TGI Fridays struck a deal with Kraft Heinz that will give the consumer packaged goods giant the right to use the Fridays brand name on frozen mozzarella sticks, loaded potato skins and other retail snacks for the rest of time.
The casual-dining chain used proceeds from the perpetual licensing agreement to pay off $137 million worth of debt, according to a report this week by S&P Global Ratings.
TGI Fridays and Kraft Heinz have had a licensing partnership since 2001. The new deal will allow Kraft Heinz to continue manufacturing and selling Fridays-branded items in grocery stores and other retailers indefinitely.
It was part of Fridays’ efforts to chip away at its debt, including a $375 million whole business securitization that had a key repayment deadline on April 30, S&P reported.
The nearly 600-unit chain has seen sales decline in recent years and has struggled to pay its creditors, per the ratings agency, which downgraded the company’s debt from B to B- in February.
In January, TGI Fridays sold eight restaurants to its former CEO, Ray Blanchette. And last month, it agreed to be acquired by U.K.-based franchisee Hostmore PLC in an all-stock deal valued at $220 million.
That deal is expected to close in the third quarter, at which point Fridays plans to refinance the rest of its securitized debt, according to S&P.
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