The UK operator of TGI Fridays has gone into administration as the hospitality firm scrambles to sell its chain of 87 restaurants across the country.

Hostmore, which owns TGI in this country, said it had appointed administrators from Teneo after plans to buy the US restaurant chain collapsed earlier this month.

The company is in the process of trying to sell the UK restaurants to new owners, which it hopes to complete by the end of September.

This would keep the TGI Fridays brand alive on British high streets and could save the jobs of approximately 4,500 staff employed across the UK. 

But it said earlier this month that it was not expecting to ‘recover any meaningful value’ from the sale of sites, meaning it would earn less from the sale than it owes to creditors and banks. 

It is also not clear whether it will secure a buyer for the entire chain, or whether it will manage to sell some but not all of the restaurants.

The American-inspired restaurant chain continues to stay open as normal while the administration process starts.

The collapse of the London-listed hospitality business comes after plans to buy the US restaurant chain for £177 million fell through earlier this month.

It would have merged with US-based TGI Fridays Inc, to create a larger firm that would remain listed in London.

But the takeover plans were dropped after a management change which would have meant it could not collect royalties from the TGI Fridays brand.

In a stock market update last Monday, Hostmore said sales so far this year are 12 per cent lower than the same period last year, blaming ‘persistent warmer weather than the comparative period in 2023 and underlying weak consumer spending’. 

The company also said it had abandoned plans to buy all the TGI restaurants in the US, where there are 128 sites, in a deal that would have been worth £177million.

Hostmore shares tanked by more than 90% after the news earlier in September, as shareholders took the brunt. Its shares are now worth less than 0.2 pence per share.

Its shares have now been suspended from the London Stock Exchange and the public company will be delisted and wound up.

TGI Fridays’ biggest market is in the US where there are 128 restaurants, including franchised sites, and it operates more than 270 in countries around the world.

It has had a short and terrible run as a public company, having come out of private equity trust Electra in November 2021.

While its shares started trading at 147p and got up to 156p on the opening day, they had more than halved by March 2022 and lost 90 per cent within a year.

Concerns among investors were linked to profit warnings, mounting debts and the number of loss-making TGIs it owns. 

Russ Mould, investment director at AJ Bell, told MailOnline earlier this week: ‘The collapse of Hostmore’s expansion plan is a huge blow and one that implies there may be to no value left in the listed business for shareholders.  

‘Having operated under the TGI Fridays brand in the UK for some time, Hostmore had been trying to buy the global master franchise owner. It was a bold deal from the start, given how Hostmore has struggled as a listed company from the very start. 

‘TGI Fridays is a name that now has more connotations with ‘remember the days’ nostalgia TV shows looking at past lives, rather than something that still holds its own against a growing number of modern chains.’

He added that the US buyout would have ‘significantly increased Hostmore’s scale and given it a big presence in America’ as well as releasing Hostmore ‘from the shackles of an existing franchise deal, which is described as restrictive’.

Mr Mould explained that the acquisition was scrapped after the UK group was removed as the manager of TGIF Funding, which owns the right to collect royalties from the TGI Friday’s restaurant franchise.  

He continued: ‘Without control over the royalty stream, the acquisition looks far, far less appetising.’

He added: ‘The company’s share price crashed after an expansion plan went up in smoke, implying there is little to no value left in the listed business for shareholders.’

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘TGI Fridays bounded onto the UK restaurant scene in the mid-eighties with its Americana-inspired decor and menus satiating the appetite for US cuisine dining.

‘Even though the chain had focused on reducing costs and significantly reduced losses from unprofitable stores, it wasn’t enough to keep the business afloat.

‘Given the brand recognition, its continued operation in more than 50 other countries and the level of loyal custom, it’s unlikely to disappear from the UK scene completely,’ Ms Streeter added.

She suggested that a new owner could ‘significantly reduce the number of outlets across the UK, and focus on its more successful restaurants such as in London’s Leicester Square’.

TGI was founded in New York in 1965 but the first UK outlet did not open until 1986 when it came to Birmingham – followed by London’s Covent Garden a year later.

The original restaurant was opened by Alan Stillman on the corner of 63rd Street and 1st Avenue in Manhattan and was inspired by circus performances.

The name stands for ‘Thank God It’s Friday’ and the restaurants quickly became known for their bartenders mixing cocktails in dramatic fashion.

TGI Fridays was founded in New York in 1965 when the first restaurant was opened by Alan Stillman on the corner of 63rd Street and 1st Avenue.

The themed restaurants – whose name stands for ‘Thank God It’s Friday’ were inspired by circus performances and became known for their bartenders mixing cocktails in dramatic fashion.

It took until 1986 for TGI to arrive in Britain when it opened in Birmingham, before the first London outlet came along in Covent Garden a year later.

By 1993 there were 12 UK restaurants, while the total had hit 41 by 2004.

In 2007, the UK chain was bought by Carlson Restaurants Worldwide and ABN Amro Capital, before Electra Private Equity invested in the group in 2014 and its total hit 66 sites.

In 2020, Hostmore came out of Electra in 2021 and the chain now has 87 outlets – but faces an uncertain future given its parent company’s struggles.