Restaurant chain TGI Fridays has filed for bankruptcy protection in the United States.
The filing for bankruptcy protection was filed by TGI Fridays Inc., the American arm of the Dallas-based casual dining brand, which operates 39 restaurants in the United States.
This comes after the company faced financial challenges due to the Coronavirus (COVID-19) pandemic and after the collapse of its deal to sell it to its UK arm.
The company said its 39 branches will remain open after obtaining a financing commitment to support operations.
In its filing with the US Bankruptcy Court for the Northern District of Texas, TGI Fridays Inc listed assets and liabilities ranging from $100 million (£77 million) to $500 million (£387 million).
“The primary driver of our financial challenges resulted from COVID-19 and our capital structure,” said Rohit Manocha, CEO of TGI Fridays Inc.
“This restructuring will allow our leading restaurants to move forward with improved corporate infrastructure that enables them to reach their full potential.”
The 39 company-owned restaurants in the United States represent a small portion of the 461 TGI Friday-branded restaurants worldwide.
A separate entity, TGI Fridays Franchisor, owns the intellectual property and has franchised the brand to 56 independent owners in 41 countries.
These branches, including those in the UK, will also remain open.
The UK franchise was managed by hospitality company Hostmore before it went into administration in September – This puts 4,500 jobs and 87 outlets at risk.
However, 51 restaurants remained open and 2,400 jobs remained open Reserved for sale to private investment companies Brial Capital and Calverton.
Months ago, a £177m agreement to sell TGI Fridays Inc to Hostmore collapsed.
Read more business news
Chelsea co-owner, Bohle, enters into competition with Lord’s Cricket Show
Investment giant KKR is fighting a battle for its life in Thames waters
The deal collapsed after the US company lost control of TGIF’s financing, and with it the proceeds from lucrative franchise agreements and intellectual property.
Founded in 1965, TGI Fridays’ popularity peaked in 2008 with 601 restaurants in the US and a $2bn (£1.5bn) business, according to Kevin Schimpf, director of industry research at Technomic.
Its US sales were $728m (£563m) in 2023, down 15% on the previous year, according to Technomic.
It now has 163 restaurants in the United States, down from 269 last year. 36 closed in January and dozens more in the past week.
Chain restaurants have faced broader challenges in recent years as diners opt for delivery or visit upscale fast-food chains like Chipotle and Shake Shack.