In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the TGI Fridays franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a TGI Fridays franchise, based on Item 7 of the company’s 2019 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a TGI Fridays franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned TGI Fridays outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD

• Section V – Presentation and analysis of TGI Fridays’ financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average, median, high, and low gross sales for the upper 25%, mid-level 50%, lower 25%, and all 46 company-owned TGI Fridays restaurants open for the entire 2018 fiscal year

• 2018 average, median, high, and low gross sales for the upper 25%, mid-level 50%, lower 25%, and all 352 franchised TGI Fridays restaurants open for the entire 2018 fiscal year

Section I – Background Information

16 Things You Need to Know About the TGI Fridays Franchise

Partners with No Kid Hungry for Hunger Awareness Month

1.  At the beginning of September 2019, TGI Fridays announced that it was partnering with No Kid Hungry for Hunger Awareness Month. No Kid Hungry is a campaign to end childhood hunger in the U.S., and TGI Fridays is joining America’s other top restaurants in helping to raise funds for the cause.

2.  During the month of September, all customers of participating TGI Fridays restaurants in the U.S. had the chance to make a donation to No Kid Hungry in exchange for free menu items and special discounts on a future visit in October. These items and discounts included:

• $2 donations received a coupon for a free TGI Fridays appetizer (maximum $10 value) with the purchase of any entree;

• $5 donations received 20% off an entire meal (pre-tax, does not include purchase of alcoholic beverages); and

• $10 donations unlocked a Buy-One-Get-One-Free entrée to accompany orders of at least one entrée and two beverages.

3.  Online ordering also featured a special URL link leading guests directly to the No Kid Hungry donation page. All donations went to No Kid Hungry, which connects kids in need to effective food programs such as school breakfasts, summer meals, and afterschool meals.

4.  Ray Blanchette, CEO of TGI Fridays, said, “One in six children in America lives with hunger. Each $1 donation can provide up to 10 nutritious meals, which means every donation made at Fridays restaurants can make a real difference. Bringing people together for such a worthwhile cause is what the spirit of TGI Fridays is all about. Together, we can make a positive impact in our communities right where it is needed most.”

5.  Diana Hovey, senior vice president of Share Our Strength, the organization behind the No Kid Hungry campaign, added, “We are incredibly grateful for the support from TGI Fridays. With the help of committed partners like them, No Kid Hungry is helping children all over the country get the nutritious food they need to succeed.”

Turns Every Tuesday into National Cheeseburger Day with $5 Cheeseburgers

6.  In mid-September 2019, just before National Cheeseburger Day on September 18, TGI Fridays announced the launch of its own National Cheeseburger Day to begin Tuesday, September 17, and continuing every Tuesday after that.

7.  With the firm belief that Americans are hungry for a break, the restaurant brand is celebrating the iconic American meal with an offer that includes TGI Fridays’ signature cheeseburger and a side of seasoned fries for just $5.

8.  Cindy Syracuse, vice president of marketing for TGI Fridays, said, “Whatever else is happening in the world, we’ve found that Americans are still passionate about their cheeseburgers. So why wait for a National Holiday? We’re declaring National Cheeseburger Day to be not only this Tuesday, but every Tuesday at TGI Fridays.”

9.  America’s favorite meal is now America’s favorite deal. It’s part of TGI Fridays’ “Weekday Specials” – daily deals on the brand’s most popular dishes. All “Weekday Specials” are available all-day with no coupon required. It’s all part of TGI Fridays’ menu featuring “Day of Week” values on the brand’s most popular dishes, including:

• Cajun and Shrimp Pasta Mondays – A half-size order for just $5.99 or a full-size order for $8.99;

• $5 Cheeseburger Tuesdays – Fridays’ Classic Cheeseburger comes topped with lettuce, tomato, red onions, pickles, and a side of seasoned fries;

• $5 Chicken Sandwich Wednesday – Customers’ choice of either the Bacon Ranch Chicken Sandwich with fries or the Southern Fried Chicken Sandwich with fries;

• Big Ribs Thursdays – A half-rack of signature, slow-roasted ribs for $7.99 or a full rack for $12.99, with Fridays’ legendary coleslaw and seasoned fries. Available in the brand’s famous signature Whiskey Glaze or new Apple Butter Barbeque sauces; and

• $5 Everyday Cocktails – Enjoy a refreshing selection from the famous Fridays’ Rita, the classic Long Island Iced Tea, or a choice between the unique monthly offerings such as Mixed Berry Truly hard seltzer and Samuel Adams Octoberfest.

10.  Syracuse added, “Now, every day, you have a reason to bring a friend and come back again knowing that our most popular dishes and best values are always right here at Fridays. Start with America’s favorite meal – our signature Cheeseburger and fries this Tuesday.”

Company History

11.  TGI Fridays was founded in 1965 by Alan Stillman in New York City, New York. Stillman lived in a trendy neighborhood on the East Side of Manhattan near the Queensboro Bridge that was home to many models, flight attendants, secretaries, and other young professionals. In order to meet these young women, Stillman decided to open up a bar. At the time, there were only “guys’ beer-drinking hangout” bars that women usually did not visit, so Stillman set out to do something different.

12.  Despite having no experience in the bar or restaurant industry, Stillman went ahead with his idea and purchased a bar he often visited, The Good Tavern at the corner of 63rd Street and First Avenue, and renamed it TGI Fridays after the expression “Thank God it’s Friday!” Unintentionally, Stillman ended up creating one of the very first singles bars. Following the success of the first TGI Fridays (T.G.I. Friday’s at the time), Stillman began franchising in 1967 and opened a second location in Memphis, Tennessee.

13.  In 1971, Daniel R. Scoggin acquired the franchising rights to eight major midwest cities. A year later, Scoggin opened a new prototype in the Dallas suburbs that brought in families for the first time during the daytime. Attracted by this performance, Stillman merged into the Dallas franchise forming TGI Fridays, Inc. and Scoggin was the CEO for the next 15 years. Stillman sold the company in 1975, but Scoggin remained as CEO.

14.  By the early 1980s, TGI Fridays had more than 100 stores open. Around this time, the company developed the first international franchise and the template for future international development. Over the next few decades, TGI Fridays continued to grow both domestically and internationally. In 2014, TGI Fridays was sold to Sentinel Capital Partners and TriArtisan Capital Partners.

15.  Besides the United States, there are now TGI Fridays in over 60 countries, including Egypt, Argentina, Canada, Mexico, Ecuador, Brazil, Bahrain, China, Japan, Saudi Arabia, South Korea, Taiwan, the Philippines, Australia, the United Kingdom, and many more.

Entrepreneur’s Franchise 500

16.  TGI Fridays did not rank on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of TGI Fridays franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on TGI Fridays’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

• Outlets at the Start of the Year:  424
• Outlets at the End of the Year:  414
• Net Change:  -10

2017

• Outlets at the Start of the Year:  414
• Outlets at the End of the Year:  385
• Net Change:  -29

2018

• Outlets at the Start of the Year:  385
• Outlets at the End of the Year:  350
• Net Change:  -35

Company-Owned

2016

• Outlets at the Start of the Year:  58
• Outlets at the End of the Year:  54
• Net Change:  -4

2017

• Outlets at the Start of the Year:  54
• Outlets at the End of the Year:  53
• Net Change:  -1

2018

• Outlets at the Start of the Year:  53
• Outlets at the End of the Year:  68
• Net Change:  +15

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Historic Gross Sales for Company-Operated Fridays Restaurants

• Part 1 excludes 7 company-owned Fridays Restaurants, being those: 1) operated at non-traditional locations (e.g. airports and stadiums), and 2) open for less than the full 2018 fiscal year.

• Different assumptions and results may apply to Fridays Restaurants TGIF Inc. operates at non-traditional locations.

• As of December 31, 2018, the average length of time that the company-operated Fridays Restaurants included in Part 1 have been open is 20.2 years.

• Typically, company-operated Fridays Restaurants are located in areas with population densities in excess of 250,000 and in close proximity to regional shopping centers.

• The location of a Fridays Restaurant (whether company-operated or franchisee-operated) and the demographics of the geographic area can have a material impact on sales and expenses. Franchised Fridays Restaurants operated in areas with population densities less than 250,000 and/or with less favorable demographic profiles are likely to experience lower sales than the average company-operated Fridays Restaurant.

• All of the company-operated Fridays Restaurants offer substantially the same products and services to the public that franchised Fridays Restaurants are expected to offer.

• The company-operated Fridays Restaurants use a uniform accounting system and the data pertaining to these Fridays Restaurants was prepared by the company’s in-house accountants on a basis consistent with generally accepted accounting principles during the covered periods.

• The information contained in Part 1 reflects historical financial performance information related to the 46 company-owned Fridays Restaurants described above. This information has not been audited.

Gross Sales for 52 Weeks Ending December 31, 2018

Total 100%