TGI Fridays Inc., owner and operator of 39 domestic restaurants in the casual dining chain, requested Chapter 11 bankruptcy protection in the Northern District of Texas, marking another setback for America’s struggle the restaurant industry.

The filing comes at a critical time for the nearly 60-year-old chain, which already closed 50 locations last week, reducing its total U.S. presence to 163 restaurants from about 270 in early 2024.

The brand intellectual property, held by TGI Fridays Franchisor, LLC through a securitization agreement with a separate group of investors, is specifically excluded from the bankruptcy proceeding.

Newsweek reached out to TGI Fridays’ press contact via email Saturday for comment.

“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders, including our national and international franchisees and our valued team members around the world,” said Rohit Manocha, Executive Chairman of TGI Fridays Inc. statement.

Manocha identified him on Covid-19 pandemic and the company’s capital structure as major drivers of their financial challenges.

The once-popular restaurant chain, which began in 1965 in Manhattan as a singles bar that helped popularize the concept of happy hours and decorative flares for their employees, has secured debtor-in-possession financing to keep operations during the restructuring process. .

The company also filed with the Bankruptcy Court to continue its customer programs without interruption.

For the chain’s extensive franchise network – which includes 56 franchisees in 41 countries – operations will continue as usual. TGI Fridays Franchisor, LLC has implemented a transitional services agreement and provided interim financing to maintain support services while it develops a new long-term support structure for its franchise operations.

The bankruptcy filing follows recent problems in the company’s international operations. In September, the UK division of TGI Fridays faced its own crisis, leading to the closure of several restaurants and the loss of around 1,000 jobs after a takeover bid by its UK franchisee fell through.

TGI Fridays joins other victims of post-pandemic casual dining, including Red Lobster and Buca di Beppowho have also sought Chapter 11 protection in recent months.

The chain’s restructuring efforts come amid broader challenges facing the restaurant industry, including changing consumer preferences, inflationary pressures and the lingering impact of COVID-19 restrictions.

“This restructuring will allow our future restaurants to continue with an optimized corporate infrastructure that allows them to reach their full potential,” added Manocha.

The bankruptcy court must still approve various motions to allow the company to maintain normal business operations during the restructuring process.

While the immediate future of the 39 corporate-owned locations remains uncertain, the company’s franchise network continues to operate independently under the protection of bankruptcy proceedings.