The casual-dining chain believes the new restaurants will result in $500 million in revenue over the next 10 years.
At the start of 2022, TGI Fridays CEO Ray Blanchette indicated at the annual ICR Conference that his brand could return to 30 openings per year and more than double its footprint, especially with expansive whitespace in Europe and Asia.
On Friday, the casual-dining chain offered a glimpse of what could be the beginning of that bold prediction. TGI Fridays recently signed a master franchise agreement for 75 South and Southeast Asian restaurants in the next decade—marking the chain's largest deal in its 57-year history. Universal Success Enterprises, a multinational company headquartered in Singapore, will oversee the locations. It already owns three TGI Fridays stores in India and was responsible for introducing Outback to the region.
"We're excited to expand the TGI Fridays brand and footprint in South and Southeast Asia," Prasoon Mukherjee, chairman of Universal Success Enterprises, said in a statement. "Our deep experience in the hospitality industry, understanding of what consumers in our markets crave, and real estate development expertise uniquely positions Universal Success Enterprises to drive unprecedented growth for the brand. Personally, I began my restaurant career with TGI Fridays over 30 years as a kitchen manager—and am thrilled to be sharing the brand experience with consumers across the region."
Many brands view South and Southeast Asia as an area of opportunity. For instance, Fogo de Chão said in July that it was planning to enter Asia for the first time, with five openings in the Philippines over the next six years. In quick service, Subway last year announced it solidified a franchise agreement for more than 2,000 restaurants across South Asia, including India, Sri Lanka, and Bangladesh.
TGI Fridays has 385 international franchised restaurants in more than 52 countries, including 22 stores opening this year. The latest development deal is expected to deliver more than $500 million in revenue in the next 10 years. The move comes as global same-store sales are rising 23 percent.
"We're thrilled to bring the TGI Fridays brand—and experience—to new markets and consumers in Asia through our expanded partnership with Universal Success Enterprises," said CEO Ray Blanchette said in a statement. "Universal Success Enterprises is a valued partner—their deep experience in the marketplace and proven track record of excellence with TGI Fridays coupled with our successful local market approach will ensure the brand—and our menu offerings—are relevant to consumers."
The casual concept appears to be making significant strides in its comeback efforts, which dates back to before the pandemic. In 2019, TGI Fridays inked an $380 million agreement with special purpose acquisition company Allegro Merger Corp. to go public, at a time when corporate and franchise same-store sales dropped 9.4 percent and 12.8 percent, respectively, and traffic declined by 5.9 percent and 11.4 percent. The chain took a massive hit from COVID, with sales dropping 80 percent. The question marks and sales volatility put an end to the SPAC agreement in April 2020.
In 2021, same-store sales rose 2.4 percent against 2019. But for perspective, the chain compared against declines of 8.2 percent, 7.9 percent, 7.8 percent, and 11.3 percent in 2019's four quarters. The brand earned $73.2 million in average monthly volume in 2021, up from $50.8 million in 2020 and $72.5 million in 2019. In the U.S. specifically, TGI Fridays ended 2021 with 308 units, including 156 company-run stores and 152 franchises. From 2019-2021, the brand shut down a net of 100 domestic restaurants.
Much of TGI Fridays' efforts recently have been toward off-premises expansion. In January, the company unveiled Fridays on the Fly, a 2,500-square-foot restaurant focused on takeout and delivery. The new prototype is meant to penetrate markets in the U.S. and internationally. TGI Friday's estimated the design could earn $2 million in AUV and $300,000 in annualized EBITDA. The chain's U.S. off-premises mix reached 30.6 percent in 2021, compared to 37.8 percent in 2020 and 9.8 percent prior to the pandemic.
Additionally, TGI Fridays signed a deal with REEF Kitchens to open 300 ghost kitchens around the world and formed a partnership with C3 (Creating Culinary Communities) to use its virtual brands as an additional revenue stream.