TGI Fridays and Hostmore, the U.K. franchisee, have recently announced plans to merge in an all-share deal valued at 177 million pounds, or $220 million. If the merger goes through, TGI Fridays will become publicly traded on the London Stock Exchange with the ticker symbol “TGIF.” Despite the merger, the company’s headquarters for its U.S. and global brand operations will remain in Dallas, Texas, and CEO Weldon Spangler will retain his current role.
According to Spangler, the idea for the merger came about as both companies were contemplating their future. The merger is seen as a strategic move to strengthen both brands and enhance their global footprint. With a combined total of 189 restaurants in the U.S. and the U.K., the new entity aims to streamline operations and leverage synergies to drive growth. Additionally, the merger will allow for more efficient management of the remaining 400 locations operated by franchisees across 44 countries.
TriArtisan Capital Advisors acquired TGI Fridays from Carlson Restaurants in 2014 for over $800 million. Despite initial growth plans and attempts to go public in 2019 through a special purpose acquisition company, the deal fell through due to market uncertainties caused by the Covid-19 pandemic. In 2022, TGI Fridays saw a modest revenue increase of 3.6% to $75.2 million, signaling a need for strategic restructuring and focus on core offerings.
In response to changing market dynamics, TGI Fridays is shifting its focus back to its core strengths, particularly in the bar and beverage offerings. By capitalizing on the profitability of alcoholic beverages in the restaurant industry, the company aims to drive revenue growth and enhance customer experience. Additionally, the appointment of industry veterans like Ray Risley as U.S. president demonstrates a commitment to bringing in fresh perspectives and expertise to drive operational excellence.
Despite recent strategic initiatives, TGI Fridays continues to face challenges in the competitive casual-dining segment. The closure of 36 underperforming restaurants in the U.S. earlier this year highlights the need for proactive measures to adapt to changing consumer preferences and market trends. As the company navigates through a post-pandemic recovery phase, strategic partnerships and operational efficiencies will be crucial in driving sustainable growth and profitability in the long term.