TGI Fridays has recently undergone a significant restructuring.
This development, marked by a private equity takeover, resulted in 35 branch closures and over 1,000 job losses. Despite these setbacks, the acquisition saved numerous jobs and offers a route to business modernisation.
TGI Fridays’ acquisition by private equity firms Breal Group and Calveton has partially pulled the brand out of administration. This move secured 51 restaurants and saved approximately 2,400 jobs. Despite this, the acquisition process has been marred by significant controversies, particularly concerning the abrupt manner of staff redundancies at closed branches.
Reports from various sources indicate that some employees were informed of their termination with as little as one hour’s notice. This information was conveyed via impersonal means such as video calls and WhatsApp messages. According to the trade union Unite, many employees face uncertainty regarding their pay entitlements. This treatment has been deemed “frankly appalling.”
Hostmore, the previous owner of TGI Fridays in the UK, had entered administration due to a combination of debt and declining sales performance. Subsequent negotiations with landlords were unsuccessful, leading to the closure of 35 branches and 1,012 job losses. The closure of these branches has left many staff members in a precarious financial situation with concerns over unpaid wages and benefits.
Julie McEwan, TGI Fridays UK’s chief executive, expressed devastation over the closures and gratitude towards affected employees. She stated, “We are doing everything possible to retain our team and support those impacted.” Meanwhile, Breal Group and Calveton plan to modernise the remaining restaurants and leverage their heritage. Their management team is committed to revitalising the brand amidst an increasingly competitive market.
The UK casual dining sector is experiencing considerable difficulties due to economic pressures. Shrinking consumer spending and rising operational costs have intensified competition. TGI Fridays has not been immune to these challenges, necessitating significant changes under its new ownership. This environment underlines the importance of innovation and adaptability for survival.
Daniel Smith from Teneo highlighted the significance of the rescue effort, emphasising that it has preserved a substantial number of jobs. He remarked, “The exercise aims to provide necessary support for recovery and growth.” This statement offers a glimmer of hope for the brand’s long-term sustainability, contingent on addressing emerging challenges effectively.
As TGI Fridays navigates a challenging economic landscape, the focus remains on stabilising operations and supporting affected staff. The recent private equity intervention, despite its downsides, offers a pathway to potential recovery.