TGI Fridays’ troubled U.K. franchisee closed 36 restaurants Monday and sold another 51 to a pair of private-equity firms.
The moves were part of TGI Fridays’ administration process, in which a joint administrator takes over and works to rescue an insolvent company, similar to bankruptcy in the U.S.
Fridays U.K. entered administration Monday with Teneo Financial Advisory acting as joint administrator. Teneo immediately sold 51 restaurants to PE firms Breal Capital and Calveton, which will continue to operate them. The firms have a number of other restaurant investments, including the upscale multiconcept group D&D London. Terms of the deal were not disclosed.
The 36 restaurants not included in the sale were closed, resulting in the loss of just over 1,000 jobs, according to a report from the U.K.’s Insolvency Service.
“The news today marks the start of a positive future for our business following a very challenging period for the casual dining sector as a whole,” said Julie McEwan, CEO of TGI Fridays U.K., in a statement. “We look to the future with confidence that the TGI Fridays brand will continue to attract loyal and new guests.”
It was the latest turn in a disastrous few months for TGI Fridays on both sides of the pond.
Hostmore, the operator of Fridays in the U.K., earlier this year agreed to pay $220 million to buy the U.S.-based franchisor. But the deal was delayed in August after the two sides said they planned to sell their remaining corporate locations to pay down debt.
Less than a month later, a trustee terminated TGI Fridays’ management agreement, turning over control of much of the company’s assets, including its franchise business, to a consulting firm. Hostmore then called off the acquisition, sending its stock price plummeting. In late September, it announced that it was filing for administration, saying it was unable to sell its restaurants for the price necessary to pay down its debt.
TGI Fridays has been struggling in both the U.S. and U.K. amid a tough environment for casual-dining chains—many of which took on debt to get through the pandemic. Several casual chains have filed for bankruptcy this year, including Red Lobster and Buca di Beppo, while others, such as Hooters, appear to be in danger of doing so.
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