The Epic Mess at TGI Fridays

Summary

Summary of "The Epic Mess at TGI Fridays" Episode of The Journal

Introduction

In the January 24, 2025 episode of The Journal, hosts Jessica Mendoza and Ray Blanchette delve into the tumultuous journey of the iconic casual dining chain, TGI Fridays. The episode, titled "The Epic Mess at TGI Fridays," explores the restaurant's rise to cultural prominence, its subsequent decline, and the efforts to revive the brand amidst challenging times. Through insightful discussions, interviews, and firsthand accounts, the episode paints a comprehensive picture of TGI Fridays' impact on American dining culture and the business maneuvers that have shaped its trajectory.

Historical Significance of TGI Fridays

Jessica Mendoza opens the discussion by contextualizing TGI Fridays within American pop culture, referencing its appearances in two significant films: Cocktail (1988) and Office Space (1999). She explains how these portrayals reflect the brand's influence and evolution over time.

• Cocktail (1988): Tom Cruise's character showcases the art of mixology, performing flashy cocktail-making tricks in a TGI Fridays location, symbolizing the restaurant's early reputation as a hub for skilled bartenders and vibrant social scenes.

  "Tom Cruise's character learns how to mix drinks like a pro, doing flashy tricks as he makes cocktails. And some scenes were filmed at a Friday's, which at the time was considered a gold standard of mixology." [00:05]

• Office Space (1999): The fictional Tchotchkes restaurant mirrors TGI Fridays' atmosphere but highlights operational inefficiencies and employee dissatisfaction, hinting at underlying challenges the chain would later face.

  "One of the characters, a server played by Jennifer Aniston, hates working there." [01:20]

The Rise of TGI Fridays: Leadership and Expansion

Heather Haddon, a Wall Street Journal restaurant correspondent, provides an overview of TGI Fridays' ascent. Founded in 1965 by Alan Stillman, the chain became one of New York City's pioneering singles bars, facilitating social interactions among young professionals.

"TGI Fridays is known for its bar, for its comfort food, for its appetizers, stuffed potato skins, and a place to meet people. Maybe have a happy hour after work. Maybe bring your kids." [01:45]

Ray Blanchette, the episode's guest and former CEO, recounts his early years with the company. Hired in 1989 as a 23-year-old manager in training, Ray was captivated by the restaurant's energetic environment and commitment to high standards.

"It was like a Cirque du Soleil show back there in the kitchen. I mean, it was crazy. And we would have people literally lined up down the entire front side of the building." [06:11]

Under Ray's leadership, TGI Fridays expanded internationally, tapping into emerging markets in Eastern Europe post-Cold War. By 2007, the company had achieved significant milestones, including $2 billion in US sales.

Challenges and Decline

Despite its earlier successes, TGI Fridays began experiencing hardships in the 2010s. The rise of fast-casual competitors like Chipotle, offering fresher and quicker dining options, eroded Fridays' customer base. Mounting financial pressures led to multiple changes in leadership.

Heather Haddon elaborates on the broader struggles within the casual dining sector, noting shifting consumer preferences and operational challenges.

"TGI Fridays is, to some degree, emblematic of a lot of casual dining restaurants right now are going through, which is tough times." [02:06]

By 2018, sales had stagnated, prompting the private equity firms Sentinel Capital Partners and Triartisan Capital Advis Advisors to acquire the company in 2014. Their strategy involved transitioning TGI Fridays to an asset-light franchise model to stabilize finances and encourage growth.

Private Equity Takeover

Heather Haddon discusses the appeal of TGI Fridays to private equity investors, highlighting the chain's ability to generate steady cash flows and the benefits of an expanded franchise model.

"The franchisees are taking on a lot of the potential reward and also risk of running these restaurants. And they pay royalties to the owners." [09:22]

However, this shift also meant that corporate oversight diminished, potentially impacting the consistency and quality that had initially defined the brand.

Ray Blanchette’s Return and Strategy

In 2018, as the company grappled with declining performance, TGI Fridays reached out to Ray Blanchette to steer the brand back on course. Excited by the opportunity, Ray returned with a vision that differed from the private equity owners' approaches.

One of his notable actions was appearing on the reality TV show Undercover Boss in 2019. Disguised with a blonde wig and fake goatee, Ray worked incognito at a Maryland location, uncovering operational deficiencies that had strayed from the brand's high standards.

"When you see that we had allowed the business to not adhere to those same high standards, that was distressing." [12:26]

Conflicts emerged between Ray and the private equity owners over strategic initiatives. Ray resisted certain changes, such as introducing sushi to the menu, which he felt conflicted with TGI Fridays' core identity and received negative feedback from customers.

"TGI Fridays has sushi. I decided to try their sushi. You see that? It was disgusting." [13:29]

The COVID-19 pandemic further exacerbated the challenges, crippling sales despite efforts to bolster takeout operations. By 2023, the situation deteriorated, leading to bankruptcy filings and multiple CEO departures.

Revival Efforts and Future Plans

Undeterred by previous setbacks, Ray Blanchette seized the opportunity presented by bankruptcy to reacquire eight TGI Fridays franchises. Now back at the helm, Ray is spearheading a strategic overhaul aimed at revitalizing the brand.

Key elements of Ray's strategy include:

1. Streamlined Operations: Emphasizing smaller menus and shorter operating hours to enhance efficiency and reduce overhead.

2. Strategic Locations: Positioning TGI Fridays in transportation hubs like train stations, airports, and hotels to capitalize on captive audiences seeking reliable dining options.

   "When you walk into a hotel and you're checking in at 9 o'clock at night... It's a relief because now you know your rental car is parked. You can trust that you're going to get a good hamburger and you don't have to leave." [15:26]

3. International Expansion: Focusing on aggressive growth in international markets, particularly in South and Southeast Asia, where opportunities remain untapped.

   "We're still signing new development agreements... there are a lot of places for us to continue to grow with the right partners." [15:53]

Ray emphasizes that the revival of TGI Fridays hinges on fostering a strong internal culture and upholding the brand's foundational values.

"Our brand is expressed through people... the culture and the values and sort of establishing the white lines in the road for how we're going to interact. That's a really important piece of any turnaround." [16:26]

Lessons Learned

Heather Haddon reflects on the broader implications of TGI Fridays' journey, highlighting the challenges vintage brands face in adapting to a changing market landscape.

"TGI Fridays is a lesson on both casual dining and how much joy it has brought to America and how good of a concept it has been, but how challenging it is to keep these vintage brands going in a new America." [17:42]

The episode underscores the importance of adaptability, brand integrity, and cultural relevance in sustaining long-term success within the volatile hospitality industry.

Conclusion

"The Epic Mess at TGI Fridays" offers a nuanced exploration of a beloved American institution's struggles and strategic pivots. Through engaging storytelling and expert insights, The Journal sheds light on the complexities of maintaining brand legacy amidst evolving consumer preferences and economic pressures. Ray Blanchette's unwavering dedication to TGI Fridays serves as a compelling narrative of resilience and strategic vision in the face of adversity.

Transcript

[Jessica Mendoza]

The story of how the casual restaurant chain TGI Fridays has shifted in American culture can, in some ways be told through two movies. First, the 1988 film Cocktail. A young Tom Cruise, at the height of his cool, starred as a college dropout who becomes a bartender. You know how to make a red eye, Mr. What's your name?

[Ray Blanchette]

Brian Flanagan. Sorry, I haven't had the pleasure as yet.

[Jessica Mendoza]

Tom Cruise's character learns how to mix drinks like a pro, doing flashy tricks as he makes cocktails. And some scenes were filmed at A Friday's, which at the time was considered a gold standard of mixology. The second film came out over a decade later. Hey, guys, Office space.

[Ray Blanchette]

What's up, G?

[Jennifer Aniston]

Wanna go to a Chachki's, get some coffee?

[Jessica Mendoza]

Part of the movie takes place in a restaurant that's a lot like TGI Fridays. Called Tchotchkes. It sits in a nondescript strip mall and has a big wooden bar and antique Tiffany lampshades. But there's never many customers, and the staff is totally annoying.

[Ray Blanchette]

So can I get you gentlemen something more to drink?

[Jessica Mendoza]

Or maybe something to nibble on? Some pizza shooters, shrimp pops, or Extreme fajitas?

[Jennifer Aniston]

Just coffee.

[Jessica Mendoza]

Okay. Sounds like a case of the Mondays. One of the characters, a server played by Jennifer Aniston, hates working there.

[Alan Stillman]

If you want me to wear 37 pieces of flair like your pretty boy.

[Jessica Mendoza]

Over there, Brian, why don't you just.

[Alan Stillman]

Make the minimum 37 pieces of flair?

[Jessica Mendoza]

But between these two extremes, TGI Fridays earned a solid place in American culture.

[Heather Haddon]

TGI Fridays is known for its bar, for its comfort food, for its appetizers, stuffed potato skins, and a place to meet people. Maybe have a happy hour after work. Maybe bring your kids.

[Jessica Mendoza]

That's our colleague Heather Haddon, who covers restaurants. Sum up for us. What's happening at TGI Fridays today?

[Heather Haddon]

Yeah, so TGI Fridays is, to some degree emblematic of a lot of casual dining restaurants right now are going through, which is tough times. These vintage, historically very popular restaurants now just aren't popular like they were previously. And TGI Fridays is a particularly egregious example of that.

[Jessica Mendoza]

Now, after cycling through multiple CEOs and running behind on millions of dollars in bills, TGI Fridays has declared bankruptcy. It's down to about 150 restaurants from a high of about 800 more than a decade ago. And the company is struggling to find a way forward. So it's pretty safe to say TGI Fridays is not in a good place right now.

[Heather Haddon]

TGI Fridays is definitely not in a good place it is not a happy happy hour place right now.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Friday, January 24th. Coming up on the show, will TGI Fridays survive to see more Fridays?

[Alan Stillman]

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[Jessica Mendoza]

TGI Fridays often gets credit as one of the first singles bars in New York City. It opened in 1965, and its founder Alan Stillman's original idea was to create a place where single people, people like him, could go for drinks after work and mingle. Here's Stillman years later in an interview on cbs. Is it fair to say you got.

[Heather Haddon]

Into the business because you wanted to meet women?

[Ray Blanchette]

Absolutely fair. Not only fair, but accurate and true. And it worked.

[Jessica Mendoza]

But the Fridays that we know today comes from when the company had already started expanding and opening up franchises. Friday's created its iconic look in the 1970s. Faux antique Tiffany lamps, a big raised wooden bar at the center of the restaurant, and a focus on cocktails that evolved into what was known as a quote drink bible. The bartenders learned tricks and they hosted regular bartender Olympics. Fridays also claims to have invented the Long island iced tea. The food was classic bar fare. Cheeseburgers, Caesar salad, onion rings.

[Ray Blanchette]

Out here, it's Monday, in here, it's Friday.

[Jessica Mendoza]

One of its restaurants was in Philadelphia. That's where a man named Ray Blanchett developed an obsession with TGI Fridays.

[Ray Blanchette]

I still remember vividly the first time I saw a platter of baby back ribs, right? I mean, it's like the length of the entire platter. And then you get this big pile of fresh cut french fries, you get this big pile of coleslaw, and then you get the apple butter barbecue sauce. And I just, I remember watching it go by and I thought, my God, that is one of the most beautiful plates of food I've ever seen.

[Jessica Mendoza]

Ray was hired in 1989 as TGI Fridays was on the rise. Ray would go to become CEO. But when he started out, he was a 23 year old manager in training. And when he walked in the door to that Philadelphia restaurant, he couldn't believe what he saw.

[Ray Blanchette]

People are yelling back and forth. Everybody had to be where they were supposed to be at the right time, where you dropped the ball. And so it was. It was like a Cirque du Soleil show back there in the kitchen. I mean, it was crazy. And we would have people literally lined up down the entire front side of the building. We had theater ropes, and you'd have to go out there 1 15ish, usually, and say, you know, from this point in the line back, you're not going to get in tonight. You know, being three and four deep was an everyday occurrence.

[Jessica Mendoza]

Ray was hooked. He climbed up the ranks, eventually leading the company's expansion into Europe and other overseas locations.

[Ray Blanchette]

Back when I was running Europe, it was literally six years or seven years after the wall came down. So, like the Berlin Wall, all the eastern former Soviet bloc countries were emerging markets for us. I opened three restaurants in Poland in 12 months, opened the first restaurants in Russia and the Czech Republic and Hungary, and it was just. It was fascinating.

[Jessica Mendoza]

For the record, as a kid in the Philippines, I loved going to Fridays. It's funny because I grew up in Manila and my family and I would go to TGI Fridays. It was one of the restaurants on our rotation after church. And I used to, as a kid, order the cup of Dirt a lot. Oh, yeah, it was the one with the, like. It was like a mudslide with, like, gummy worms. I thought it was so cool that it looked like dirt.

[Ray Blanchette]

Chocolate pudding, Oreo crumbs, and gummy worms kind of leaching out a little bit. Exactly, yeah.

[Jessica Mendoza]

What's your favorite meal or favorite cocktail at. At the restaurant?

[Ray Blanchette]

Long Island Iced Tea. Yeah. You know, I can't say that I drink a lot of Long Island Iced Teas, but I think if I was gonna. If I was going to tell somebody. What cocktail should you have if you're going to Fridays for the first time? Well, you got to have an lit.

[Jessica Mendoza]

Ray's passion for TGI Fridays kept him at the company for nearly 20 years, though he would step away in 2007. By then, Fridays was at its peak, hitting $2 billion in US sales alone. In 2008, the company's rapid growth caught the attention of two private equity firms, Sentinel Capital Partners and Triartisan Capital Advis Advisors. Together, they bought TGI Fridays in 2014. Why are private equity investors interested in companies like TGI Fridays?

[Heather Haddon]

Well, one great thing about restaurants is they generate a lot of cash, so they have steady cash flows. And especially if they're managed well, you know, there's money coming in and there's money coming to the company, and that is great for private equity and other investors. And also when these private equity firms came in, they really pushed to shift TGI Fridays from an ownership model of its restaurants to having franchisees run its restaurants. And that's really helpful for the company in that it makes for this asset light model.

[Jessica Mendoza]

Companies that rely on franchisees are enticing to private equity because it reduces the risk for the owners.

[Heather Haddon]

So the franchisees are taking on a lot of the potential reward and also risk of running these restaurants. And they pay royalties to the owners. So it helps kind of reduce some of the risk and liability for the company that owns them and helps them to grow. Hopefully these franchisees are invested in their restaurants and growing their restaurants and making them successful, and that benefits the parent company.

[Jessica Mendoza]

But by the 2010s, the market was shifting. Chains like TGI Fridays were losing customers to fast casual restaurants like Chipotle, where people could order fresh food at the counter and take it to go. And that change was bad news for TGI Fridays. By 2018, sales at existing locations were in a nearly two year funk. It was then that Friday's financial managers turned to the old guard and called up Ray Blanchette. When Ray got the offer, he couldn't have been more excited.

[Ray Blanchette]

The private equity group that had bought Fridays called me and said, hey, do you wanna. Would you be willing to come back to TGI Fridays? We're in kind of a situation. And I mean, to me, it was the job of a lifetime. You know, it was my dream job. So I was happy to come back.

[Jessica Mendoza]

But Ray quickly saw that the Fridays he returned to was very different from the one he'd left. That's after the.

[Jennifer Aniston]

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[Jessica Mendoza]

Ray Blanchette had been away from TGI Fridays for about a decade. And in that time, things had changed. To find out just how much, Ray took an unorthodox approach. In 2019, months after becoming CEO, he appeared on the reality TV show Undercover Boss.

[Ray Blanchette]

Today, I'm undercover in my own company, TGI Fridays, to make sure. Our strict standards are being upheld.

[Jessica Mendoza]

Ray posed as a man looking to start a new career. He wore a blonde wig and a fake goatee. In the episode he trained in a restaurant in Maryland. The bartender there pointed to a hole in the ceiling. We had a massive flood, and this collapsed in the middle of shift. The roof has to be completely leveled out, but the waiting on the corporate approval part is just. It's a pain in the ass. What were some of the things that stood out to you that you saw when you were on that show?

[Ray Blanchette]

You know, I grew up in the TGI Fridays that was fanatical about standards. I mean, there would never be broken equipment. There would never be a leaky roof that didn't get rectified immediately. The standard was set at every level in the organization. And so when you see that we had allowed the business to not adhere to those same high standards, that was distressing.

[Jessica Mendoza]

As CEO Ray and his team tried to turn Fridays around, but he says he had a different vision from the owners.

[Ray Blanchette]

They were more committed to some of these initiatives that I was less excited about, and it's their ball in their field, so they get to decide. But I wasn't going to compromise my integrity or pretend that I believed in these initiatives anymore.

[Jessica Mendoza]

What were some of those initiatives like?

[Ray Blanchette]

Sushi inside the restaurant. Yeah, I just thought it was ridiculous.

[Jessica Mendoza]

Some customers seem to feel the same way and said so on social media.

[Ray Blanchette]

Y'all. TGI Fridays has sushi. I decided to try their sushi. You see that? It was disgusting. Who's eating this? I just want to know. It tastes foul. What the is this? What the is this?

[Jessica Mendoza]

Triartisan, the private equity firm, said that sushi was part of an effort to adapt with the times and become more relevant. And it's said that Ray supported the sushi edition. Ray maintains that he did not. Sushi sabotage or not, what really hurt Fridays was the pandemic. Despite beefing up its takeout operations in 2020, the company couldn't hit its sales targets in 2023, Ray left Fridays again. Three other CEOs followed in quick succession, and things just continued to unravel. Here's our colleague Heather again, it's a.

[Heather Haddon]

Combination of tgif, Friday's own issues, and also casual dining generally has really been struggling, and so they just couldn't rebuild in the way they had hoped. And from what I understand, there was friction between those CEOs and the board about correct approaches going forward. And here we are in bankruptcy.

[Jessica Mendoza]

Ray was watching from the sidelines or sort of the sidelines. He just couldn't truly quit Fridays. Not long after he left, he had acquired eight TGI Fridays franchises. When TGI Fridays filed for bankruptcy, he saw an opportunity to swoop in and revive the chain. Now he's getting that chance. Ray is back at the company and is now responsible for managing hundreds of TGI Fridays worldwide. And his plan doesn't involve returning to the glory days. Instead, he's focusing on smaller menus and shorter hours. And he wants to put Fridays in transportation hubs like train stations and airports and in hotels, places where there's a captive audience.

[Ray Blanchette]

When you walk into a hotel and you're checking in at 9 o'clock at night and you look over and you see that it's a Friday's Cafe or Friday's Grill, whatever you call it. It's a relief because now you know your rental car is parked. You can trust that you're going to get a good hamburger and you don't have to leave.

[Jessica Mendoza]

Ray also says that the future of Fridays isn't just in the us. His plan includes being aggressive about expanding overseas internationally.

[Ray Blanchette]

We're still signing new development agreements. We have 30 restaurants in Manila. Well, we have zero restaurants in Bangkok. Right. So when I think of south and Southeast Asia, there's nothing in Vietnam, there's hardly anything in India. We still have big opportunity. We're not in Singapore. I mean, there are a lot of places for us to continue to grow with the right partners.

[Jessica Mendoza]

And so you're going to be the guy to save the company? Is that how you feel right now?

[Ray Blanchette]

I'm going to be the guy that brings the people together that change the trajectory of the business. Right. I mean, if I haven't Learned anything over 30 years, I've certainly learned that our brand is expressed through people. Right. This is a labor intensive business and the culture and the values and sort of establishing the white lines in the road for how we're going to interact. That's a really important piece of any turnaround. But especially at Fridays. It starts culturally within the Friday's family.

[Jessica Mendoza]

I asked Ray if he was worried about Fridays not being cool anymore.

[Ray Blanchette]

You should be in one of my restaurants at 10:00 at night. You'd have a hard time saying this place isn't, isn't fun. I mean, cool, I think is, is ridiculous. Right? You can't chase cool. I mean, who are we, James Dean? I mean, people are gonna, you know, I'm not. We're not trying to be cool. We have food that people get excited about. We have an atmosphere that is conducive to social interactions and social connections. And so that's why I think the brand gets turned around.

[Jessica Mendoza]

What's the lesson from TGI Friday's Rise and Fall?

[Heather Haddon]

I think TGI Fridays is a lesson on both casual dining and how much joy it has brought to America and how good of a concept it has been, but how challenging it is to keep these vintage brands going in a new America. I mean, I think tastes of change and younger people don't see going out to eat at all sometimes as what they want to do. So I think we do see something emblematic in TJF Fridays and how consumers eat out differently than they used to.

[Jessica Mendoza]

That's all for today. Friday, January 24 the Journal is a co production of Spotify and the Wall Street Journal. The show's made by Kathryn Brewer, Pia Gadkari, Rachel Humphries, Sophie Codner, Ryan Knudson, Matt Kwong, Kate Linebaugh, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alessandra Rizzo, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhy, Jeevika Verma, Lisa Wang, Catherine Whalen, Tatiana Zemis and me, Jessica Mendoza, with help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapak and Peter Leonard. Our theme music is by so Wiley. Additional music this week from Emma Munger, Peter Leonard, Bobby Lord, Griffin Tanner, Nathan Singapok and Blue Dot Sessions. Fact checking by Mary Mathis, Kate Gallagher and Najwa Jamal. Thanks for listening. See you on Monday.