TGI Fridays Is Closing Locations. Could It Be The Next Red Lobster?
TGI Fridays has suddenly closed a large portion of its operating locations, raising concerns that the restaurant is in serious financial trouble. On October 28, 2024, CNN reported that the company shuttered 49 restaurants across multiple U.S. states in the span of one week, bringing its total number of locations from 213 down to 164. This number has dwindled even lower compared to the 270 locations that were open at the start of 2024.
If news of sudden closures were not enough to make fans nervous, there are growing rumors that TGI Fridays will soon be filing for bankruptcy. Informants with close connections to the company informed Bloomberg that it has consulted with lawyers about a potential Chapter 11 filing, after "struggling to turn around a business pressured by customers' tighter budgets and preference for faster food," the outlet wrote.
On the heels of Red Lobster's large-scale closures and bankruptcy filing, the result of risky practices like its ultimate endless shrimp deal, fans of TGI Fridays might fear that their favorite restaurant is next in line. While the chain has not officially confirmed that it will be filing as of the time of publication, large closures do often indicate an attempt to cut costs and avoid shutting down a business. If TGI Fridays has not yet filed, it may have to very soon.
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Can A Restaurant Bounce Back After Filing For Bankruptcy?
If TGI Fridays files for a Chapter 11 bankruptcy, that does not mean the end of the chain is imminent. According to US Courts, Chapter 11 is often called "reorganization" bankruptcy, and allows businesses to continue operating in order to raise money and pay off debts.
Red Lobster is a recent example of how the restaurant business is a major rollercoaster, especially where funding is concerned. After filing for Chapter 11 bankruptcy due to a steady decline of guests and a massive amount of debt, Red Lobster suddenly closed over 50 locations in May of 2024. This sparked major rumors that the chain would be going under for good. In September of the same year, RL Investor Holdings LLC took control of the brand, with hopes of breathing in new life using a budget of over $60 million, per USA Today.
While the seafood restaurant has since emerged from its bankruptcy filing, Red Lobster continues to shutter locations nationwide, so the future of the chain remains unknown. However, its survival is potentially good news for fans of TGI Fridays' famous potato skins and relaxed atmosphere, who can still hold out hope that the casual dining company will stay afloat.
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