Dive Brief:

• TGI Fridays will close 36 underperforming corporate-owned stores in the U.S. as part of its long-term strategy, the company said in a press release Wednesday. 
• The chain also sold eight corporate-owned restaurants in the Northeast to former CEO Ray Blanchette who will “lead the locations into a new phase of revitalization.” 
• During the fourth quarter, the company brought on new leadership. Weldon Spanger was appointed CEO, Ray Riseley took on the role of U.S. president and COO and Nik Rupp became CFO and president of international markets.

Dive Insight:

Among the biggest transformations underway at TGI Fridays its menu overhaul. Months after adding its Grilled & Sauced menu, Fridays enhanced its offerings further with appetizers, salads and other items. The company has been working to modernize its menu to attract younger audiences and boost frequency.

TGI Fridays also updated its loyalty program last spring, in a move that combined several loyalty tiers and made some items more expensive and some cheaper to redeem.   

The company’s top 25% of corporate-owned stores posted average sales of nearly $4.4 million during 2022, per TGI Fridays’ 2023 Franchise Disclosure Document. Comparatively, its lowest-performing stores averaged sales of around $1.8 million. Overall, finances have improved since 2020, when the restaurant had a net income of $47 million. Net income increased roughly 40% to $66 million in 2022 compared to 2020.

At the end of 2022, the franchisor reported 158 corporate locations and 134 franchised locations, for a total of 292 locations in the U.S. Per the press release, the company has over 650 restaurants globally in 51 countries. With the closure of 36 units in the U.S., its total would come down to roughly 614 units. Fridays has been closing units for years, according to the FDD, with its American unit count down 56 stores in 2020. In 2021 and 2022, its store count shrunk by 20 and 16 units, respectively. 

Several other casual chains have been closing underperforming restaurants to improve their systems. Applebee’s has shuttered nearly 300 restaurants since 2016, according to Restaurant Business. In 2023, Applebee’s closed underperforming stores, including older units that were in areas that are no longer sustainable because of changing consumer dynamics. This strategy led to between 25 and 35 net fewer locations last year compared to between 10 and 20 fewer locations. However, this strategy is also intended to open up new trade areas and opportunities for growth.