Formerly bankrupt restaurant chain announces major turnaround update
Fernanda Tronco
Tue, January 13, 2026 at 12:37 AM EST
5 min read
A new year is often meant to symbolize fresh starts, but for one of America's most recognizable casual dining brands, 2024 delivered the opposite. Instead of renewal, the year was marked by financial troubles, bankruptcy, and a significant loss of its domestic and international footprints.
Founded in 1965 in New York City, this restaurant chain became a household name by serving classic American bar food and offering popular happy hour drink deals intended to make every day feel like a Friday. For decades, the brand portrayed itself as a lively escape where guests could relax, enjoy indulgent food, and unwind.
But behind that image, the chain had been quietly struggling with years of declining sales and rising costs. Those pressures ultimately reached a tipping point, leaving the company unable to sustain its financial obligations.
TGI Fridays' Chapter 11 bankruptcy and widespread closures
In early 2024, TGI Fridays began closing dozens of underperforming restaurants nationwide, describing the move as a strategic effort to streamline operations and position the brand for long-term growth. However, the closures continued throughout the year, reaching around 50 locations before the company made the announcement it had long feared would come.
In November of that same year, TGI Fridays filed for Chapter 11 bankruptcy protection, citing $37 million in debt. In the court filings, the company attributed much of its financial collapse to the COVID-19 pandemic, which forced it to temporarily close restaurants and suffer the aftermath of consumers' cautious spending.
The bankruptcy filing applied only to company-owned restaurants, not franchise locations. TGI Fridays secured debtor-in-possession financing, allowing restaurants to remain open and continue normal operations during the restructuring process.
At the time of the filing, the brand operated fewer than 40 company-owned restaurants in the U.S., alongside 120 domestic franchise locations, and 316 international units.
TGI Fridays faces international challenges
TGI Fridays' struggles expanded beyond the U.S. In September 2024, Hostmore PLC, the brand's UK franchisee, filed for administration, the UK equivalent of bankruptcy, putting 87 restaurants at risk of closure.
A month later, investment firms Breal Capital and Calveton acquired the UK business, preventing the brand from disappearing from the region entirely. The deal saved 51 locations and thousands of jobs, though 35 restaurants ultimately closed and more than 1,000 employees were laid off.
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In November 2025, 49 UK locations were sold to Sugarloaf TGIF Management, a company founded by TGI Fridays CEO Ray Blanchette, as part of a broader effort to consolidate brand management, as reported by Sky News.
Blanchette, who served as TGI Fridays CEO for five years before stepping down in 2023, later returned to oversee more than 400 franchised locations as the company navigated bankruptcy proceedings, as reported by The Wall Street Journal.
TGI Fridays unveils a new turnaround plan
TGI Fridays is introducing a new turnaround strategy called "1-2-3 Strategic Vision." The plan aims to generate $2 billion in revenue and expand the brand to more than 1,000 restaurants worldwide by 2030 through the successful execution of four key pillars.
TGI Fridays' 1-2-3 Strategic Vision
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Activating the brand: Create memorable guest experiences that foster emotional connections, drive higher traffic, increase check averages, and improve online ratings.
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Flexible growth across markets: Expanding globally through flexible formats and multi-channel growth models, including airport locations, hotel concepts, and traditional full-service restaurants.
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Strengthening the franchise system: Improve franchisee profitability and consistency through stronger support, operational excellence, and strategic partnerships
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Fueling performance through people: Investing in leadership development, training, and performance initiatives to empower team members and franchisees
As part of this initiative, TGI Fridays will continue to invest in menu and beverage innovations, enhance in-store and digital guest experiences, focus on everyday value platforms, and implement restaurant upgrades aimed at supporting long-term growth.
"Our focus as we accelerate our growth is to resonate with the next generation of consumers while preserving the classic Americana feel and signature experience that has made the brand beloved in more than 40 countries," said TGI Fridays CEO Ray Blanchette in a press release.
Broader restaurant industry closures
TGI Fridays is not alone in its struggles; the broader restaurant industry faces persistent and unpredictable challenges that have contributed to the closure of thousands of restaurants worldwide amid rising costs and shifting consumer behavior.
Restaurant chains that have recently closed locations
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Red Lobster: Filed for Chapter 11 bankruptcy in 2024 and shuttered hundreds of locations (Source: The Street)
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Applebee's: Expected to close 20 to 35 restaurants in 2024 (Source: Restaurant Dive)
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Outback Steakhouse: Shuttered 21 restaurants as of November 2025 (Source: CNN)
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Romano’s Macaroni Grill: Recently closed multiple locations, leaving just nine restaurants nationwide (Source: The Street)
Fighting inflation and changing consumer habits with innovation and value
Inflation has played a significant role in the industry's struggles. Prices for food away from home rose 3.7% in the 12 months ending September 2025, according to recent U.S. Bureau of Labor Statistics data.
Over the past five years, food and labor costs for the average restaurant have each increased by around 35%, according to the National Restaurant Association.
To offset those increases, menu prices climbed an average of 31% between February 2020 and April 2025, based on U.S. Bureau of Labor Statistics data.
As prices rise, customer traffic has declined 1% across the food service industry during the quarter ending June 2025, according to Circana.
"This poses a significant challenge for restaurants, as home-cooked meals directly substitute demand for dining establishments, translating to reduced revenues and declines in customer traffic as demand shifts to grocery stores," said Coresight Research analyst Sujeet Naik.
To combat rising costs and softening demand, many restaurants are turning to menu innovation, modernization, and redefined value propositions.
"In response to the decreasing food dollar and the empowered customer, restaurants are turning to innovative business and operating models to grab a greater share of the market," said KPMG Restaurant Segment Leader Paul Fultz and Strategy Leader of Consumer Markets Joel Rampoldt in a study.
"Value is rarely defined only by price," added Circana Senior VP and Industry Advisor for Food and Foodservice David Portalatin in a statement. "Operational excellence in providing quality, affordability, great experiences, and convenience is what leads winning restaurants and their supply chain partners to greater success."
Related: Taco Bell brings back fan-favorite menu Item with a bold upgrade
This story was originally published by TheStreet on Jan 13, 2026, where it first appeared in the Restaurants section. Add TheStreet as a Preferred Source by clicking here.
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