Two burgers, onions rings, and a beer at TGI Fridays.

TGI Fridays

It's going to be all about the bar, and social gatherings.

Is a TGI Fridays Comeback in the Cards?

The casual-dining leader's sale will usher in a host of changes.

TGI Fridays’ $380 million sale to Allegro Merger Corp. broke rank from recent history. Namely, it sent a restaurant chain to the public sector instead of taking it off.

When Kura Sushi raised $41 million in its initial public offering over the summer, it marked a first for a restaurant chain since Wingstop and Fogo de Chao hit the stock market in 2015.  It has been far more common in recent years to see a publicly traded company, like Ruby Tuesday or Buffalo Wild Wings, head private after a takeover (NRD Capital in the first case and Roark-backed Inspire Brands in the second).

To put this in perspective, consider that, over the first nine months of 2019, per PitchBook, private-equity deal value in just the quick-service sector approached $5.35 billion. In all of 2012, it was $3.17 billion.

So, TGI Fridays’ November announcement was a headliner beyond the numbers. Allegro Merger Corp. and the casual pioneer signed a definitive agreement for “a business combination transaction”—one that would result in TGI Fridays trading on Wall Street. At closing (end of March expected), TGIF Holdings, LLC’s holders are set to receive a combination of cash and stock valued at $30 million. Allegro assumed roughly $350 million of net debt. Existing shareholders of the company could also receive up to an additional two million common shares contingent on the performance of the company.

The majority owners of TGIF exchanged a majority of their ownership in the business for shares of Allegro. 

It will signal a big change. In 2014, longtime-owner Carlson Restaurants sold TGI Fridays to TriArtisan and Sentinel Partners for more than $800 million. It has been privately held since merging with Carlson 30 years ago.

But beyond the how of the deal, why Allegro and TGI Fridays joined forces has multiple layers. There are two main ones: Access to equity capital to deleverage the company’s balance sheet, and cash to accelerate its revitalization plan, and fund growth and marketing initiatives at TGI Fridays.

At the time of the agreement, TGI Fridays had 396 U.S. locations (144 company owned, 252 franchised) and 442 international franchises. There are now 831 locations after some West Coast franchise closures (446 international).

As of Q3, the chain reported revenue of roughly $350 million on systemwide sales of $2 billion. Licensing revenue came in at $13 million and off-premises sales mixed 13 percent of the total business. Adjusted EBITDA was $57 million and the average domestic net sales per store was $2.7 million, with average checks of $18 per guest (beverage included).

Yet TGI Fridays had some real, year-over-year, traffic concerns stateside headed into the sale.

Comparable traffic


  • Corporate: 0.1 percent
  • Franchise: –7.4 percent
  • International: –5.2 percent


  • Corporate: 1 percent
  • Franchise: –2.9 percent
  • International: –4.7 percent


  • Corporate: –10.9 percent
  • Franchise: –12.1 percent
  • International: –7.7 percent


  • Corporate: –4.5 percent
  • Franchise: –6.8 percent
  • International: –6.6 percent (through September 30)

Taking 2019 out of the equation, TGI Fridays’ transactions were stacking negative 15 percent on a two-year basis at franchised units. And that’s following a 7.4 percent drop. TGI Fridays’ U.S. franchise base is made up of 24 operators who own, on average, 10.5 locations apiece. The company said they average 10 years of experience with the brand. Internationally, TGI Fridays comprises 40 franchisees in 56 countries running 442 units (an average of 11.1 restaurants per owner). Aside from Mexico, all countries are operated by one franchisee.

TGI Fridays’ biggest U.S. franchisee has 66 restaurants. It goes 43, 36, 24, and 16 to round out the top five, while the other 19 account for 67 locations. Nine operators are single-unit franchisees.

The company’s top-line sales have sagged along with traffic.

Comparable same-store sales


  • Corporate: 0.9 percent
  • Franchise: –6 percent
  • International: –3.5 percent


  • Corporate: –2.7 percent
  • Franchise: –5 percent
  • International: –2.6 percent


  • Corporate: –2.3 percent
  • Franchise: –5.8 percent
  • International: –6 percent

2019 (through September 30)

  • Corporate: –7.3 percent
  • Franchise: –8 percent
  • International: –2.9 percent

What this boils down to is Allegro’s deal, at its core, was a turnaround project. TGI Fridays said same-store sales have improved recently as new value drivers were identified in key markets. Seven areas in particular gained traction—the U.K., Middle East, Scandinavia, Philippines, Mexico, Malaysia/Indonesia, China and Australia (as one market).

The company said China, Hong Kong, and Taiwan are development targets currently, with accelerated growth planned for Spain and Brazil.

Here’s a look at how TGI Fridays sees potential international whitespace (a key to the deal’s potential). The brand said it has 82 international commitments in place today.


  • Existing units: 17
  • Potential: 50


  • Existing units: 14
  • Potential: 40


  • Existing units: 9
  • Potential: 70 (there is new ownership here)


  • Existing units: 6
  • Potential: 45

Southeast China

  • Existing units: 3
  • Potential: 80


  • Existing units: 2
  • Potential: 35

Turning back to the day-to-day business itself, though, TGI Fridays has a lot of comeback-minded initiatives in order. The brand hired Ray Blanchette in October 2018 to “drive the transformation and implement a strategy focused around improved marketing, value offerings, a revamped American bar, and solid off-premises growth,” it said.

TGI Fridays

Daily value has keyed TGI Fridays' comeback strategy so far.

Blanchette was a notable move given his history not just in the restaurant turnaround space, but with TGI Fridays in particular. He joined the brand, this time, after nine months as CEO of Ruby Tuesday, succeeding Aslam Khan, a brand franchisee.

But Blanchette previously served as president and COO of Carlson Restaurants Worldwide, then the parent company of TGI Fridays. He started his career with the casual chain, working a variety of roles for 18 years.

Blanchette’s other industry experience includes founding since-dissipated Ignite Restaurant Group as a holding company for casual-dining brands, bringing on Joe’s Crab Shack and Brickhouse Tavern + Tap. The company struggled to gain footing after acquiring Romano’s Macaroni Grill and filed for bankruptcy in 2017. Two years after buying the Italian chain for $55 million, it sold it for $8 million.

Blanchette also held the CEO title at fast casual Au Bon Pain for 20 months, a run that culminated with the chain’s sale to JAB Holding Company. He took the Ruby Tuesday job shortly after.

Since joining TGI Fridays, Blanchette brought on John Neitzel and Jim Mazany to run franchising and company stores, respectively. Neitzel has been in the business for 35-plus years, while Mazany boasts two-plus decades.

TGI Fridays’ restructured management was busy leading up to the Allegro agreement. It quietly acquired some franchises at “attractive valuations with potential for substantial earnings upside.” It also noted there was potential to refranchise certain regions to qualified casual-dining franchisees down the road, once operations improved.

In September 2018, the company bought 15 units in Colorado/Texas. The following February, it acquired 70 from the Northeast. In June, TGI Fridays struck two deals—a 16-unit move in Long Island, New York, and a seven-restaurant one in Houston.

TGI Fridays said these, historically, represented some of the system’s strongest units, in longstanding core regions backed by strong guest affinity. Potential aplenty, in other words, but restaurants that lost their way.

The low-hanging fruit exists then from strengthening management talent and implementing operational best practices. TGI Fridays said 40–50 percent of existing directors of operations and GMs were replaced in a three-month span. New management in the Boston region, for example, where there are 18 stores, has already shown significant lift.

Traffic in January hiked 12.7 percent, followed by 11.9 percent, 8.4 percent, 6 percent, and 5.9 months in the subsequent months. And it tracked positive through October.

TGI Fridays

Can TGI Fridays improve frequency from Monday to Thursday?

Understanding the comeback’s core

The target for TGI Fridays is pretty crystal: Emphasize the bar. It’s looking through the lens of “Happy Hours are way better than non-happy hours,” and letting that trickle down through communications. While it sounds straightforward, TGI Fridays had a significant gap in occasions over the last few years. The reason being it was struggling mightily to drive visits from Monday to Thursday.

In 2018, the company’s year-over-year traffic decline during the week (minus Friday) was negative 15.5 percent. TGI Fridays’ company stores began offering weekday flash sales in Q1 2019 along with endless apps late night. In response, the decline narrowed to 7.5 percent.

The ensuing quarter, TGI Fridays amped up these weekday flash sales, launched a lunch menu, and started testing embedded value offers. Traffic declined just 2.9 percent in response.

And then came TGI Fridays’ Day of the Week deals, as explored further here. Basically, the brand began piloting a Big Ribs Thursday deal where guests could order a half-rack of the signature item for $7.99 or a full-rack for $12.99. VP of marketing Cindy Syracuse said the strategy inspired trial and brought in repeat customers—guests who knew they could count on it. But, speaking to TGI Fridays’ main concern, these were likely customers who weren’t showing up on Thursday before.

That success inspired TGI Fridays to expand the construct in early September. From rewards screenings and guest learnings, it identified “fan favorites” and set them up throughout the week in a series of "Day of Week" deals that stuck prominent value into the menu. And it was something few competitors at this scale were attempting. Offers like $5 Cheeseburgers on Tuesdays.

Since that change, TGI Fridays said its Monday to Thursday company-store traffic has been up 3 percent, excluding the test window.

Additionally, following the introduction of Drink of the Month specials in May 2019, its liquor, beer, and wine same-store sales have improved.

The No. 1 strategic turnaround priority for TGI Fridays is to deliver an affordable and social bar experience. To curate offers that present everyday beverage value that expands reach and visits in a typically low-frequency category. To put it simply, TGI Fridays hopes to reclaim its bar heritage through new social occasions and curate an atmosphere that encourages gatherings. The idea of catering to "People of All Stripes," as the above video illustrates. That’s really where TGI Fridays can stand apart from competitors. And it’s drifted from that DNA in recent years.

Why did TGI Fridays lose grip of this core? The brand admitted its bar-centric heritage was deemphasized as it repositioned to a more family oriented dining destination. Doing so, however, blurred TGI Fridays into the casual-dining pack.

The bar “could be better leveraged, with a value focus, to drive incremental traffic,” TGI Fridays said. Expect to see this personality relaunched via “significant TV and digital ad spend to provide a bang and build momentum.

TGI Fridays

TGI Fridays has a lot of work ahead, but it's moving in the right direction.

More elements to consider

The second pillar for TGI Fridays, the company said, is to provide differentiated value across every daypart and day of the week. Along with the daily offers, TGI Fridays plans to bundle value to encourage indulgent occasions, it said, like birthdays. Spotlight late-night food offerings to support an everyday beverage strategy. And use digital marketing to drive incremental value.

The third target for the brand is to recognize and reward loyal guests and employees, it said. TGI Fridays invested about $30 million over the last few years in its app and loyalty program. It plans to put in another $3 million in 2020. Currently, the company’s program features a largely inactive base (about 60 percent). It’s primarily been run through email based on heavy discounts in the past. The company wants to evolve to cross-channel communication and develop a program that adds personalized value for guests.

TGI Fridays said it’s working to create a tier system to leverage “competitive nature and the desire for recognition” by offering new levels quickly (expected to arrive later this year). The aim would be to reward “valuable customers” so people can build up to better deals. Thus, incentivizing visits to work toward premium offers, like Starbucks does. It’s a gamification method many brands use to work away from deep discounting in favor of one-to-one marketing. Mass personalization over mass communication, and deals designed around loyalty.

TGI Fridays said it also hopes to sustain a culture of recognition for employees and provide learning and development opportunities to retain talent.

The brand put speed, attentiveness, and manager resolution on its goals, too. Lastly, TGI Fridays hopes to grow its off-premises channels by accelerating engagement with third-party delivery providers and improving to-go systems.

TGI Fridays had $74 million of off-premises sales in 2016. That number has climbed to $88 million, $121 million, and $138 million in respective years (the final being a figure through September 30, 2019).

Leading into the deal, the chain witnessed delivery sales increase more than 175 percent, year-over-year (from $16 million to $43 million). TriArtisan, through its involvement with P.F. Chang’s and Hooters, said it was working on building strategic relationships with aggregators to improve profitability and add marketing support for all three brands.

TGI Fridays top quartile of restaurants, it said, have significantly fewer guest complaints—60 percent lower than quartile 4 locations—and better social media scores.

So, here’s the golden scenario. TGI Fridays wants to improve profits by 1,000 basis points; grow AUV by $1 million; triple the size of active rewards members and increase frequency by at least 25 percent; enhance guest satisfaction scores 20 percent; and get recognized as one of the best places to work with annual turnover sub-100 percent.

Can the iconic chain get there? Thanks to going public, we’ll be able to follow along