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The UK operations of TGI Fridays, the casual dining chain known for its two-for-one deals and loaded potato skins, have been saved from collapse after a rescue buyout by private equity firms Breal Capital and Calveton UK.
The deal will save more than 2,000 jobs at restaurants operated by Hostmore, the brand’s UK franchisee. It will also save at least 51 of the American-themed group’s 87 restaurants in the country.
However, more than 1,000 staff will be made redundant with the immediate closure of 35 restaurants, according to administrators at Teneo. Other sites could still be retained depending on discussions with landlords.
Breal and Calveton already own more-upmarket restaurants such as Le Pont de la Tour, Quaglino’s and the Coq d’Argent, plus the burger chain Byron and the wine bar business Vinoteca.
The two firms said they would work with management to “modernise the business and capitalise on the heritage of this iconic brand”.
The deal would save a significant number of the outlets in the group, which began in New York in 1965 and opened its first UK restaurant in Birmingham in 1986. Like many brands in the casual dining sector, the chain was hit hard during the pandemic but remains popular on many British high streets.
Julie McEwan, chief executive of TGI Fridays UK, said: “TGI Fridays is a much-loved brand with a rich heritage. The news today marks the start of a positive future for our business following a very challenging period for the casual dining sector as a whole.”
Hostmore filed for administration last month after ending plans for a £177mn reverse takeover of the troubled, Dallas-based US parent TGI Fridays Inc. The company had already said that it planned to sell its UK restaurants should the takeover of the US operation go ahead.
The UK business was listed on the London Stock Exchange in 2021 after the break-up of its private equity owner Electra. In the US, TGI Fridays is controlled by TriArtisan Capital Advisors, a US-based private equity firm.
However, in a dispute with bondholders TGI Fridays Inc last month lost control of the right to receive payments from franchisees — the event that led Hostmore to walk away from its takeover plan.