TGI Fridays, the owner and operator of 39 domestic restaurants in the TGI Friday’s casual dining chain, filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code in the Northern District of Texas. The company expects to use the time and legal protections made available through the chapter 11 restructuring process to allow the company to explore strategic alternatives in order to ensure the long-term viability of the brand._x000D_
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The TGI Fridays brand and related intellectual property are owned by TGI Fridays Franchisor as a result of a securitization agreement with a separate investor group. These entities are not included in the chapter 11 process._x000D_
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TGI Fridays Franchisor has franchised the brand to 56 franchisees in 41 countries. All of these franchise locations, both domestic and international, are independently owned and therefore not included in TGI Fridays’ chapter 11 process. They are open and serving customers as usual._x000D_
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TGI Fridays Franchisor has negotiated a transition services agreement with, and provided interim funding to, TGI Fridays to maintain support services for franchisees while TGI Fridays Franchisor works to implement a new long-term support structure._x000D_
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In addition to supporting franchise restaurants, TGI Fridays maintains operations across its corporate-owned restaurants in the United States. The company has secured a commitment for debtor-in-possession financing to support operations while proceeding through the chapter 11 process. It also filed motions with the bankruptcy court that, when approved, will allow the company to, among other things, continue its customer programs in the normal course. These motions are typical of the chapter 11 process and are expected to be heard and approved in the first days of the case._x000D_
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“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our domestic and international franchisees and our valued team members around the world,” 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.”
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