TGI Fridays, which closed 2 Long Island restaurants, among casual chains struggling with rising costs

TGI Fridays, which recently closed two restaurants on Long Island, joins a growing list of casual restaurant chains that have decreased their presence nationally and locally, citing factors including higher operating costs, experts said. 

The restaurant closed locations in Riverhead and Farmingville in late January, an employee at one of its remaining Central Islip locations confirmed. The chain also has a location in Valley Stream.

Officials with TGI Fridays did not respond to multiple requests seeking comment.

A decline in foot traffic combined with higher menu prices and increased overhead costs have made operating any full-service restaurant more challenging, local restaurant experts said. But the pandemic exacerbated economic hardships for casual chains like TGI Fridays, experts said. Sales among large national casual chains have been uneven, though the general trend points to a slowdown in their growth, said Donna Hood Crecca, principal of Technomic, a restaurant industry research firm based in Chicago.

"Casual dining is the second -largest segment of the restaurant industry in terms of total locations and sales, and its overall growth rate has slowed," Crecca said in an email.

Crecca, of Hauppauge, said like some other chains, TGI Fridays has struggled to stay relevant amid financial pressures stemming from the pandemic, as well as issues with its mix of debt and equity. TGI Fridays closures follow the Dallas-based chain's filing for Chapter 11 bankruptcy protection in November.

TGI Fridays “total sales declined 32.1% in 2024," Crecca said, and its total location counts "are down 40.5% as the chain shuttered dozens of locations in January 2024, continued closing restaurants during the year and declared bankruptcy in November,” she said.

Casual restaurants have a full waitstaff and typically focus on lunch and dinner with alcohol offerings.

More than 30 such chains nationally filed for bankruptcy last year, Crecca said, including Red Lobster. 

Factors behind struggling chains

Casual chains have faced the overleveraging of debt leading up to the pandemic, combined with high interest rates for loans and lines of credit, the increased cost of goods and increases in worker wages, experts said. 

“Menu prices reflected those higher inflationary pressures and labor costs,” said Jose Luis Rivas, a senior director at Fitch Ratings. “As a result, the consumer has been moving away from discretionary spending.”

Melissa Fleischut, president and CEO of the New York State Restaurant Association, a trade group representing 10,000 restaurants statewide, said the pandemic has led to an acceleration of closures throughout the state.

“Coming out of the pandemic, we’ve seen a lot more closures, both of chains and independents, that we didn’t anticipate,” she said.

Dorothy Roberts, president of the Long Island Hospitality Association, a trade group representing hoteliers, restaurateurs and caterers Islandwide, said inflated costs have increased the risk of opening a new eatery.

“If they are leasing space, their rent has gone up, the cost of insurance has really gone up, as well as food costs and labor costs,” Roberts said.

Below are five national casual restaurant chains that have closed Long Island locations over the past year.

Red Lobster

In September, seafood chain Red Lobster exited Chapter 11 bankruptcy protection while pursuing a sale of the business. In 2023, the Orlando, Florida-based chain lost $76 million and began closing dozens of its stores last year. The chain closed its Stony Brook site early last year. Six locations remain on the Island, according to the chain’s website. 

Friendly’s

While Friendly’s still has a local presence, the chain has closed restaurants, including the Miller Place location in 2023, joining a half-dozen other shuttered locations from Levittown to Middle Island. The chain has closed 33, or 26%, of its total nationwide stores in the past three years, according to Technomic. The chain has eight locations on Long Island, according to its website.

Carrabba’s Italian Grill

The casual chain closed its last two locations on Long Island — Smithtown and Central Islip — in early 2024. The chain, founded in 1986 and owned by parent Bloomin’ Brands, announced plans in February 2024 to close more than 40 underperforming locations across the country.

Denny’s

In October, parent company Denny’s Corp. announced plans to close 150 of the restaurant's lowest performing locations between the end of last year and through 2025. Over the past three years, the chain closed 155 stores, or 10%, of its overall national footprint, according to Technomic. Denny's closed its North Babylon eatery in 2024 and has only one location left on Long Island, in Centereach.

Boston Market

In February 2024, the Island’s last Boston Market, in Selden, closed its doors after shuttering its other locations over the years. The national chain was replaced by Tex’s Chicken and Burgers. Shortly after its sale to Engage Brands in 2020, the Colorado-based restaurant chain faced several lawsuits, including suits in New York and Arizona for unpaid wages, as well as a suit seeking $11.3 million from US Foods, a supplier, over unpaid vendor bills.