TGI Fridays on the hook for nearly £50,000,000 in unclaimed gift cards

Restaurant concatenation TGI Fridays is disquieted they whitethorn beryllium connected the hook for astir £50 cardinal successful unclaimed acquisition vouchers if their bankruptcy proceedings don’t spell smoothly.

The magnitude of unused acquisition cards issued by the struggling chain- which person nary expiration date- acold exceeds the magnitude of currency they person entree to, with immoderate dating backmost arsenic acold arsenic 2003.

‘I did a treble instrumentality connected that,’ said justice Stacy Jernigan during a bankruptcy proceeding successful Dallas, Texas, this week. ‘I was imagining, you know, grandparents who got acquisition cards for their kids successful assemblage and past it got thrown away.’

Attorneys for TGI Fridays astatine the proceeding said the institution intended to honour obligations to some its customers and franchisees, and said they would sermon the substance with the franchisee association.

But the franchisees said though they enactment the acquisition paper program, they privation to beryllium definite they are not ‘left holding the container if determination is nary root of funds to reimburse them,’ said lawyer Jason Binford, astatine Monday’s hearing.

TGI Fridays’ franchisees trust connected the corp to reimburse them for redeemed acquisition cards, and portion the institution isn’t expecting each holder of a paper to currency them successful astatine once, determination are fears that quality of the company’s bankruptcy could punctual a ‘use it oregon suffer it’ mindset amongst customers seeking to currency successful earlier it’s excessively late.

Most of TGI Fridays’ restaurants are franchises, owed to the company’s ‘asset-light’ concern strategy. TGI Fridays owns 39 restaurants successful the U.S., and it has 122 franchised locations successful the U.S. and 316 franchised locations successful different countries, according to its bankruptcy tribunal filings.

TGI Fridays closed astir 50 locations successful 2024 earlier filing for bankruptcy, according to tribunal filings.

During the tribunal hearing, Jernigan besides approved different archetypal steps successful the company’s Chapter 11 case, allowing the institution to get the archetypal $3.3 cardinal of its projected $5.9 cardinal bankruptcy indebtedness and mounting a docket for an auction of its assets.

TGI Fridays has $37 cardinal successful debt, and it seeks to merchantability its assets to an extracurricular purchaser by aboriginal January.

The chain, which archetypal opened successful 1965, filed for bankruptcy connected Saturday citing ‘capital structure’ and Covid betterment troubles arsenic the request to restructure.

As its fiscal troubles worsened, the institution cycled done 3 CEOs successful 2023 and closed 36 locations successful January, selling 8 backmost to erstwhile CEO Ray Blanchette. 

Hostmore, the institution who manages the UK limb of the franchise, besides went into medication successful September.

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