USA | TGI Fridays has filed for Chapter 11 bankruptcy in the state of Texas, despite other locations remaining open around the world.
Global US casual-dining restaurant chain, TGI Fridays has filed for Chapter 11 bankruptcy over the weekend, according to state officials in Texas and confirmed by the company in ta statement.
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. The chain is known for its bar and grill style, and for its extensive menu of hamburgers, chicken wings and its famous cocktail list.
TGI Fridays Franchisor, LLC 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 Inc.'s Chapter 11 process. They are open and serving customers as usual.
To ensure continuity of service to franchisees, TGI Fridays Franchisor, LLC has negotiated a Transition Services Agreement ("TSA") with – and provided interim funding to – TGI Fridays Inc. to maintain support services for franchisees while TGI Fridays Franchisor, LLC works to implement a new long-term support structure.
In addition to supporting franchise restaurants, TGI Fridays Inc. maintains operations across its corporate-owned restaurants in the U.S. 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.
"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," said Rohit Manocha, Executive Chairman of TGI Fridays Inc.
"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 optimised corporate infrastructure that enables them to reach their full potential."
TGI Friday's Australian operator, Signature Group Holdings, said that the Chapter 11 bankruptcy in the US has had no impacts on operations in Australia.
“It’s business as usual for TGI Fridays in Australia. We are one of Australia’s most popular restaurant chains, serving more than two million customers each year. Our operations are completely separate, and we have no financial links to the US, so there will be no impact locally from this situation,” said James Sinclair, Signature Group Holdings CEO.
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