A new report claims that TGI Friday’s is looking for additional financing as the major restaurant chain prepares to declare bankruptcy.
Bloomberg reported that sources familiar with TGI Friday’s plans indicated that the restaurant chain is trying to obtain additional financing while preparing to file for bankruptcy protection over the next several weeks. The outlet noted that the report comes as the restaurant chain has struggled to improve amid economic strains and a shifting preference toward fast food restaurants.
According to Bloomberg, the anonymous sources said the company was meeting with various lenders in hopes of acquiring a loan that could help the company continue supporting its restaurant locations while completing the Chapter 11 bankruptcy process. The sources told Bloomberg that TGI Friday’s is developing its bankruptcy plan with assistance from lawyers at Ropes & Gray LLP. The sources also indicated that the bankruptcy plans have not been finalized.
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Bloomberg reported that the restaurant chain’s current obligations include asset-backed securities. The outlet also noted that the company was forced to relinquish control of some of its assets to an outside manager after company management failed to file documents with bondholders in a timely manner last month.
According to Fox 10, TGI Friday’s has faced significant struggles over the past few years, including three CEO changes last year. Fox Business recently reported that the restaurant chain had been forced to close 12 locations in the U.S. and an additional 35 locations in the United Kingdom in just the past month.
If TGI Friday’s follows through with its plans to file for bankruptcy in the coming weeks, it will join a growing list of other restaurant chains that have lost business to restaurants like Chipotle that offer a faster eating experience while providing casual food. Bloomberg reported that the COVID-19 pandemic accelerated the downward trajectory of restaurant chains like TGI Friday’s as restaurants were forced to close and operate under significant restrictions for extended periods of time.
According to the restaurant chain’s website, TGI Friday’s, which has been in operation for over 50 years, currently has 213 locations in the United States.
