout or cooking meals at home since they are more affordable options.
Many popular restaurant chains have had to bear the brunt of this shift, even filing for Chapter 11 bankruptcy in order to rework their operations and strategies according to the requirements of the current economic climate. Some of these chains include:
- Red Lobster
- Hooter’s
- Rubio’s Coastal Grill
- On the Border
- Buca di Beppo
Many chains in the restaurant industry are also facing declining sales amidst this economic shift. Some of them include Applebee’s, Denny’s, Red Robin, Cracker Barrel, Outback Steakhouse, and Bonefish Grill. In order to combat the loss, these chains are collectively shutting down operations across several locations within the United States.
