Casual restaurant chain TGI Friday’s Inc. filed for bankruptcy protection after struggling to turn around a business pressured by increasingly cost conscious consumers who’ve either become more selective when dining out, or prefer competitors that provide faster food.
The company filed Chapter 11 on Nov. 2 in the Northern District of Texas, listing assets of between $100 million and $500 million and liabilities of between $100 million and $500 million on its bankruptcy petition.
“The primary driver of our financial challenges resulted from Covid-19 and our capital structure,” Rohit Manocha, the chain’s executive chairman, said in a separate statement.
The filing comes after Bloomberg News earlier reported that TGI Friday’s was gauging its options to continue funding its restaurants during a Chapter 11 restructuring. On Saturday, the company said it secured a commitment for debtor-in-possession financing.
TGI Friday’s is the latest casual dining outlet to seek court protection as the sector continues to grapple with faster competitors like Chipotle. Lower-cost restaurant chains have also felt the pinch from rising housing costs and high inflation on consumers, who’ve increasingly opted to eat at home in order to save money.
Red Lobster Management won court approval in September to leave Chapter 11 under new ownership, hoping to rebound from years of declining sales, costly leases and a money-losing “Ultimate Endless Shrimp” promotion.
The Italian-themed chain Buca di Beppo, fish taco chain Rubio’s Coastal Grill, and Mexican restaurant chain Tijuana Flats have also filed for bankruptcy this year.
TGI Friday’s operates 39 restaurants in the US. Its brand and intellectual property are owned by TGI Fridays Franchisor LLC, which has 56 franchisees in 41 countries and isn’t included in the Chapter 11 filing, the company said.
The US bankruptcy case is TGI Friday’s Inc. 24-80069, US Bankruptcy Court Northern District of Texas.