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Dive Brief:

• TGI Fridays appears to have closed at least 60 locations in the United States since early September, according to a comparison between the number of stores currently listed on its website (164) and the number listed when bondholders seized control of the brand’s assets last month (225).
• The ailing brand may be considering bankruptcy, according to Bloomberg. CNN reported the bulk of the closures occurred in the last week. It’s unclear the extent to which recent closures have impacted primarily franchised units or company-owned stores.
• Fridays, like other casual dining brands, has struggled with sales pressures as consumers have pulled back on spending. The brand was in talks to be acquired by its master franchisee for the United Kingdom, Hostmore, but that prospective deal fell apart. 

Dive Insight:

While other brands, like Denny’s, have closed a large number of stores and some, like Red Lobster, have sought bankruptcy protections, few major brands have seen the scale of closures, executive turnover and high corporate drama that Fridays has in recent years.

At the end of 2020, according to its Franchise Disclosure Document, Fridays had 329 units in the U.S., meaning more than half its system has closed since the end of most COVID-19 pandemic restrictions. Friday’s began this year with 269 locations in the U.S., meaning 105 units, or 40%, of its stores have closed this year. The chain initially closed 36 underperforming restaurants in January.

In 2023, Fridays made two CEO changes as it searched for some way to reverse its sales troubles. The chain tried a comprehensive menu overhaul, the addition of a sushi virtual brand across many of its stores and a reduction in the discounts offered through its loyalty program.

None of those moves generated enough momentum to halt the hemorrhaging of units. 

When Hostmore proposed buying TGI Fridays earlier this year, it did so with the aim of refranchising the brand’s store base. But the Hostmore deal was first delayed and then scuttled entirely. The collapse of the deal was precipitated by a “manager termination event,” a remedy bondholders of the company used to gain control of the assets that backed Fridays’ whole business securitization. 

Such a maneuver is rare. Kroll Bond Rating Agency previously told Restaurant Dive that the manager termination event at Fridays was the first such coup undertaken since the Great Recession.