TGI Friday’s UK future in doubt as owner reveals plan to enter administration

The firm responsible for the UK version of the TGI Fridays restaurant chain has announced its intention to bring in administrators, raising concerns about the future of its 87 locations and the jobs of 3,000 staff members.

The American diner chain may vanish from UK high streets following Hostmore's announcement that administrators from the consultancy Teneo will be brought in, and its restaurants will be sold to competitors. In the meantime, the restaurants will keep running as usual.

Hostmore announced that the sale, expected to finalize by the end of October, will bring in less money than what it owes. As a result, they are halting trading of their shares, which have dropped to nearly no value. The company currently has debts totaling £35 million.

Since the discussions about a £180 million acquisition with TGI Fridays in the US fell through last week, the company has been seeking a way to secure a rescue agreement. The merger fell apart when the primary franchise owner in the US announced that it no longer had the rights to the royalties and other earnings associated with the TGI Fridays brand.

A statement about the conclusion of those discussions led to a drop of over 90% in the value of Hostmore's stock.

It's uncertain whether a potential buyer will come forward to take over the TGI Fridays brand in the UK, or if all of its locations will be changed to a different brand once they are bought.

Hostmore stated that its board faced a particularly difficult situation but was able to reduce annual expenses by £12 million, minimize losses from unprofitable locations, and enhance the overall customer experience.

The company explained, “Sadly, despite the board's attempts to establish a sustainable solution for the business's long-term financial health, they faced a difficult trading environment and broader economic challenges. Furthermore, while significant progress was made toward acquiring TGI Fridays to benefit shareholders, unexpected issues arose that were beyond the board's influence.”

Established in 1965 in New York by a group of pals, TGI Fridays – Thank God It’s Friday – set out to blend traditional American favorites like burgers with a relaxed and vibrant ambiance.

It started in the UK back in 1994 and grew into a substantial chain. In 2014, it was acquired by the private equity firm Electra Partners. Then, in 2021, Electra separated the owner of TGI, known as Hostmore, and took it public in London.