The owner of the UK arm of the restaurant chain TGI Fridays (TGIF) has gone into administration, putting 4,500 jobs and 87 outlets at risk.
Hostmore, which runs the UK franchise for TGIF, has appointed administrators and delisted its ordinary shares after struggling to find a “lasting solution” to save the business amid heavy losses and mounting debts, it said on Wednesday.
The hospitality company has already tried to balance its books by deep cost-cutting, pausing its expansion programme, management changes, and selling outlets.
It has put 87 of the chain’s restaurants on the market and hopes to complete a sale by the end of September, which would keep the brand name alive on British high streets and help to secure jobs.
In the meantime, the American-inspired chain “continues to operate normally and all existing stores remain open”, Hostmore said.
The firm’s shares crashed more than 90% last week after it said it expected to be “wound up” and de-listed once the sale of its retail outlets was complete.
The group’s future was left in ruins after plans to buy its US parent company fell through.
Having struck a £177m agreement in April, the deal broke down after the US firm lost control of TGIF Funding, and with it, the royalties from its lucrative franchise agreements and intellectual property.
Daniel Smith and Julian Heathcote of Teneo Financial Advisory Limited have been appointed joint administrators of the Company, The Caterer magazine said.
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Hostmore said in a statement its efforts to find a lasting solution were hamstrung by a “highly challenging trading and macroeconomic backdrop”, while the collapse of the US deal was down to events “outside of the board’s control”.
The administration makes TGI Fridays the latest victim of the challenges facing casual dining chains and UK high streets generally.
The popularity of online shopping, coupled with shrinking high street footfall and the financial hangover from the COVID-19 pandemic are widely seen as the two big issues hurting UK shops and hospitality businesses.