Thank God. It's Friday!Thank God. It's Friday!In the early 1970s, Jerry Hill, a DJ at the U.S. radio station WAKR, said,
'TGIF' is a common idiom used in the United States. It conveys the feeling of coming together on a Friday night to start the weekend after work has ended. At the same time, it is also the name of a famous family restaurant brand that started in New York in 1965.
TGI Fridays (TGIF) opened its first location in Yangjae-dong, Seocho-gu, Seoul, in 1992, and gained great popularity in South Korea. At one point, it surpassed Outback Steakhouse, operated by Dining Brands Group, and VIPS, run by CJ Foodville. In 2003, it ranked first among family restaurants based on sales revenue.
However, as the trend faded, TGIF began to decline. The number of locations, which had reached 60 at its peak, dropped sharply to 44 in 2014, 26 in 2020, and 14 last year.
According to the restaurant industry on the 2nd, TGIF will end its operations in the country this month. MFG Korea, which operates TGIF in South Korea, has decided to close all 14 remaining locations this month.
An official from MFG Korea noted, "We initially withdrew 10 locations in February and plan to close the remaining locations, including those in department stores, by March."
Having introduced the American-style family restaurant franchise to South Korean dining culture in 1992, TGIF is set to disappear from history after 33 years.
◇ Competitors are growing while... TGIF alone closes
Other family restaurant competitors have entered a second heyday since the pandemic.
Dining Brands Group acquired Outback in 2021. At the time of the acquisition, Outback's sales were 297.8 billion won, and its operating profit was 23.7 billion won. Just two years after the acquisition, in 2023, Outback's sales reached 457.6 billion won, and its operating profit increased to 79 billion won, marking increases of 53% and 233%, respectively.
An Outback official said, "Family dining and social gatherings among ages 35 to 49 have noticeably increased."
CJ Foodville, which operates VIPS, also recorded an operating profit of 45.3 billion won in 2023, the highest in its history. According to CJ Foodville, the average sales of new stores opened last year increased by 35% compared to 2023.
E-Land's low-cost family restaurant brand, Ashley Queens, is estimated to have recorded its highest ever sales of 400 billion won last year.
A representative from the Korea Restaurant Association said, "While other family restaurant brands are experiencing a recovery and entering a second heyday, TGIF paradoxically decided to withdraw. At a time when prices are polarizing across the restaurant industry, TGIF failed to decide whether to pursue premiumization or emphasize value for money."
◇ Traditional American menu returns as a boomerang
TGIF maintained traditional American menus and atmosphere. All major menu items contained a sweet sauce made with Jack Daniel's whiskey. Jack Daniel's is the best-selling whiskey brand in America. It was also TGIF that began to give bartenders English nicknames.
However, since the 2010s, familiar yet new dishes incorporating healthy diets and Korean cooking techniques, along with entirely unfamiliar dishes from third-world countries, began to emerge. Consumers seeking dining experiences in line with trends found TGIF's long-established American menu no longer appealing.
Additionally, the TGIF menu featured many items that were rich in cheese and cream or deep-fried. This was out of sync with the current trend toward health-conscious dining. Some semi-prepared foods provided for cost-saving purposes failed to meet the discerning taste of consumers.
At the same time, Outback, after being acquired by the local private equity fund SkyLake in 2016, infused Korean elements into its menu and service. The uniforms for employees were designed by Korean designers Steve J & Yoni P. The core materials and supplies used for the steakhouse were switched from frozen to fresh. While fresh meat is more expensive and harder to manage, the strategy was that 'customers will come if the food is good, even if it's expensive.'
◇ Failed synergy with existing brands like Mad For Garlic
The operator MFG Korea acquired TGIF from Lotte GRS in 2021. MFG Korea currently operates the Korean-Italian restaurant 'Mad For Garlic', which emphasizes garlic. At the same time, it has brands such as Hwanggong Eomuk Bakery, M Steak House, and Mad Wine Cave.
After the acquisition by MFG Korea, TGIF failed to create synergy with similar brands like Mad For Garlic and M Steak House. Conversely, brand management and marketing promotions were reduced. At a time when it needed to respond to competing family restaurant brands, its brand awareness weakened.
A representative from MFG Korea stated, "We are ending TGIF store operations in order to focus on the Mad For Garlic brand."
At the same time, competitors launched delivery and takeout services after COVID-19, aiming to strengthen their brands. Some brands even produced and sold meal kits under their names. They actively employed strategies to approach younger consumers, who are sensitive to trends and changes, using various digital marketing methods such as discount coupons and events.
Kim Ik-sung, an advisor to the Korean Distribution Association, said, "With the prolonged economic recession causing consumers to hesitate in opening their wallets, ultimately, one must compete with food and service to break through. It would be best to strengthen social media marketing or stimulate emotional factors and designs that consumers like to maximize the lock-in effect."
◇ The bankruptcy filing of U.S. TGIF also has indirect effects
The U.S. headquarters of TGIF is currently facing serious management difficulties. In November of last year, the U.S. headquarters filed for Chapter 11 bankruptcy protection. Chapter 11 is a restructuring and recovery process that allows a corporation to continue its operations while adjusting its debt. It is similar to judicial management or workout in South Korea.
The U.S. headquarters stated that it was unable to recover from the financial impact suffered during the COVID-19 pandemic and filed for bankruptcy protection. TGIF is struggling even in its headquarters and largest market, the United States. In 2008, there were 601 TGIF locations in the U.S., with sales reaching $2 billion (about 29 trillion won), which surpassed revenues of many large domestic food companies.
However, sales began to plummet sharply, falling to $728 million (about 1 trillion won) last year, a decrease of one-third. In particular, 50 locations closed in a year, significantly reducing the number of operating locations from 213 to 163.
MFG Korea stated regarding the termination of TGIF operations in South Korea, "This decision is separate from the bankruptcy filing of the U.S. corporation."
However, restaurant industry experts noted, "For a global brand that must continuously cooperate with its foreign headquarters, the headquarters' crisis soon becomes the crisis of its subsidiaries. In terms of management continuity, such as securing resources or investments, a small market like South Korea will be directly negatively impacted."