There's a new leader with a familiar face at the helm of TGI Fridays, and he's aiming to ensure the casual restaurant brand's next chapter by exploring a potential move into hotels while operating the chain solely with franchisees.
Ray Blanchette III, the former CEO of TGI Fridays, said he is taking on that leadership role again for the reconstituted chain under a different name, Sugarloaf TGIF Management, where he's responsible for supporting an entity with more than 400 franchised restaurants in 41 countries. The parent of the 60-year-old chain expects to emerge from Chapter 11 bankruptcy protection this year without any corporate-owned locations after selling the last of its real estate holdings to a Blanchette-led entity and other franchisees.
Blanchette has a vested interest in enriching the TGI Fridays' brand: He added three franchised locations to his TGI Fridays' portfolio. One location includes a newly opened TGI Fridays in a Hilton Garden Inn Hollywood in Los Angeles, a site he points to as one way forward. The hotel eatery is in a highly trafficked tourist destination and run through a management contract in partnership with Aimbridge Hospitality, the world's largest third-party hotel operator.
"We looked at the success that TGI Fridays has had at airports, such as the restaurant at Dallas Fort Worth International Airport — Terminal B, which is the No. 1 restaurant and bar in all of America," he said in an interview. "When you are in the business of solving other people's problems, you want to make sure you are fishing in the right pond, and we felt there was an opportunity for a hotel."
Aimbridge Hospitality's corporate home is less than 10 miles from TGI Fridays' headquarters, and that proximity helped cook up a partnership between the two companies, Blanchette added. Aimbridge Hospitality did not respond to a request to comment
"When you get to your hotel — whether you are a business traveler or a leisure traveler — once you arrive after getting your rental car and finding the hotel, all you want is an ice-cold beer and to watch the end of the game," said Blanchette, who stepped down from his role as CEO of TGI Fridays in May 2023. "This is why I got personally involved in the Hollywood location, I think it's so strategic and important from a growth standpoint for TGI Fridays."
Combining hotels, franchisees
Blanchette declined to share additional details about TGI Fridays' potential expansion into hotels.
But he did say the move to hospitality could be a growth channel for all current franchisee owners. He added that it will be his job to build the long-term vision and strategy for the business with help from the company's investment board.
"We want to help them grow and come up with a recipe for Fridays that works," Blanchette added.
He acknowledges that the chain will face challenges as a new company and may have to try different approaches to find the best way forward.
Even so, he said the performance of franchisees show that this ownership model could work by looking to build on a brand that's known across the world.
"The international franchisees are having record growth, and they are still growing," Blanchette said.
He added that the company grew through innovation, so focusing on new items as well as venues could be in the chain's future.
"Domestically, Fridays is best when we can be disrupters and innovators, which is really the basis of the brand," he said. "We invented the Long Island Iced Tea and loaded potato skins. No one had really seen these menu items before we introduced them, and we want to continue to invest in innovation."
He added that going forward, "we want to put products that surprise and delight our customers in a meaningful way and reclaim our space in this area, which is deeply embedded in our culture."
Remaking a chain
Blanchette said he, as well as Anil Yadav of Yadav Enterprises and Mexico-based restaurant operator Mera Corp., ended up saving 28 TGI Fridays restaurants of the 39 corporate-owned locations tied up in bankruptcy court.
Those 28 restaurants are now run as franchises after TGI Fridays Inc. filed for bankruptcy protection in Texas in November, citing financial challenges tied to the pandemic and its capital structure. The bankruptcy does not include TGI Fridays' intellectual property, such as its brand, that is used by its franchisees.
The management of TGI Fridays' intellectual property and franchise support is now being led by Blanchette and his team.
Sugarloaf TGIF Management heads the franchise operations and its corporate structure, Blanchette said, as it leases space that once was TGI Fridays' Dallas headquarters.
The TGI Fridays Inc. entity offloaded its headquarters as part of a larger lease rejection motion through the bankruptcy court in November.
But now Sugarloaf TGIF Management has re-committed to some of the space, including a test kitchen as well as the first floor and a portion of the second floor of its office lease, taking about 75% of the office space once housing its headquarters, Blanchette said.
The lease, including the square footage, is expected to be finalized this month, he said. But he's looking at a new company in many ways.
"We filled as many roles as we could," he said. "It's a different-sized business without the corporate stores."