TGI Fridays has become the latest restaurant chain to file for bankruptcy this year, amid a surge in bankruptcies that could make 2024 the worst year for the industry aside from 2020, when the COVID-19 pandemic triggered widespread economic disruptions.
In a statement released on Saturday, TGI Fridays announced its decision to file for bankruptcy. The company reassured customers that its restaurants would remain operational as the business undergoes restructuring. The filing excludes the company’s 56 franchises, which will not be affected. TGI Fridays currently operates 39 locations nationwide.
“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 the company’s Executive Chairman, Rohit Manocha. “The primary driver of our financial challenges resulted from COVID-19 and our capital structure.”
Speculation that TGI Fridays might seek bankruptcy protection began last month as reports surfaced of ongoing financial struggles. The filing also follows a string of recent bankruptcies among other dining chains, including Red Lobster.
According to a report by The Daily Wire, 2024 is on track to record the highest number of restaurant bankruptcies aside from 2020. Industry data shows that visits to casual dining restaurants have declined by 4.5 percent from 2023 to 2024. Rising costs have left many Americans feeling that dining out has become too expensive, contributing to the downturn in the sector.
Restaurants have also cited rising food and utility costs for recent financial struggles. This comes as states like California, for example, have raised the minimum wage for fast-food workers at chains with more than 60 locations. The restaurant chain Rubio’s was forced to file for bankruptcy after closing 48 underperforming restaurants in California following the wage increase.
