- I ate the same meal at TGI Fridays and Chili’s to compare the two chains.
- TGI Fridays just filed for bankruptcy, while Chili’s is outperforming its competitors.
- I preferred the food and overall experience at Chili’s, though TGI Fridays did have meatier wings.
Chili’s and TGI Fridays are both big names in fast-casual dining, but their recent performance tells two very different stories.
Chili’s has been hitting its stride lately, with a 14% increase in same-restaurant sales and a 6.5% increase in traffic this summer compared to the same three-month period last year, according to a recent earnings report.
Meanwhile, TGI Fridays filed for Chapter 11 bankruptcy on November 2. Reuters reported the chain is facing $37 million in debt and plans to restructure by selling off its assets by January next year.
There are a few reasons for Chili’s gains in relevancy. The company said in its most recent earnings call that higher menu pricing, increased restaurant traffic, and value-focused meal combos have contributed to its success.
Successful social-media campaigns, a streamlined menu focusing on its most popular items, and cost-conscious options like the “3 for Me” combo, which starts at $10.99, have helped the chain’s growth, especially among younger consumers who value familiar favorites like burgers and wings at affordable prices.
CNN reported that the TikTok-famous Triple Dipper appetizer, which the company says is popular among younger customers, now accounts for 11% of Chili’s sales, and orders for the menu item grew by 70% in the last year.
“Chili’s has been proactive and they’re doing well. TGI Fridays, arguably, have kind of rested on the brand, and that was not enough, and so now they’re in bankruptcy,” John Bringardner, the head of Debtwire, told Business Insider.
Bringardner said that TGI Fridays is likely to follow a “typical playbook” for a restaurant or retail chain filing for bankruptcy, including shutting down unprofitable locations and seeking a sale of the business.
TGI Fridays said the main reasons for filing for bankruptcy were financial challenges from the COVID-19 pandemic and a flawed capital structure.
“This restructuring will allow our goforward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential,” said Rohit Manocha, the executive chairman of TGI Fridays Inc., which is privately owned by the private equity firm TriArtisan Capital Advisors.
I ate the same meal at TGI Fridays and Chili’s to see if I could spot any notable differences in value, quality, or overall experience — and possibly understand why one chain is thriving, while the other is struggling.
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