TGI Fridays teeters toward administration as tax pressures bite hospitality

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TGI Fridays is edging toward collapse, with its owner preparing to push the casual dining chain into a pre pack administration as early as next week, according to people close to the process.

Sugarloaf TGIF Management, which bought the business just two months ago, is finalising plans that could see a large slice of the estate closed for good. Sources say between 15 and 20 of the brand’s 49 UK restaurants are at risk, though the final number is still being debated and could change.

Hundreds of jobs are now under threat from a workforce of nearly 2,000. A company spokesperson said on Friday, “TGI Fridays UK is still assessing all options for the future of the business. No decisions have been made yet and locations continue to operate as usual.”

Interpath Advisory has been appointed to oversee the administration process, with two formal notices of intention lodged before Christmas. People familiar with the talks cautioned that the transaction could slip beyond next week. The company has declined to comment on the detail of any pre pack arrangement.

The looming closures underline the strain gripping hospitality, with operators increasingly blaming higher national insurance contributions and other tax measures introduced in Rachel Reeves’s 2024 and 2025 Budgets. Industry figures say the policies have landed at the worst possible moment, squeezing margins already battered by weak consumer confidence.

TGI Fridays was put up for sale in November, only weeks after Sugarloaf TGIF Management, led by former chief executive Ray Blanchette, acquired it. The problems, however, stretch back more than a year. In April last year a £177 million deal to buy the UK business was agreed by its parent company, only to be abandoned in September after legal complications.

Later that month TGI Fridays fell into administration, placing 87 restaurants on the market. A rescue in October by Breal Capital and Calverton saved dozens of sites, but 36 were closed permanently. At its peak the brand operated close to 90 restaurants across the UK. Founded in Manhattan in the 1960s, TGI Fridays expanded internationally in later decades.

The latest turmoil comes as other household names disappear from the high street. Claire’s and The Original Factory Shop collapsed, putting a combined 2,500 jobs at risk amid what owners described as “extremely challenging” conditions. Modella Capital, which owned both chains, cited “highly adverse government fiscal policies” among the factors crushing the sector, adding it had worked “intensively” to save the businesses but that “neither has a realistic possibility of trading profitably again” and administration was “the only option”.

Conservatives have laid the blame squarely at Labour’s door. Party leader Kemi Badenoch said, “Our High Streets are closing down because Keir Starmer has lost control of our economy.”

Andrew Griffith, the Tory business spokesman, added, “The collapse of familiar high street chains are the tip of an iceberg of firms being decimated by higher rates, employment costs and low consumer confidence. It’s a January wake up call for the Chancellor to act before more damage is done.”