By Mrinmay Dey
(Reuters) – TGI Fridays, an American casual dining chain, said on Saturday that it has filed for Chapter 11 bankruptcy protection after grappling with prolonged financial challenges and a collapsed deal with UK-based Hostmore.
In a filing with the U.S. bankruptcy court for the Northern District of Texas, the company listed both assets and liabilities in the range of $100 million to $500 million.
Privately owned by TriArtisan Capital Advisors, TGI Fridays has been a beloved dining destination since its inaugural bar opened in Manhattan, New York, over five decades ago, in 1965.
TGI Fridays, owner and operator of 39 domestic “Thank God it’s Friday!” restaurants, said it maintains operations across its corporate-owned ‘happy hour’ dining places in the U.S., adding that it has secured a financing commitment to support operations.
Rohit Manocha, executive chairman of TGI Fridays, said: “The primary driver of our financial challenges resulted from COVID-19 and our capital structure.
“This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”
In September, British restaurant operator Hostmore dropped plans to buy TGI Fridays after it was removed as the manager of TGIF Funding, which owns the right to collect royalties from the restaurant chain franchise.
Hostmore, which operated TGI Fridays in Britain through its unit Thursdays (UK), saw its shares crash 90% after the news, and later announced its intention to enter administration, overwhelmed by debt.
The administrators of Thursdays (UK) in October said 35 TGI Fridays restaurants in the country have been closed, leading to 1,012 job losses.
After the bankruptcy announcement on Saturday, the Dallas-based chain said normal operations will continue in all of the franchise locations both in the U.S. and internationally.
TGI Fridays Franchisor, which owns the brand and intellectual property, has franchised TGI Fridays to 56 franchisees in 41 countries. The restaurant operator said those stores are independently owned and are not part of the Chapter 11 process.