Restaurant chain TGI Fridays filed for bankruptcy protection Saturday, saying it is looking for ways to “ensure the long-term viability” of the casual dining brand after closing many of its branches this year.
The Dallas-based company's Chapter 11 filing in a Texas federal court accelerates a gradual decline for an iconic chain that was once at the center of American pop culture but has seen its customer base dwindle as tastes changed.
The company has boasted that its bartenders trained Tom Cruise for his role in the 1988 film “Cocktail.” Its serving staff's button-filled uniforms, meant to evoke a fun atmosphere, were later parodied in the 1999 satire “Office Space” starring Jennifer Aniston.
TGI Fridays Executive Chairman Rohit Manocha in a statement said the “primary driver of our financial challenges resulted from COVID-19 and our capital structure.”
Sit-down chain restaurants have more broadly faced challenges in recent years as diners choose to get food delivered or visit upscale fast food chains like Chipotle and Shake Shack.
A U.S. bankruptcy judge in September approved a reorganization plan for seafood chain Red Lobster after years of mounting losses and dwindling customers.
Founded in 1965 in Manhattan as a cocktail bar and restaurant, TGI Fridays expanded over the following decades to become an ubiquitous suburban gathering spot known for its ribs, potato skins topped with cheese and bacon, and a decor bedecked with red stripes and Tiffany-style lamps.
Its empire peaked in 2008 with 601 restaurants in the U.S. and a $2 billion business, according to Kevin Schimpf, director of industry research at Technomic. Its sales in the U.S. were $728 million in 2023, down 15% from the prior year, according to Technomic.
It now counts 163 restaurants in the U.S., down from 269 last year. It closed 36 in January and dozens more in the past week.
TGI Fridays Inc. said it only owns and operates 39 restaurants in the U.S., which is just a fraction of the 461 TGI Friday-branded restaurants around the world. A separate entity, TGI Fridays Franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries. Those remain open.