Latest updated October 22, 2024 by

TGIFriday’s Becomes latest Chain On The Chopping Block As Restaurant Prepares For Bankruptcy

TGIFriday's sign

The casual dining industry has been facing headwinds in recent years, with several well-known chains struggling to stay afloat. One such establishment that is currently on the brink of bankruptcy is TGIFriday’s. This iconic restaurant chain, once a staple of…

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The casual dining industry has been facing headwinds in recent years, with several well-known chains struggling to stay afloat. One such establishment that is currently on the brink of bankruptcy is TGIFriday’s. This iconic restaurant chain, once a staple of American dining, has been grappling with declining sales and increasing competition.

TGIFriday’s is not alone in its financial woes. Over the past few months, several other major casual dining chains (and dozens of smaller chains) have also filed for bankruptcy protection.

Red Lobster, a seafood restaurant chain, announced its bankruptcy and struggle to stay afloat. The company was able to restructure its debt and emerge from bankruptcy, but it has faced continued challenges.

Blaze Pizza, a fast-casual pizza chain, also filed for bankruptcy recently. The company attributed its financial difficulties to a combination of factors, including increased competition and rising labor costs. Despite restructuring its operations, Blaze Pizza has struggled to regain its footing.

BurgerFi, a gourmet burger chain, has also followed suit. The company cited the pandemic and rising costs as the primary reasons for its bankruptcy filing.

TGIFriday’s is now in talks with lenders ahead of the Chapter 11, looking for financing to fund them through the process and come out the other side.

According to Bloomberg, the chain could be filing bankruptcy in as little as a few weeks time.

Also putting the chain in a tough spot, is the fact that a proposed acquisition by a UK franchisee fell through leaving them hanging in the balance.

Factors Contributing to Bankruptcy

Several factors have contributed to the financial struggles of these casual dining chains:

  • Increased Competition: The casual dining industry has become increasingly competitive, with new players and fast-casual restaurants offering more affordable and convenient options.
  • Rising Costs: Labor costs, food prices, and rent have been on the rise, squeezing the margins of casual dining chains.
  • Changing Consumer Preferences: Consumers are increasingly seeking healthier, more personalized dining experiences, which can be challenging for traditional casual dining chains.
  • Economic Downturn: The recent economic downturn has also had a negative impact on the casual dining industry, as consumers cut back on discretionary spending.

Over the past year, the chain has been closing stores left and right across the US. This past May, 8 stores were abruptly closed in NJ alone. And in January, 36 underperforming stores across 12 states did the same. And every location in Colorado has shuttered since the start of the year

Last week alone, multiple locations closed across the Northeast in: Clifton Park, Middletown and Poughkeepsie, New York; Allentown, Pennsylvania; Enfield, Connecticut; and Leesburg, Virginia.

Out of the 600 locations that were open from 2023-24, only 200 may remain open as of now.

The Future of TGIFriday’s

As TGIFriday’s faces the prospect of bankruptcy, the question becomes,, can the company successfully restructure its operations and emerge from the crisis? The future of this iconic chain will depend on its ability to adapt to changing times, manage costs effectively, and compete in a challenging market.

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