Casual dining chain TGI Fridays Inc. filed for Chapter 11 bankruptcy in Texas on Saturday with the company's executive chairman saying it still has not fully recovered from the COVID-19 pandemic.
The bar and grill chain, known for serving up hamburgers, loaded potato skins and $5 happy hour drinks, said the move was done to "address legacy liabilities and position restaurants for long-term success," the company said in a press release.
The Dallas-based company says 39 of its corporate-operated domestic restaurants would remain open. TGI Fridays is short for "Thank God it's Friday."
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Additionally, the company has franchised the brand to 56 franchisees in 41 countries. All of these franchise locations, both domestic and international, are independently owned and therefore not included in TGI Fridays Chapter 11 process, the company said.
The company says it expects to use the time and legal protections made available through the Chapter 11 restructuring process to explore strategic alternatives in order to ensure the long-term viability of the brand.
"The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world," TGI Fridays Inc executive chairman Rohit Manocha said in a statement.
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"The primary driver of our financial challenges resulted from COVID-19 and our capital structure. This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential."
The Company says it has secured a commitment for debtor-in-possession financing to support operations while proceeding through the Chapter 11 process.
The TGI Fridays brand and related intellectual property are not included in the Chapter 11 filing due to a securitization agreement with a separate investor group, the company says.
The company closed 12 U.S. locations and shuttered 35 restaurants abroad in recent weeks.
In January, the brand closed 36 of its restaurants across the U.S. which were "underperforming," claiming it was part of a long-term growth strategy to ensure viability.
It also sold eight of its corporate-owned restaurants to its former CEO Ray Blanchette that month, with the company adding that this "era of transformation" will help drive continued revenue for the chain.
TGI Fridays has been serving its customers for more than 50 years.
The company says it currently operates more than 461 restaurants in 41 countries serving "high-quality, classic American food and iconic drinks backed by authentic and genuine service.’
Fox News’ Kristen Altus and Daniella Genovese contributed to this report.
