This Beloved Restaurant is Closing More Than 70 Locations
Restaurants and fast food eateries alike are reporting major financial losses due to the coronavirus pandemic. A beloved fast casual restaurant known for dine-in fast food and sports bar–like atmosphere, TGI Fridays, is among major businesses being hit the hardest. CEO Ray Blanchette recently told Bloomberg that the restaurant chain will likely close as much as 20%, or more than 70, locations nationwide. The closures for these locations will be permanent.
Even before the pandemic, there seemed to be financial trouble. The company and its franchisees closed more than 30 restaurants in 2019, and finished the final quarter of the year with sales down by 11.3% and traffic down by 9.1%.
In November, a merger with Allegro was negotiated in a deal valued at $380 million, which would have taken the company public in March. With almost a third of their revenue coming from bar sales, the chain planned to revamp their image as the original singles bar it had become known as in its heyday. However, the merger and the plans go public were cancelled amid the pandemic.
The coronavirus crisis was a nail in the coffin for many locations, with the chain seeing revenue losses of about 80% once nationwide closures hit. The businesses recouped some of those sales by offering takeout and delivery options, but according to Blanchette, the businesses is still down by 50% compared to pre-pandemic times.
In a last ditch effort, TGI Fridays is trying the new expansion tactic many restaurants are looking to for relief: al fresco dining. Or rather, they are installing "party tents" in their parking lots where diners are encouraged to enjoy food and drinks. This option is currently available at New Hampshire locations, but pending expansion to other states. "We'll run it for a month and we'll see how it goes, and if we can do that profitably we'll do it," Blanchette said of the novel efforts.