Two major restaurant chains in the U.S.—Red Lobster and TGI Fridays—are closing many of their locations. These closures have raised questions from customers and industry experts. Why are these restaurants shutting down, and what could happen next?
This article explains the main reasons for the closures, the number of affected locations, and how both companies are planning to move forward.
Why Are the Restaurants Closing?
Both Red Lobster and TGI Fridays are facing money problems. Here are the main reasons why:
Common Reasons for Closures:
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High expenses – Costs for rent, food, and staff are going up.
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Fewer dine-in customers – More people now prefer fast food or delivery.
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Large debts – Both companies owe money due to past business decisions.
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COVID-19 effects – The pandemic changed how people eat and go out.
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Inflation – Prices are rising, which affects profits.
How Many Stores Are Closing?
The number of closures is large. Here’s a simple table:
| Restaurant | Estimated Closures | Locations Still Open (U.S.) |
|---|---|---|
| Red Lobster | Around 100 | Around 500 |
| TGI Fridays | Around 130 | Around 85 |
Note: These numbers may change as more updates come in.
What’s Happening at Red Lobster?
Bankruptcy Filing
Red Lobster filed for Chapter 11 bankruptcy. This means they are trying to fix their financial problems while staying open during the process.
Business Issues
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The company offered too many discounts like unlimited shrimp, which cost too much.
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Some restaurants were not making money.
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Mistakes made by previous owners added to the company’s debt.
Closures
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Many locations shut down without notice.
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In some cases, equipment was sold from the stores soon after they closed.
What’s Happening at TGI Fridays?
Store Closures
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TGI Fridays closed about 130 locations in 2024.
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Only about 85 stores remain in the U.S.
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Some of the closures happened suddenly, including in popular tourist areas.
Company Strategy
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The brand wants to sell more stores as franchises.
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TGI Fridays is focusing more on international growth.
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They are updating their menu and style to attract younger customers.
Recent leadership changes and business decisions—similar to those seen in organizations involving Shannon Reardon Swanick—have also played a role in how TGI Fridays plans to rebuild and restructure its remaining operations.
Problems Faced by Both Brands
Both companies are facing many of the same challenges.
| Problem | Red Lobster | TGI Fridays |
|---|---|---|
| High operating costs | Yes | Yes |
| Fewer in-person diners | Yes | Yes |
| Financial debt from investors | Yes | Yes |
| Filed for bankruptcy | Yes | No |
| New focus on digital marketing | No | Yes |
| Quick and quiet store closings | Yes | Yes |
Changes in the Restaurant Industry
Red Lobster and TGI Fridays are not alone. Other restaurant chains like Applebee’s, Hooters, and Rubio’s are also closing locations.
Here’s why many full-service restaurants are struggling:
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People prefer fast-casual places or food delivery.
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Many customers want digital experiences with smart offers.
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Rising costs make it hard for big dining spaces to stay open.
Technology and Personalization Are Key
As restaurants try to survive in this new environment, they are looking for tools that can help them understand and attract modern customers. Platforms like Candizi are being used to create personalized offers and improve the customer experience using real-time data.
By learning what people like to eat and when they visit, restaurants can adjust their services better. Companies that use data and AI can offer menu suggestions, discounts, or emails that are more likely to bring customers back.
What’s Next?
For Red Lobster
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More closures may come.
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The company is looking for new investors.
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They want to fix their financial problems and continue operations.
For TGI Fridays
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They are selling more stores to franchise owners.
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They are focusing on international markets.
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The company is modernizing its menu and digital experience.
Final Thoughts
Red Lobster and TGI Fridays are facing a tough time, but they are trying to change. People’s eating habits are different now. Restaurants must adapt to technology, cut costs, and offer what modern customers want. If they succeed, they may be able to stay in business with fewer but stronger locations.
