The casual restaurant chain TGI Fridays filed for Chapter 11 bankruptcy today (Saturday Nov 2), though it does not (yet) look like they are shutting down.
Casual dining restaurants have been doing poorly in recent years, as food tastes change, and as younger consumers are both opting for delivery, carryout, or fast-casual options, as well as being less likely to drink alcohol (a particular issue for the drink-centered Fridays).
Fridays had peaked at over 600 restaurants in the U.S. in 2008; they’ve closed over 100 restaurants in the past year alone, and are now down to 163 in the U.S.
It doesn’t seem like so long ago that millennials were being blamed for the death of these casual chain restaurants. Among the list of casual restaruants I remember frequenting were TGIF, Chilis, Appleby’s, Bennigan’s, etc., etc. because they were inexpensive and there was something on the menu for just about anyone. The only one I miss is Bennigan’s because it’s hard finding a place that serves a Monte Cristo sandwich.
I must be one of those customers whose tastes have changed over the years as I no longer frequent the casual dining chains. I went to a Chili’s about ten years back simply because I was meeting a friend driving through Little Rock and HWY 30 was right there. On rare occasion I’ll go to Cheddar’s, only because they have a Monte Cristo, but I stopped because the rest of the food on the menu is so bad I couldn’t subject my wife to it in good conscience.
Times certainly are changing. I remember when Red Lobster was the type of place you asked to go on your birthday. I haven’t been to a Red Lobster since 2001.
I had Applebee’s as a client for about four years, but that was 20 years ago now. COVID
And they, too, are struggling; Red Lobster filed for Chapter 11 back in May, after seeing declining sales for years, as well as an ill-fated All You Can Eat Shrimp promotion that was a massive money-loser.
Last time I was in a Friday’s was about a year ago. It was nearly empty, surprisingly expensive for what I remembered (like $20+ for a burger/fries) and the food wasn’t all that great even by corporate casual dining standards. I was reminded of the restaurant death spiral thing as I ate it – fewer customers means less turnover on food means customers get worse quality food meaning existing customers don’t come back meaning less turnover on food, etc. It definitely felt well on its way.
As far as I know, in actual casual dining (as opposed to fast-casual places like Chipotle or Panera), they’re all struggling – for all of the reasons that I listed above for Fridays, plus consumers being more price-sensitive due to inflation.
For example, Applebee’s and IHOP are both owned by Dine Brands. For the second quarter of this year (they release third-quarter results this upcoming week:
Applebee’s same-store sales declined 1.8% compared to 2023.
We had a very bad experience at an Appleby’s here in Little Rock near a decade past. I ordered fried shrimp, and got what was expected, by Mrs. Odesio ordered an overcooked steak and the mushrooms on top were disgusting. The place wasn’t at all busy, but by the time the waiter stopped by to check on us I had finished my meal and Mrs. Odesio wasn’t interested in a replacement steak. They took the steak off the bill but didn’t even offer an apology. We made a sacred vow that day never to return to Appleby’s.
Me, I still like them all. But I can’t singlehandedly keep them all in business. i only gots one stomach!
I liked the Jack Daniel’s menu at TGIF. But it seems every one in Arizona has closed. Ther last time we went to the location we always went to, not only was it closed, but the whole building was gone!
Although it is certainly true that tastes in dining change over time, the real reason that corporate chain restaurants are collapsing en masse has much more to do with private equity investment. PE films were investing in the food and beverage industry starting from the early 2000s but with all of the liabilities during the 2007-8 economic crisis it increased, and the COVID-19 pandemic allowed firms to buy out restaurant investments at bargain basement prices. Of course, PE does to the industry what they do to everything else the touch; the look for ways to cut costs, sell assets, and make short term profits by selling debt to themselves (i.e. selling off the land to a holding company that takes out debt on the purchase and leasing it back to the corporation or franchisee, and then claiming bankruptcy when the underfunded and overleveraged business can’t pay rent). It is all rent-seeking behavior in service of near-term profits, after which they sell off the land and assets to squeeze the final drops of blood and then move onto the next victim.
The last time I went to TGIF was before COVID and it was still ridiculously expensive, $20 was the starting point for any real entree. I can’t imagine how expensive it would be now.
We had a TGI Fridays where I lived that one day just closed its doors and didn’t even bother to tell its employees they showed up to work and the doors were locked.
On three separate occasions I went with my children to the closest Applebees and waited patiently for approximately 15 minutes without so much as anyone taking our drink order and so we just walked out, after the third time it happened I said screw ‘em and haven’t been back since.
Mine isn’t as dramatic as yours, but: the last time I went to Applebees, I ordered a burger with extra pickle. I took a bite, and noticed no pickle; I lifted the bun, and saw no pickle; I mentioned this to the waiter, who checked with the kitchen and informed me that, no, there was. On his own initiative, that waiter later had the manager come out and explain things to me likewise.
I realized my mistake, and haven’t been back since.
I don’t remember if I’ve ever been to a TGIF, but back in my working days we’d regularly frequent many such places. I suspect TGIF was probably one of those restaurants that never really recovered from the COVID downturn. OTOH, I’m skeptical about Chapter 11 filings, which often seem to be a thinly veiled excuse for a company to shield themselves from creditors while continuing to carry on business.
Still, the restaurant business is brutal. I used to live in a medium-sized town which was large enough to support a variety of eateries from casual to high-end, but small enough that if you ate out a lot as I did at the time, you could track their progress, from grand opening to seemingly inevitable demise, even those that were – in my opinion at least – very good. I felt like I could almost write a book about the life cycle of a restaurant: the optimism of its first days, with excellent creative dishes and great service, the middle years of declining quality and rising prices, and the death spiral of its final years. The amazing thing to me is not how many restaurants fail, but how many are always around.
I’m kind of enjoying the conversations about this that I’ve had with my friends and family. A few of them used to go to our local TGI Fridays in Raleigh, NC, regularly (mainly because of location). It’s closed now.
I then casually mention that the last TGI Fridays my wife and I went to was in Oslo. Sort of a mic drop moment. I believe that that one is still open.
We have very few chain restaurants left in town anymore. We used to have two Applebee’s, both are closed. On The Border and one of the steak house franchises who’s name escapes me at the moment both closed in recent years. The story I heard is that the property owner raised the rent and both businesses decided not to renew their leases. A couple of new restaurants have opened and closed in the old steak place but OTB has been vacant for about five years. About all we have left are a Chili’s and a Texas Roadhouse.
Lots of locally owned restaurants that seem to be doing OK though!
That’s the thing. If people are going out less often, then they might want choose something better. We used to always go to TGI Friday’s at least once when we were in the US. This last visit? We decided to go to a local place instead which has a micro-distillery as well. The menu is more interesting and the quality is better.
Last time we were in one was 2 years ago. We used to always get the potato skins and mudslide cocktails. Too many calories, though, so no appetizer and unsweetened ice tea. That location’s still open.
