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TGI Fridays filing bankruptcy - $50 million in outstanding gift cards that don't expire
Posted on 11/8/24 at 9:08 am
Posted on 11/8/24 at 9:08 am
quote:
Restaurant chain TGI Fridays is experiencing a severe case of the Mondays. After filing for Chapter 11 bankruptcy last week, the chain is now contending with the expensive possibility of customers trying to redeem $49.7 million of gift cards that never expire.
The cards are a liability for the company trying to sell itself out of bankruptcy and likely unable to foot the bill for eight-figures worth of gift certificates—some of which date back to 2003, according to court filings.
https://fortune.com/2024/11/05/tgi-fridays-50-million-gift-cards-chapter-11-bankruptcy/
quote:
TGI Fridays’ franchisees rely on the corporation to reimburse them for redeemed gift cards. While the chain isn’t expecting all gift card holders to cash in on free burgers and fries, there’s real concern among franchisees that the company will be unable to scrounge together the funds—even including the $5.9 million the company is borrowing to jump start its restructuring—to account for a potential influx of gift card-wielding diners. Franchisees make up 122 of TGI Fridays’ U.S. locations, as well as 316 locations overseas. Meanwhile, the company owns 39 locations in the U.S., a strategy the private equity-owned restaurant chain employs to stay cost-efficient.
21
Posted on 11/8/24 at 9:10 am to Shexter
Shenanigans is better
Posted on 11/8/24 at 9:11 am to Shexter
quote:
While the chain isn’t expecting all gift card holders to cash in on free burgers and fries,
They aren't cashing on in Free anything
it was paid for.
Posted on 11/8/24 at 9:11 am to Shexter
A picture says a thousand words.
They lost their flair.
Posted on 11/8/24 at 9:14 am to Fun Bunch
quote:
They aren't cashing on in Free anything it was paid for.
Right. That liability had an offsetting asset at one point, just bad mismanagement.
Posted on 11/8/24 at 9:14 am to Fun Bunch
If a gift card expires, it is a scam
A gift card is an unearned revenue because providing a service (food) is earning the revenue
If they had better food, probably could have gotten more people to use their gift cards
A gift card is an unearned revenue because providing a service (food) is earning the revenue
If they had better food, probably could have gotten more people to use their gift cards
Posted on 11/8/24 at 9:14 am to CBandits82
quote:
Shenanigans is better
Hey Farva, what’s the name of that restaurant with all the goofy shite on the wall and the mozzarella sticks?
Posted on 11/8/24 at 9:14 am to Fun Bunch
That’s the reason it doesn’t expire it’s legal tender. Which is why I laugh when people issue gift certificates with an expiration. That expiration date is bs
Posted on 11/8/24 at 9:16 am to Shexter
It’s a black Friday for TGI Fridays.
Posted on 11/8/24 at 9:17 am to Shexter
quote:
filing for Chapter 11 bankruptcy
would take care of the
quote:
$49.7 million of gift cards that never expire.
in a reorganization plan
Posted on 11/8/24 at 9:18 am to Shexter
Gift cards are the biggest scam ever invented 
Turning currency that can be used anywhere to currency that can only be used in one specific place…just because that’s a “better” gift
Turning currency that can be used anywhere to currency that can only be used in one specific place…just because that’s a “better” gift
Posted on 11/8/24 at 9:19 am to Eighteen
pretty sure that's the whole idea behind it, baw
Posted on 11/8/24 at 9:21 am to CBandits82
quote:
Shenanigans is better
Posted on 11/8/24 at 9:21 am to Shexter
The business is so bad that $50 million in free money couldn't help them.
Posted on 11/8/24 at 9:21 am to 777Tiger
I got to the one in the DFW airport sometimes. They have some decent food, not great but serviceable.
Posted on 11/8/24 at 9:21 am to Shexter
I’m assuming a huge percentage of those cards are lost forever.
It still sits as a liability on the sheets because they have to honor it if it ever shows up but the percentage of them showing up will be extremely low.
It still sits as a liability on the sheets because they have to honor it if it ever shows up but the percentage of them showing up will be extremely low.
Posted on 11/8/24 at 9:23 am to StTiger
quote:
A gift card is an unearned revenue because providing a service (food) is earning the revenue
If they had better food, probably could have gotten more people to use their gift cards
Gift cards are typically a waste of money. A very very large portion of gift cards are never used - no matter how good/bad the food is.
Gift cards are normally win/win for the business. Either you pay for the gift card, it gets used, and you likely spend more money while there, or you never use it and it’s “free” money for the business.
Posted on 11/8/24 at 9:23 am to GeauxTigers123
quote:
I got to the one in the DFW airport sometimes.
same, if it weren't for that I wouldn't even know they were still in business
Posted on 11/8/24 at 9:26 am to Eighteen
quote:
Gift cards are the biggest scam ever invented Turning currency that can be used anywhere to currency that can only be used in one specific place…just because that’s a “better” gift
Indeed. My mom bought my brother a Gander Mointain gift card for his bday one year and they filed within a few weeks. Buh bye.
Posted on 11/8/24 at 9:40 am to terriblegreen
quote:
The business is so bad that $50 million in free money couldn't help them
That's part of the problem. They already received the $50M in revenue, now they are concerned they may need to fulfill those orders with $10M worth of food. Instead of earmarking those funds in a separate account, I am sure they made sure the executive offices and GMs received nice bonuses.
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