TGI Fridays is facing bankruptcy – what happened?

In May, Red Lobster filed for Chapter 11 bankruptcy after a turbulent few years. Buca Di Beppo followed suit this summer. Now another popular restaurant chain is taking the same approach.

Late last week, anonymous sources reported Bloomberg that TGI Fridays was preparing to file for Chapter 11 bankruptcy and was in discussions with lenders that might be able to keep the company afloat in the meantime.

While the restaurant chain is reportedly working with lawyers on bankruptcy preparations, there is no official statement yet from TGI Fridays or its legal representation.

In September, the company lost most of its assets after failing to submit documents to bondholders on time. A few days later, UK-based operator Hostmore decided to back out of its plans to purchase TGI Fridays and promptly closed 35 restaurants. It also filed for bankruptcy under the U.K. version.

However, the company's financial problems are nothing new. The restaurant chain has struggled with slow sales and closures – nearly 50 in the U.S. alone since the start of 2024. There are still 215 locations, but that's a far cry from the 386 restaurants operating as of May 2020.

However, this doesn't necessarily mean the end of TGI Fridays as we know it. Even after a restaurant chain declares bankruptcy, a lot can happen. Red Lobster, for example, is attempting its own comeback. In July, RL Purchaser LLC, which is backed by Fortress Investment Group, provided $376 million to acquire the seafood chain's assets. The deal was later approved by the courts in September, giving the green light to the restructuring.

Red Lobster is certainly not a lost cause; Fortress has a long history of reviving struggling chain restaurants from the trenches of bankruptcy. This has already happened at Logan's Roadhouse, Old Chicago Pizza and Twisted Tenders, all of which were revived after financial difficulties. Maybe they can swing by next and save TGI Fridays.

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