It has recently been announced that the owner and operator of 39 domestic restaurants in the TGI Friday’s casual dining chain has filed for voluntary Chapter 11 bankruptcy to address the legacy and longterm success of the brand. As the world’s first casual bar and grill, TGI Friday’s has been a go-to destination for after-work libations, family dinners and group celebrations for over 50 years. Now looking to the next 50 years, the company will be using the legal protections provided through Chapter 11 to restructure the brand and explore strategic alternatives to ensure longterm success.
To clarify things further, the TGI Friday’s brand and related intellectual properties, which are owned by TGI Fridays Franchisor, LLC, will not be included in the Chapter 11 process. Over the years, TGI Friday’s Franchisor, LLC has franchised the brand to 56 franchisees in 41 countries, all of which are independently owned and not included in the present Chapter 11 filings. These locations are currently open and serving customers as per usual.
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In an effort to ensure its brand continuity of service across all franchisee locations, TGI Fridays Franchisor, LLC has negotiated a “Transition Services Agreement” (TSA) with TGI Fridays Inc. This agreement will not only provide interim funding to TGI Fridays Inc., it will also maintain a support service system for franchisees while TGI Fridays Franchisor, LLC works on implementing its new, longterm support structure.
As is normal to Chapter 11 filings, the company has secured a “commitment for debtor-in-possession financing” to support operations while working through the bankruptcy process. This will help the company maintain operations across its corporate owned restaurants while supporting franchise restaurants at the same time. Further motions were also filed with the Bankruptcy Court that, if approved, allow TGI Fridays to continue its customer programs as per usual.
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In a November 2 press release, Executive Chairman Rohit Manocha said, “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.” Monocha then added, “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.”
Those interested in learning more about the impending Chapter 11 proceedings can find a full breakdown of details here, with additional information, including information on claims, here. Consumers can also reach the company’s noticing and claims agent, Stretto, at (833) 505-4418 (for toll-free U.S. and Canada calls), (714) 886-6213 (for tolled international calls) or by emailing TeamTGIFridays@stretto.com.
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