TGI Fridays files for bankruptcy protection, joining struggling peers

US casual dining restaurant chain TGI Fridays files lawsuit Chapter 11 bankruptcy protection on Saturday, citing a flawed capital structure and joining scores of its peers who have struggled this year amid rising everyday prices and shifting consumer trends.

The chain, recognizable by its red-and-white striped logo and kitschy interior design, has been quietly closing stores since January and closed 50 more last week before filing for Chapter 11 protection.

The Dallas-based company did not disclose the location of the store closures.

There are five TGI Fridays. in Californiaincluding one in Los Angeles near Hollywood Boulevard, according to the company’s website.

TGI Fridays said it operates 39 company-owned restaurants and has secured financing to keep the restaurants open during the bankruptcy. The bankruptcy will not affect the company’s 56 independently owned and operated franchised restaurants.

“The next steps announced today are difficult but necessary actions to protect the interests of our stakeholders,” Executive Chairman Rohit Manocha said in a statement. “This restructuring will enable our promising restaurants to move to a streamlined enterprise infrastructure that will enable them to reach their full potential.”

The impact of the COVID-19 pandemic was also a major reason for the company’s financial difficulties, Manocha said. The chain plans to use bankruptcy protection “to explore strategic alternatives to ensure the long-term viability of the brand,” it said in a statement.

The company did not respond to a request for comment.

TGI Fridays offers customers a wide selection of classic American dishes, as well as milkshakes and sundaes. The chain, which originated in Manhattan in 1965, helped popularize the concept of happy hour and at its peak was a popular destination for celebrations and gatherings.

TGI Fridays bartenders trained Tom Cruise for his role in the 1988 film “Cocktail,” the company boasts, and its waiters’ colorful button-up uniforms were parodied in the 1999 film “Office Space,” starring Jennifer Aniston.

The chain has been owned by private equity firms TriArtisan and Sentinel Capital Partners since 2014 and has not published financial results. According to research firm Technomic, the company’s U.S. sales rejected to $728 million last year, down 15% from the previous year, the Wall Street Journal reported.

TGI Fridays’ problems are part of a dominant trend that has also affected American casual dining chains such as Red Lobster and Denny’s. Experts say middle-class consumers who once frequented such places are cutting back on their spending, while high prices for goods and labor are squeezing profits.

Red Lobster filed for bankruptcy protection earlier this year after shrimp you can eat the fiasco resulted in financial losses; Rubio’s Coastal Grill did the same after suddenly closing 48 locations. in California. In September, fast-casual restaurant Shake Shack closed nine underperforming restaurants, including five in the Los Angeles area.

The Associated Press contributed to this report.