Dive Brief:
- A bankruptcy court in Texas has approved former TGI Fridays CEO Ray Blanchette’s Sugarloaf Concessions as a stalking horse purchaser for nine TGI Fridays restaurants, court records show.
- Sugarloaf proposes to pay $30.5 million for four stores in Maryland and for Fridays’ membership interest in five restaurants in the Dallas Fort Worth Airport.
- Blanchette served as CEO for Fridays from 2018 to 2023, when he resigned after leading off-premise initiatives intended to strengthen the chain after the upheavals of the COVID-19 pandemic. Blanchette’s departure kicked off a run of CEO changes that left the brand bereft of steady leadership throughout much of 2023.
Dive Insight:
Sugarloaf intends to continue operating the restaurants as TGI Fridays, signaling that Blanchette, at least, still has confidence in the strength of the brand despite its recent troubles. According to another court document, the sale will take place at a hearing on Dec. 20.
Sugarloaf’s $30.5 million bid, amounting to about $3.4 million per restaurant, seems a steep price, given the gross sales at Fridays corporate-owned restaurants averaged about $2.6 million in 2023, according to the chain’s franchise disclosure document. Fridays excluded airport restaurants from Item 19 of its franchise disclosure document, so it’s unclear what the sales volumes at its DFW locations are.
Earlier this year, Blanchette bought eight corporate-owned TGI Fridays stores following 36 store closures. Since then, the brand’s closures continued and a proposed merger with Hostmore PLC, its U.K. franchisee was first delayed by changes to the combined firms’ business model, then scrapped when TGI Fridays bondholders carried out a manager termination event against the company. Shortly thereafter, the chain filed for Chapter 11.
Fridays is far from alone in facing a bankruptcy process this year. Buca di Beppo’s stalking horse bidder bought the company for $27 million while Red Lobster’s stalking horse bidder acquired the chain for $376 million.
