With its roots as one of the first singles bars in Manhattan, TGI Fridays was the place to be back in the day, known for training Tom Cruise for his bartending role in Cocktail and introducing the world to Happy Hour!
Now TGI Fridays, the once-vibrant go to restaurant chain has filed for Chapter 11 bankruptcy.
I did notice that a few of my local TGI Fridays had gone missing and knew something was up, but not all of them. Sure hard to miss that iconic red and white logo in a drive by. And sure hard to forget how much good commotion went on at those happy hours back in the day. If you don’t know the whole entrepreneurial backstory of TGI Fridays, its surely worth your time to check it out on Wikipedia.
Business expert Parag Amin joined The Debbie Nigro Show to discuss the news and dig into what’s going wrong—and what might come next for the beloved brand. Here’s a quick summary of our fascinating conversation.
The Rise and Fall of TGI Fridays
In the beginning, TGI Fridays was a hot spot for singles in New York City. It was all thanks to founder Alan Stillman, who opened the first location with hopes of meeting the local ladies. From its humble beginnings, Fridays became a national phenomenon, famous for its fun atmosphere and flair bartenders.
Over time, however, the brand shifted to family dining, and the unique vibe that once set it apart started to fade.
Why the Struggle? The Changing Face of Casual Dining
Parag Amin explained how the casual dining landscape has evolved. With more competitors entering the market, restaurants need a clear draw. TGI Fridays seemed to lose its sense of “destination dining”—the “I need to go there” factor that keeps people coming back. While other spots like Yard House have found new ways to attract both socializers and families, TGI Fridays struggled to find its footing.
Can TGI Fridays Make a Comeback?
So, what’s next? According to Parag, this could be the perfect opportunity for TGI Fridays to rebrand and bring in a fresh vision. I’ve heard Tuesday is the new Friday, and hinted new “TGIT” or “TGI Tuesday” specials could be a fun twist on their original concept. Or TGI Sundays. Whatever happens, Parag says they’ll need to rediscover the magic that made Fridays a destination in the first place.
Not All Fridays Are Closing
Before you mourn your favorite neighborhood Fridays, don’t worry—not all locations are shutting down. While corporate-owned locations are restructuring, franchise-owned restaurants remain open and are not part of the filing. So, you may still be able to snag those famous potato skins or a signature cocktail at your local Fridays.
TGI Fridays Will Be Spending Many Days on Their What’s Next
If there’s a silver lining here, it’s that Chapter 11 gives TGI Fridays a chance to regroup and possibly reinvent itself. With the right strategy and perhaps a new CEO, this iconic brand could still find its way back to relevance—and maybe even reclaim some of its original “cool factor.”
Enjoy this podcast of my live conversation with business expert Parag Amin on The Debbie Nigro Show, about the surprising history, current state, and future possibilities of the iconic TGI Fridays brand.
Parag Amin is the founder of the ‘Law Office of Parag Amin’. He is a business expert and an attorney who represents public figures, small business owners, and individuals in a variety of business matters.
Tune in weekdays 11-12noon EST to The Debbie Nigro Show on WGCH Radio for more business insights and more lively conversations!
AUDIO TRANSCRIPT:
0:00:00
And now, back to the Debbie Nigro Show.
1
0:00:07
Hi guys, welcome back to the show. I’m Debbie Nigro and you know I try and keep you relevant and talk about things that are going on. So TGI Friday’s restaurant chain filed for Chapter 11 bankruptcy over the weekend and bankruptcy protection, and they blamed COVID and a bunch of other things and you know they closed about a hundred restaurants in the United States and they’ve lost control of most of their assets. They had this potential sale fall apart and lots of stuff was leading up to this.
1
0:00:57
But not all the TGI Fridays are closing and it’s good because I have great fondness for this chain. I loved it. I don’t know if you guys know, but if you’ve ever seen the movie Cocktail with Tom Cruise, I’m talking backwards today. The cool factor was so strong about TGI Friday’s that its bartenders trained Tom Cruise for his role in the movie Cocktail that came out in 1988.
1
0:01:27
You know, it was one of the first singles bars, it was one of the great ambiance for fun and connecting and then it turned into a family restaurant. But you know, here we go. It’s in the news today because it’s part of a casual dining casualty list that keeps kind of adding up. I wanted to talk about this with somebody who is smarter than me.
1
0:01:46
So you’re about to meet my guest, Parag Amin, the founder of the Law Office of Parag Amin. He earned his law degree from the University of Southern California’s Gould School of Law. He has a Bachelor of Science degree in Finance from the University of Maryland. He is a business expert and an attorney who deals in business issues like this. He’s represented all kinds of public figures and business owners, so I wanted him to weigh in. Parag, welcome to my show.
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0:02:14
Good morning, Debbie. Thank you for having me.
1
0:02:17
Parag, did you ever go to a TGI Fridays when it was happening?
2
0:02:22
When it was happening could be a bit of a stretch. It’s been a few years since I’ve been. As a kid, I had gone and it seemed like it was happening, but I’ll tell you, Debbie, I think since I’ve been an adult, I don’t know that it was really that happening. I think that’s part of the reason that we’re seeing this Chapter 11 filing and this restructuring of PGI Fridays as we see it today.
1
0:02:45
As a business guy, you know what happens. Somebody gets a really good idea. This all started with an amazing vision from a guy named Alan Stillman who was living down in Manhattan who wanted to meet women. He lived right next to a whole slew of stewardesses and all these women. He was like, how am I going to meet these women? So he opened a bar. He took $5,000 of his own money and $5,000 he borrowed from his mother. He opened up TGI Fridays because he renamed the place that he used to go to, the good tavern, the corner of 63rd and 1st, and he was like,
1
0:03:16
wow, and it was a huge thing, because now women were coming into places where they may not have thought to go in before to socialize, and he was trying to get people to come together, but as happens with a lot of great starts, things become so successful that more people
1
0:03:34
with more money want to get in the game, and now the franchise thing starts to happen and before you know it, the original idea has blown up and it’s either a good thing or a bad thing. Do you know the story of how it got to today and why it’s going away?
2
0:03:50
Well, so part of it is TGI Fridays has reinvented itself and as you very aptly put it, Debbie, it did originally start as more of a bar for singles and people could come mingle, maybe go for happy hour, and they actually originated this idea of the happy hour and then made it what it is today. But it then reinvented itself
2
0:04:13
to more of a family dining restaurant. And the challenge has become, and it’s changed hands and ownership as well. And the biggest challenge has become there’s more entrance into the marketplace, including other casual dining places, as well as the difficulty of scaling a business
2
0:04:33
like this and franchising and ensuring that you have consistent service and quality across the market, as well as making sure that it continues to be profitable. I think the biggest challenge that TGI Friday had was it stopped completely understanding what people want.
1
0:04:57
What do people want? People’s desires change, right? I know there’s a shift in the way Americans are dining in general, but tell me from your
2
0:05:07
perspective what changed that they didn’t have a core draw for their audience. What I mean is, when you think about, if you’re going to TGI Fridays, you’re not stopping by there as somewhere where it’s a quick bite to eat. It really needs to be a destination. And so now there’s less than 200 locations nationwide. It’s not like, it’s not fast food.
2
0:05:41
So you have to make it a point to go there. You have to have a draw to go there. And what is the draw is that your family, your friends have to want to go there and meet you there. I mean, Debbie, you’re a big fan of TGI Fridays. I mean, when was the last time you went
2
0:05:56
or had somebody invite you to TGI Friday for a lunch or dinner?
1
0:06:00
It’s so true. In fact, the one I used to pass always Kind of great big location which was in a place called Central Avenue in scars daily onkers Whatever as I was driving by one day go wait a minute wasn’t there a TGIF there, and I literally It was a afterthought. I never went as many times as I thought I should maybe pop in but you’re right It just always an afterthought. It wasn’t like the destination.
1
0:06:26
But let’s talk about the locations because the 56 restaurants that are owned by independent operators are not part of this bankruptcy filing, meaning that the company, right, owns I guess 39 locations that are going to remain open during the restructuring process. And then there were 56 restaurants I read that are owned by independent operators and not part of the filing. How many are left altogether? Like what are we dealing with
1
0:06:52
here?
2
0:06:53
Yeah, so we’re going to have less than 200 left. Right now, my recollection is about 163 or so that’s going to remain open. But with Chapter 11, the way it works is that they’re going to restructure, meaning it’s, if you think of a game, if you think of a football game, they’re essentially calling timeout before the game ends. So what they’re trying to do is they’re trying to buy some time to be able to restructure their debts,
2
0:07:19
restructure what they owe in terms of expenses while still remaining in possession. So Chapter 11 is a debtor in possession, meaning they can continue operating the restaurants, but it gives them some breathing room from the creditors that are knocking at their door,
2
0:07:36
which will include the landlords for the locations where these TGI Fridays are located.
1
0:07:41
Okay, I get that. That was a good analogy. So that’s still a lot of restaurants, okay. I read and I don’t know if our numbers are, you know, in sync here but I read that TGI Fridays has 95 restaurants in the U.S., 39 of which they own and operate and the other 56 are independent franchises not involved in this.
1
0:08:02
Are my numbers correct so far? You said 200.
4
0:08:05
Well, my understanding is,
2
0:08:06
at least according to the technology, that currently there are 163, which is down from 269 last year. In terms of the breakdown of independently owned versus corporately owned, I’d have to double check on those.
2
0:08:21
Okay. But as a business advisor guy,
1
0:08:25
you know, you’ve been involved in a lot of deals. How does the news of a bank bankruptcy filing affect those independent franchises who are not involved in terms of, you know, their people’s perception of them?
2
0:08:40
Well, I mean, certainly filing from bankruptcy has a negative perception. And when it comes to franchises, the franchisees pay the franchise or a certain amount of money for support and operations. But a lot of times what happens is the franchisor, in this case corporate, will continue collecting fees from the franchisees. So the franchisees generally once they’ve got their business up and running, many times unfortunately will just suffer the negative consequences of a bankruptcy filing such as this where people might see
2
0:09:16
it and say well you know nobody is really going to TGI Fridays and it creates this downward spiral where people are even less likely to go now than they were before.
1
0:09:28
Does the cost of what they were charging for food have anything to do with their challenges? Did they raise the prices to be stupid?
2
0:09:37
Well it’s certainly a component of it. I mean, of course, any restaurant needs to be competitive. Restaurants in general are notoriously difficult to run and manage because of increasing labor costs, increasing food costs, but you will find that there’s other casual dining restaurants that are doing very well. For example, Yard House is doing very well.
2
0:10:02
Chili’s is doing very well. So in terms of pricing, there’s obviously the balance between pricing it well enough so that consumers want to come in and spend, but ultimately, I think the consumer is willing to pay more for a good experience. Now, of course, that has to be in balance. They’re not going to pay a tremendous amount more, but they are willing to pay more as
2
0:10:25
long as there’s a great ambience, there’s a great atmosphere, there’s a great draw. And I think that’s what you’re seeing at places like Yardhouse that you’re not really seeing as much at TGI Fridays.
1
0:10:39
You know, that’s a very good observation. I’ve been to the Yardhouse many times. It’s unbelievable. It’s constantly packed. It’s got an incredible vibe there and it’s a combination of people who are socializing at the bar and families and couples and they’ve got crazy decorations with the beer and coming
1
0:10:59
through from the floor. I mean it’s crazy, right? So they have a theme and a vibe. I’m assuming the people who are behind this are looking to figure out how to transition to create more of that kind of what’s working to do over, if you will. And the only thing I’m struggling with here is why did all these deals fall apart?
1
0:11:22
They had a potential sale, they’ve been leading up to this for years, and they couldn’t pull it together. So what do you think is next in your mind’s eye being an expert in this?
2
0:11:34
Yeah, and they were thinking about an IPO as well. TGI Fridays is private. They were thinking about an IPO, which they pulled. These are all indications that they’re not ready. I mean, that it’s just not in a good position. And buyers backing out is also indicative of the fact that their financial statements are not where they should be. And so, you know, any buyer is not going to really want to buy a bunch of problems if they don’t see a way out.
2
0:12:01
So what I think will happen here, Debbie, is we’ll see, hopefully, if they play this the right way, what they’ll do is they’ll bring in a new CEO who’s good at turning these kinds of things around in these kinds of situations. They will have to rebrand themselves.
2
0:12:17
They’ll have to add in some kind of new marketing campaign to create that draw, very much like Chili’s has done. Chili’s has increased their year-over-year sales despite the same headwinds that TGI Fridays is facing as it relates to increasing labor and food costs, but they’ve done it profitably, all because they’ve been able to create that draw. So I think what they’re going to need to do is create that fresh vision that really
2
0:12:44
entices consumers to want to come in, something unique, so it’s exciting and it becomes that place where you want to spend time with friends or family.
1
0:12:53
Well, you’re right and the one change they’re going to have to make is I know and you may have read that Tuesday is the new Friday, so maybe it’s TGIT and they just change that and start over again and do it a different day. Maybe that’s it. People don’t go out on Fridays the way they used to. They go out on Tuesdays and even Thursdays.
1
0:13:13
If it’s TGIT, they can play around with Tuesday and Thursday and have different specials. Yeah, I’m sorry to read the news because I had such fond memories. And you don’t want to see anybody fail, especially when it comes from a great story.
1
0:13:25
So I’m glad you took the time today because I wanted to hear an expert’s perspective. And you’re an expert on this. Am I saying your name properly, Parag Amin? It’s a beautiful name.
2
0:13:36
Parag, yes. Thank you. Thank you, Debbie.
3
0:13:39
I appreciate it.
1
0:13:40
So I know you deal with a lot of big business issues. What’s on your plate coming this week? Is there something that you want to tell us about you?
2
0:13:47
Sure. So there’s a lot of what I do is helping business owners in business disputes. And so a lot of these things where we’ve got restructuring issues, we’ve got situations where business owners are facing similar headwinds to TGI Friday, but just making sure that they do it effectively, efficiently, and there’s always a new challenge ahead,
2
0:14:10
and I welcome it with open arms.
1
0:14:13
Oh, you’re a guy who loves the challenges. All right, you have a website, Parag?
2
0:14:17
I do, www.lawpla.com. Again, it’s www.lawpla.com.
1
0:14:23
Very cool. Thank you for taking the time today. I wanted to talk to somebody about this and you were right there Right when I needed you you have a great rest of your day perot dummy
2
0:14:30
Thank you. You too. Debbie. Bye. Bye. Bye now
1
0:14:33
And by the way guys, I do have a list of where the TGI Fridays are permanently closed now in New York and Middletown Poughkeepsie and Clifton Park, Connecticut Enfield, Pennsylvania’s in Allentown and Virginia and Leesburg. So just letting you know. You see, you drive by and you’re like, Poughkeepsie and Clifton Park, Connecticut Enfield, Pennsylvania’s in Allentown and Virginia and Leesburg. So just letting you know. You see, you drive by and you’re like, what? That’s part of the list. All right, more to come here on the Monday on the Debbie Nygaard Show. Next.
Transcribed with Cockatoo
