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TGI Friday's closes dozens of restaurants amid slumping sales

The fast-casual chain still operates over 800 restaurants around the world.
TGI Friday's currently operates 831 restaurants around the globe, 385 of which are in the U.S.
TGI Friday's currently operates 831 restaurants around the globe, 385 of which are in the U.S.AP
/ Source: TODAY

Amid changing consumer tastes and the rapid rise of food delivery services, casual restaurants across the country have been closing up shop or making big menu changes to keep up with the times. Over the last four years, Applebee’s, IHOP and Pizza Hut have closed hundreds of dine-in locations.

Casual dining chain TGI Friday's has become the latest operation to close dozens of locations after suffering a major profit loss in 2019.

The chain and its franchisees closed 34 restaurants last year, a spokesperson for the company confirmed to TODAY Food. According to National Restaurant News, overall sales were down 11.3% and locations saw a 9.1% decrease in traffic in 2019, as well. In November, the company merged with Allegro Merger Corp., a special purpose acquisition company, and announced a plan to go public this March in an effort to become profitable.

When reached via email, TGI Friday's management provided the following statement about the restaurant closures: “As part of the early stages of our business turnaround, we bought underperforming franchises, which creates a temporary loss of near term profit, including store closures. This investment materially changes the influence we hold over the brand domestically and meaningfully increases the impact to the company as we change the trajectory as demonstrated in Q1 2020. We are committed to investing in our people and creating jobs worldwide."

The company added that "the acquisition of the franchise restaurants re-energized teams who were happy to be back with Corporate."

Of course, the bar and and grill chain isn't the only casual eatery dealing with slumping sales.

Both Applebee’s and IHOP have faced similar issues. In 2017, Dine Equity, the parent company of the two brands, announced it would be closing between 105 and 135 Applebee’s restaurants and up to 25 IHOP locations.

“We are long overdue in rationalizing the size of our system and closing poorly performing restaurants,” Richard Dahl, interim CEO and chairman for Dine Equity, said during the company’s second quarter earnings call at the time.

Last year, Pizza Hut announced plans to close hundreds of its dine-in restaurants in order to shift the primary focus to its carry-out and delivery businesses.

“Pizza Hut continues to develop tailored action plans for our largest dine-in markets, while at the same time transforming the estate for a more compelling off-premise focused asset strategy,” Greg Creed, CEO of Yum! Brands, said during a company earnings call in August.

Despite the recent store closures, TGI Friday's still operates 831 restaurants, 446 of which are located overseas.

In an effort to appeal to more consumers, TGI Friday's has been offering more in-house dining specials, as well as invested "significantly" in its loyalty rewards program, Fridays Rewards. In 2017, the company also experimented with food and alcohol delivery via a service called Lash. This year, the chain is also planning to launch a new line of burgers with "unique flavors and unexpected toppings," and, like many eateries, will be expanding its plant-based offerings.

Other recent restaurant improvements go beyond the menu, with a focus on updating the interior ambiance. Those changes have included enhanced lighting, new music and seating arrangements that encourage socialization.