The British arm of TGI Fridays is being put on the menu of prospective buyers amid a steep downturn which has hit much of the casual dining sector.
Sky News has learnt that Electra Private Equity is calling in City advisers to work on potential options for its ownership of the American-themed restaurant chain.
Sources said on Tuesday that a sale was one option that would be explored by Electra, but that it would also examine whether to use its financial firepower to acquire rival chains which had been hit by financial distress.
The move underlines the travails of many of the UK’s best-known restaurant chains, with higher labour, property and commodity costs having a savage impact on their profitability.
TGI trades from more than 80 sites in the UK, and is said to have demonstrated a resilient financial performance, although Electra declined to provide further details.
The business began life in New York in 1965, before arriving in Britain in the 1980s.
Its UK operations have changed owners a number of times since, the last occasion being in 2014 when Electra acquired it in a £225m deal from two other private equity investors.
Sources said they expected the chain to be sold rather than to act as a sector consolidator, even in an environment where many restaurant businesses are changing hands for distressed prices.
TGI has worked with Morgan Stanley, the Wall Street investment bank, on previous projects, although it was unclear whether it was acting on the latest process..
Electra’s decision to examine options for the UK arm of TGI Fridays comes just hours before Byron, the premium burger chain, faces a crucial creditor vote to approve a financial restructuring.
The chain has seen a downturn in trading performance in recent months amid broader pressure on the restaurant sector amid greater competition from high street and delivery-based rivals.
Last summer, Handmade Burger Co collapsed into administration, while companies including The Restaurant Group – which owns Garfunkel’s and Frankie & Benny’s – have been forced to change their leadership teams in an effort to revive their fortunes.
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Prezzo, the Italian-themed chain, is reported to have hired financial advisers to work on a restructuring.
An Electra spokeswoman declined to comment on its plans for TGI Fridays.