TGI Friday's Seeks New Financing In Preparation For Bankruptcy

TGI Friday's Inc. is seeking financing as the casual dining chain prepares to file for bankruptcy protection in the coming weeks, according to sources familiar with the company's plans.

TGI Friday's is among several casual dining chains facing challenges as fast-casual eateries like Chipotle have eaten into their market share in recent years. I Photo: TGI Friday's

The company has struggled to turn its business around due to customers’ tighter budgets and a preference for faster food, Reshmi Basu and Eliza Ronalds-Hannon reported for Bloomberg News.

The company is in discussions with lenders in search of a loan that would help it continue operating through the Chapter 11 process and emerge as a functioning company, according to individuals who requested anonymity due to the confidential nature of the information.

TGI Friday's is working with lawyers from Ropes & Gray LLP on its bankruptcy preparations, which are not final and could still change.

The chain's obligations include asset-backed securities, which became problematic last month after management breached the terms by failing to file documents to bondholders on time.

As a result, the company had to relinquish control of some assets to an outside manager.

TGI Friday's is among several casual dining chains facing challenges as fast-casual eateries like Chipotle have eaten into their market share in recent years.

Prolonged closures and decreased traffic due to the COVID-19 pandemic further worsened this trend, as reported by Scott Carpenter, Immanual John Milton, and Carmen Arroyo for Bloomberg News.