TGI Fridays Inc., owner and operator of 39 national restaurants owned by the casual dining chain, filed an application Chapter 11 Bankruptcy protection in the Northern District of Texas, marking another setback for the embattled United States restaurant industry.

The request comes at a critical time for the nearly 60-year-old chain, which already closed 50 locations last week, reducing its total U.S. presence to 163 restaurants from around 270 at the start of 2024.

Notably, the brand’s intellectual property, owned by TGI Fridays Franchisor, LLC under a securitization agreement with a separate investor group, is excluded from the bankruptcy proceedings.

News week contacted TGI Fridays’ press contact via email on Saturday for comment.

“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 valued team members around the world,” said Rohit Manocha, president executive of TGI Fridays Inc., in a press release. statement.

Manocha identified the Covid-19 pandemic and the company’s capital structure as the main drivers of their financial challenges.

The once-popular restaurant chain, which began in 1965 in Manhattan as a singles bar that helped popularize the concept of “happy hour” and decorative “style” for its employees, has secured debtor-in-possession financing to maintain its operations during the restructuring process. .

The company also filed motions with the bankruptcy court to continue its customer programs without interruption.

For the chain’s extensive franchise network – spanning 56 franchisees in 41 countries – operations will continue as usual. TGI Fridays Franchisor, LLC has implemented a transitional services agreement and provided interim financing to maintain support services while developing a new long-term support structure for its franchise operations.

The bankruptcy filing follows recent problems in the company’s international operations. In September, the UK division of TGI Fridays faced its own crisis, leading to the closure of several restaurants and around 1,000 job cuts after a proposed acquisition by its UK franchisee collapsed.

TGI Fridays joins other victims of casual dining in the post-pandemic era, including Red lobster And Buca di Beppowhich also filed for Chapter 11 protection in recent months.

The chain’s restructuring efforts come amid broader challenges facing the restaurant industry, including changing consumer preferences, inflationary pressures and the lasting impact of COVID-19 restrictions .

“This restructuring will ensure our future restaurants have an optimized business infrastructure that will enable them to reach their full potential,” Manocha added.

The bankruptcy court must still approve various motions to allow the company to maintain normal business operations during the restructuring process.

Although the immediate future of the 39 company-owned locations remains uncertain, the company’s franchise network continues to operate independently under the protection of bankruptcy proceedings.