TGI Fridays files for bankruptcy

New York (CNN) 鈥� TGI Fridays Inc., the American casual dining chain, filed for Chapter 11 bankruptcy protection Saturday.

The company said in a that fallout from the Covid-19 pandemic was the 鈥減rimary driver of our financial challenges鈥� and it will use the Chapter 11 process to 鈥渆xplore strategic alternatives in order to ensure the long-term viability of the brand.鈥�

鈥淭he 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,鈥� Rohit Manocha, TGI Fridays鈥� executive chairman, said in a statement.

The bankruptcy affects TGI Fridays鈥� parent company, which operates 39 restaurants, and not the franchisees that control the remaining locations. The company has secured financing so all restaurants will operate as usual while it navigates the bankruptcy process.

TGI Fridays has 鈥渟topped the clock on payments of this month鈥檚 rent to landlords and other vendors, giving them breathing room to restructure,鈥� John Bringardner, head of Debtwire, told CNN. He added that the parent company 鈥渨ill likely have to close or sell unprofitable locations as part of the restructuring.鈥�

TGI Fridays got its start in 1965 in Manhattan as a place for singles to meet each other and was one of the first major chains to popularize the 鈥渉appy hour鈥� concept. The menu features a wide array of American comfort food staples, including chicken wings, potato skins and hamburgers.

Diners instantly recognize its kitschy interior with Tiffany-style lamps and big red booths, plus a big bar that鈥檚 usually the focal point of a TGI Fridays. Plus, its service staff wore 鈥渇lair,鈥� or pins and other decorative pieces on their uniforms that became a joke on the 1999 film 鈥淥ffice Space.鈥�

TGI Fridays never fully recovered from the pandemic, which shuttered indoor dining at restaurants for several months. That, plus inflationary pressure on its middle class customers created a financial mess for the nearly six-decade-old chain.

In , TGI Fridays abruptly shut down dozens of locations around the United States and has quietly kept closing restaurants. Last week, it shuttered 50 locations bringing its count down to 163. Prior to that wave of closures this year, TGI Fridays had about 270 US locations.

TGI Fridays is privately owned by TriArtisan Capital Advisors, a private equity firm, so financial results aren鈥檛 released. However, the company said last year that total sales were projected to reach $1.6 billion in 2022 with same-store US sales growing at 8% compared to 2019.

It also changed its menu to keep up with its rivals, notably Applebee鈥檚 and , by adding sushi, refreshing its cocktail menu and giving its appetizer selection a makeover.

In September, TGI Fridays鈥� operations in the United Kingdom also ran into trouble. A proposed acquisition by its UK franchisee fell through and it went bankrupt. It鈥檚 in the process of closing dozens of restaurants in the region and causing 1,000 job losses.

TGI Fridays joins Red Lobster and Buca di Beppo chains, both of which filed for Chapter 11 bankruptcy protection in recent months. However, the latter emerged from bankruptcy and has tapped a to turn the business around.

The-CNN-Wire