Is one of Americas best known casual spots for dining going belly-up? Not quite, but one Franchisee withing the company is feeling some financial setbacks. According to Restaurant News, "BiState Bistro Associates, a 12-unit T.G.I. Friday's franchisee, filed for Chapter 11 bankruptcy protection last week, a result of financial hardships stemming from the closure of the operatorâ€™s 13th location in Fayetteville, Ark."
According to BiState representatives, the franchise has undergone a volley of financial pitfalls, namely declining revenues resulting from the recession. As a result, they have not been able to keep pace with their repayment obligations of their 20 yr lease and payments to remodeling creditors. The filing of a Chapter 11 gives temporary relief from debt collection while proposing a repayment plan, reorganizing their business model, and repaying creditors over time which amounts to $9.5 million. The breakdown of debt is as follows:
- $5.6 million to GE Capital
- $1.7 million for remodeling expenditures
The company is very optimistic about its future, and will keep its restaurants open during the reorganization, citing that only one unit within their ranks is impacted by the reorganization. All other restaurants under their management have healthy balance sheets, and are not under bankruptcy protection.
Any time I hear about a company filing for any form of Bankruptcy protection, I tend to order one less hot wing, or head over to one of its neighborhood competitors. The issue of quality and creating short cuts comes to mind. But, that's just me. What are your thoughts? Are we seeing the death of a great Giant, similar to Bennigans? Or, a recession gone bad?
Carrollton, Texas-based Carlson Restaurants Worldwide operates or franchises more than 900 T.G.I.Fridayâ€™s restaurants in more than 60 countries. It also franchises the Pick Up Stix fast-casual chain.