TGI Fridays, a popular casual-dining brand in the US, is about to make a massive move by effectively exiting the business of running restaurants and having franchisees do it for them.
The chain is owned by private-equity firms and plans to sell most of its 247 company-owned restaurants in the US and 63 in the UK.
“We had to decide: Are we a franchisor or an operator of restaurants?” asked TGI Fridays chief executive, Nick Shepherd.
“When you do both, the franchisees worry that the parent company is focusing on its restaurants first.”
As such, besides a fundamental shift in the model, the brand will also be remodelling the look and feel of restaurants and boost bar offerings and overhauling the menu to make it more relevant and attractive to customers and prospective franchisees.
It’s not the only brand to be making such a move. Burger King and Applebee’s have also been working towards a franchisee model in an effort to reduce the chains’ capital expenditures and maintain more stable revenue streams through franchise fees.