TGI Fridays, the Texas-based casual dining restaurant, has filed for bankruptcy protection, blaming problems with its capital structure and the after-effects of the Covid-19 pandemic.

The bar and grill chain, which has 39 restaurants in the U.S., said over the weekend that it has filed for Chapter 11. Those restaurants, as well as locations owned by 56 independent franchisees in 41 countries, including the U.S., will remain open, the company said. Independent franchises are not part of the bankruptcy.

The nearly six-decade-old chain has closed restaurants and facing the competition from trendier restaurants like Chipotle Mexican Grill (CMG), as well as a withdrawal of consumer spending due to inflation.

The TGI Fridays filing comes as Red Lobster emerges from Chapter 11

Rival casual restaurant chain Red Lobster, which grabbed headlines this year when it filed for bankruptcy, has received court approval to exit Chapter 11 and hand over control to private equity firm Fortress Investment Group, it said in September.

On Saturday, TGI Fridays Inc chief executive Rohit Manocha said the bankruptcy filing was “difficult but necessary”.

“The primary driver of our financial challenges resulted from COVID-19 and our capital structure,” Manocha said in a statement. “This restructuring will allow our restaurants to continue to move forward with an optimized corporate infrastructure that allows them to reach their full potential.”