TGI Friday’s $49 Million in Unused Gift Cards at Risk After Bankruptcy—Use Yours Before It’s Too Late
Have a TGI Friday’s gift card? Use it soon to avoid losing its value as closures continue
Fans of American casual chain restaurants have been hit with quite the disappointment this year as companies like Red Lobster, Denny’s and TGI Friday’s continue to close down locations across the country. While the dwindling restaurant numbers are worrisome for both the business and diners, there’s one issue that has customers especially concerned. After TGI Friday’s recent bankruptcy news, customers are now left wondering what this means for their unused gift cards for the chain. Keep reading to find out more about TGI Friday’s filing for bankruptcy and how it could impact any gift cards you have.
Why did TGI Friday’s file for bankruptcy?
TGI Friday’s has been a popular dining spot since its first location (a bar) opened in Manhattan, New York in 1965. But recent years have proven to be difficult for the chain restaurant.
On Saturday, November 2, TGI Fridays Inc. filed for Chapter 11 bankruptcy protection in Dallas, Texas. According to Reuters, the company’s financial troubles are due to high operating costs and a waning interest in casual dining restaurants.
Those problems came to the forefront when the company abruptly closed 36 restaurants in January of this year. More closures followed in October, particularly with their properties located in the Southeast, Midwest, and East Coast.
Despite these sudden closures, the company still currently owns 39 restaurants in the U.S. and has 122 franchised locations around the country. The high number of franchises was an intentional business strategy that had seemingly worked until now.
How TGI Friday’s bankruptcy may affect gift card holders
As part of the bankruptcy restructuring, TGI Fridays Inc. is borrowing $5.9 million, reports USA Today. But it appears that their financial trouble is even greater when you factor in another element: gift cards.
Court documents have shown that TGI Friday’s has about $49.7 million in outstanding gift cards—an amount far larger than what they’re borrowing. Shockingly, some of these cards are more than 20 years old.
While this would be an issue for any company in debt, it’s particularly worrisome for TGI Friday’s franchises. The reason? Franchises will accept gift cards for payments, with the expectation that the chain reimburses them for the “lost” money.
Naturally, with TGI Friday’s low on funds, the owners of these locations are worried they’ll be stuck covering these costs themselves. This is especially a concern if customers rush out to use their gift cards and the franchises must honor them.
What this means for you
If you’re holding onto a TGI Friday’s gift card, experts suggest using it soon.
“Go use it, otherwise, you could end up in line for repayment behind a bunch of other creditors … (and) you’ll be lucky, frankly to get pennies on the dollar for it,” said John Bringardner, head of debt tracking firm Debtwire, told USA Today.
Attorneys for the company said at a hearing that TGI Friday’s promises to honor its financial obligations to both customers and franchisees. Little is known, however, beyond that.
Waiting too long to use your gift card could also mean you lose out on the chance to dine at a location near you before it closes. Even worse? The company may stop accepting that form of payment altogether.
This was the case when retail chain Bed Bath and Beyond filed for bankruptcy in 2023. Shortly after, it was announced that they would soon be declining coupons and gift cards. The deadlines were timed with the start of their store closing sales, when items began flying off the shelves at deep discounts.
Though that type of closing doesn’t occur for restaurants typically, it’s still wise to take haste in this case. Spending your gift cards in the near future will ensure you can still enjoy your TGI Friday’s favorites before it’s too late.
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