(Bloomberg) – Casual dining chain TGI Fridays Inc., struggling with strained customer budgets and restructuring, is preparing to file for bankruptcy protection in the coming weeks, according to people with knowledge of its plans. The company is currently seeking funding. Prefer faster food.
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The company is swarming with lenders to seek financing to continue operating the restaurant and emerge as a commercial company through the Chapter 11 process, the people said, speaking on condition of anonymity to discuss confidential information. It is said that there is.
TGI Fridays is working with lawyers from Ropes & Gray LLP to prepare for bankruptcy, but the plan is not final and is subject to change, according to people familiar with the matter. Representatives for the company and Ropes & Gray did not respond to requests for comment. Debtwire previously reported on the possibility of bankruptcy.
The chain’s obligations include asset-backed securities, which caused an uproar last month when the company’s management violated its terms by failing to provide documentation to bondholders on time. As a result of that breach, they had to hand over control of some of their assets to external managers.
TGI Friday’s is among the casual dining chains that have had to grapple with the reality that popular fast-casual eateries like Chipotle have eroded market share in recent years. Prolonged closures and reduced traffic due to the COVID-19 pandemic have further exacerbated the effects of that trend.
Red Lobster Management LLC filed for bankruptcy in May after years of losses after the loss-making Endless Shrimp promotion was suspended.
Bloomberg recently reported that Hooters, the restaurant chain known for its chicken wings and skimpy server uniforms, has been forced to close stores due to declining profits and is in talks with lenders and advisors.
TGI Fridays began in the 1960s on Manhattan’s Upper East Side, pioneering the idea of singles bars and restaurants that women could go to without having to go on a date. The chain has spread across the U.S. and has decorated its restaurants with a wide range of antiques and memorabilia, many locally sourced, as it has since shed its hat.
—With assistance from Scott Carpenter, Inmanual John Milton, and Carmen Arroyo.
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