TGI Fridays completed its refranchising initiative this week, ahead of its own schedule, leaving the chain with ownership of about 10 percent of domestic units, a company executive said.
Ricky Richardson, chief operating officer of Carrollton, Texas-based TGI Fridays, told Nation’s Restaurant News that a 49-unit deal completed earlier in the week with Coral Cables, Fla.-based Gold Coast Holdings Restaurants, a new franchisee, completed the refranchising program about six months ahead of schedule. Terms were not disclosed.
Since launching the initiative in September 2014, TGI Fridays has refranchised about 175 restaurants in four transactions, going from about a 50-50 franchised vs. company-owned split, to 90-10, Richardson said.
“We thought it would take us about 18 months to get to the 90-percent [franchised] level,” Richardson said. “That is one of the benchmarks in this process.” The company now owns and operates about 50 of its 490 domestic restaurants, he said.
Internationally, Fridays restaurants are about 95-percent franchised, he said.
As part of the refranchising program, TGI Fridays is reimaging its restaurants as part of push that began last year.
“We have completed reimaging in the U.S. about 30 percent of the system,” Richardson said, which includes company-owned restaurants. “All of our refranchising transactions include capital commitments from our partners to reinvest and reimage their entire portfolio.”
Richardson said the company expects the system to be completely reimaged within about three years.
“We’ve been very excited about the reimaging, both from an anecdotal guest and research standpoint,” Richardson said. “There’s been an impact on the business, with not only the ability to grow topline sales. That’s been driven disproportionately by bar revenues, so it goes to core of what the Fridays brand is about and the fun and energy of the brand.”
The contemporary look also reenergizes the restaurant team as well, he said.
Richardson said the company was confident in its new franchise model.
“We were roughly 50-50 franchised for 20-plus years, so we have a lot of experience and a lot of existing franchisees. We’ve got depth in that area. Clearly when you go to a 90-10 model, you want to build those muscles stronger. So our connection with our franchise partners — how listen to, participate with and learn from them — is important.”
With the refranchising complete, Fridays is turning its attention to some technological aspects of the restaurants, Richardson said.
“We’ve got some cool technology we’re bringing into the business in fourth quarter,” Richardson said. Fridays will roll out handheld devices to its servers at all company-owned units.
“These will allow our servers to spend more time with guests, and it will allow our best servers to serve more guests and improve guest experience times and the ability to sell at the table,” he said.
Richardson added that Fridays has approached technology cautiously. “We wanted to make sure we didn’t take our team members out of the engagement with the guest. That connection is a very important part of a Fridays experience.”
TGI Fridays is owned by Sentinel Capital Partners, the New York-based private-equity firm, and TriArtisan Capital Partners, which acquired the company in mid-2014. Sentinel also owns Checkers Drive-In Restaurants, Fazoli’s Italian, Huddle House and Newk’s Eatery.
TGI Fridays has 900 restaurants in nearly 60 countries systemwide.