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TGI Fridays files for bankruptcy protection, becoming latest restaurant chain to falter

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TGI Fridays files for bankruptcy protection, becoming latest restaurant chain to falter

The American casual restaurant chain TGI Fridays filed for Chapter 11 bankruptcy protection on Saturday, citing a flawed capital structure and joining a host of its peers that have struggled this year in the face of rising everyday prices and changing consumer trends.

The chain — recognized by its red-and-white striped logo and kitschy interior design — has quietly been closing locations since January and shuttered 50 more last week before filing for Chapter 11 protection.

The company, based in Dallas, has not disclosed the locations of the store closings.

There are five TGI Fridays in California, including one in Los Angeles near Hollywood Boulevard, according to the company’s website.

TGI Fridays said it operates 39 company-owned locations and has secured financing to keep the restaurants open during bankruptcy. The bankruptcy will not affect 56 franchised restaurants, which are independently owned and operated.

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“The next steps announced today are difficult but necessary actions to protect the best interests of our stakeholders,” Executive Chairman Rohit Manocha said in a statement. “This restructuring will allow our go-forward restaurants to proceed with an optimized corporate infrastructure that enables them to reach their full potential.”

Fallout from the COVID-19 pandemic has also been a major driver of the company’s financial struggles, Manocha said. The chain plans to use its bankruptcy protection “to explore strategic alternatives in order to ensure the long-term viability of the brand,” the statement said.

The company did not respond to a request for comment.

TGI Fridays offers customers a wide array of classic American entrées along with milkshakes and ice cream sundaes. The chain, which got its start in Manhattan in 1965, helped popularize the “happy hour” concept and was at its peak a popular spot for celebrations and gatherings.

TGI Fridays bartenders trained Tom Cruise for his role in the 1988 film “Cocktail,” the company has boasted, and its waitstaff’s colorful button-filled uniforms were parodied in the 1999 film “Office Space,” starring Jennifer Aniston.

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The chain has been owned by private equity firms TriArtisan and Sentinel Capital Partners since 2014 and does not release financial results. According to the market research firm Technomic, company sales in the U.S. declined to $728 million last year, down 15% from the prior year, the Wall Street Journal reported.

TGI Fridays’ woes are part of a dominant trend that has also affected American casual restaurant chains such as Red Lobster and Denny’s. Middle-class consumers who once frequented such places are cutting back on discretionary spending, experts say, and the high price of goods and labor are squeezing profits.

Red Lobster filed for bankruptcy protection earlier this year after an all-you-can-eat shrimp fiasco contributed to financial losses; Rubio’s Coastal Grill did the same following the abrupt closure of 48 locations in California. The fast-casual burger spot Shake Shack closed nine underperforming restaurants in September, including five in the Los Angeles area.

The Associated Press contributed to this report.

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Labor board accuses Apple of suppressing employee discussions

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Labor board accuses Apple of suppressing employee discussions

Apple has been accused by the National Labor Relations Board of trying to prevent employees from discussing pay equity and pressuring an engineer who attempted to circulate an online survey about wages to quit.

In a complaint issued last week by the NLRB’s regional office in Oakland, federal labor regulators alleged Apple has unlawfully blocked discussion among workers in corporate offices by enforcing overly broad confidentiality rules and restricting their activity on the Slack messaging app and social media, as well as hampering their conversations with journalists.

The complaint alleges the company in 2021 barred employees from creating a Slack channel called #community-pay-equity and prohibited workers from discussing the financial incentives Apple uses to reach sales goals by claiming the topic included “confidential and proprietary information.”

Apple has publicly denied the allegations. “We strongly disagree with these claims,” a company spokesperson told Reuters. Apple did not immediately respond to a request for comment from The Times.

According to the complaint, Cher Scarlett, an engineer at Apple, faced reprisals after she participated in Slack discussions about workplace discrimination, helped found a campaign called “Apple Too” modeled after the #MeToo movement that was meant to encourage employees to share their experiences with racism and sexism, and created an online employee survey about pay equity.

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Instead of addressing her requests that the company clarify its rules regarding pay discussions, NLRB investigators found Apple told an attorney representing Scarlett at the time that she needed to stop making social media posts, while also pressing her to go on medical leave and offering her a severance agreement. These actions by the company, the complaint said, unlawfully forced Scarlett to quit.

Apple managers allegedly threatened other employees who posted on social media and in Slack and spoke to the press about workplace concerns, according to the complaint. Some were interrogated about their involvement with Scarlett’s pay equity survey and were told their activities were being monitored, and that they could be demoted, according to the complaint.

Issuing the complaint represents the NLRB’s first step in litigating the case after investigating an unfair labor practice claim submitted by employees and finding merit to the allegations. If a settlement with Apple is not reached, the case will be reviewed by an administrative law judge at a hearing scheduled for next June. The judge’s decision on what, if anything, Apple must do to address the issues raised in the complaint could then be appealed to the labor board in Washington and from there it could be appealed to federal court.

The NLRB’s general counsel is asking for a court order that would require Apple to post notices in offices and electronically in Slack and email explaining the rights of employees, as well as to conduct training for managers, supervisors and employees. The NLRB is also looking to force Apple to reinstate Scarlett, compensate her for lost pay and issue an apology letter.

The complaint is the third in recent weeks to hit Apple.

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On Sep. 27, the board’s regional office in Los Angeles issued a complaint accusing Apple of requiring employees across the U.S. to sign overly broad confidentiality and non-compete agreements and adhere to sweeping policies on misconduct and social media that violated employees’ ability to exercise their rights under federal labor law. The complaint stems from charges filed in 2021 by Ashley Gjovik, a former senior engineering program manager at the company, who claimed that an email sent by Apple Chief Executive Tim Cook, in which he pledged to punish employees who leaked company information, had a chilling effect on workers’ discussions of pay equity and discrimination.

And on Oct. 9, the NLRB’s office in Oakland issued another complaint alleging the company had maintained unlawful work rules and created an impression of surveillance, unfairly enforced policies and wrongly terminated an employee for their involvement in an open letter criticizing a technology entrepreneur Apple had hired. The complaint arose from claims made by Janneke Parrish, a former Texas-based product manager on Apple Maps and a leader of a #MeToo activist movement within Apple, who was fired in 2021.

The complaints by federal regulators highlight ongoing turmoil around organizing efforts by Apple employees both at the iPhone maker’s corporate headquarters and at retail stores. In recent years the board has also lodged complaints that Apple interrogated its retail workers in New York about their union support and confiscated pro-labor fliers in a store break room, and similarly interrogated employees in an Atlanta store and told staff that they would be in a less advantageous position if they voted for a union.

The company has denied wrongdoing.

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B. Riley-backed Vitamin Shoppe owner files for bankruptcy

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B. Riley-backed Vitamin Shoppe owner files for bankruptcy

Franchise Group, the company at the heart of a troubled management buyout that has devastated the stock of B. Riley Financial, has filed for bankruptcy — but plans to keep open most of its retail brands, including Vitamin Shoppe.

The retailer filed for Chapter 11 bankruptcy protection on Sunday, announcing it already had a deal with about 80% of its senior secured lenders that would allow them to convert their debt into ownership stakes and continue operating the businesses.

The company’s chains also include Pet Supplies Plus and Buddy’s Home Furnishings. Its fourth retailer, discount furniture and appliance seller American Freight, will be closed. American Freight operates more than a dozen stores in California, including outlets in Torrance, West Covina and Palmdale.

Westwood-based B. Riley took the Delaware, Ohio, company private last year in a $2.8-billion management-led buyout that turned disastrous amid slowing sales for Franchise Group and a scandal involving ties between its founder, Brian Kahn, and Prophecy Asset Management, a hedge fund that federal prosecutors allege defrauded investors of $294 million. Kahn has denied any wrongdoing.

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B. Riley took on $600 million in debt to underwrite the deal and lent Kahn $200 million over the years to establish Franchise Group and take it private — with most of the loan secured by shares of the retailer. B. Riley founder and co-ceo Bryant Riley has denied knowledge of any wrongdoing, but his firm’s dealings with Kahn are the subject of a Securities and Exchange Commission investigation.

Riley, in a letter Monday to employees, said he felt “personally sick about this result,” which would likely result in a total loss of any equity stakes in Franchise Group for the company, 69 employees and others, including wealth clients and institutional investors.

He added that the downturn in consumer spending and the scandal involving Prophecy could not have been foreseen, but that B. Riley is in “far better shape than folks give us credit for.”

B. Riley has already announced that it would mark down its investment in Franchise Group by up to $370 million and record a loss of up to $475 million when it files its second quarter earnings, which it has yet to do.

Shares of B. Riley were down 13% to $4.95 Monday on the Nasdaq. The stock traded close to $90 three years ago.

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Riley told The Times in September that the firm had lowered its debt related to the deal to about $380 million and was carrying $1.9 billion in total debt.

The financial services company has since been selling off assets to continue cutting its debt. Riley, in his letter, said that debt related to the Franchise deal would lower to $125 million by the end of the month.

In September, B. Riley said it had sold a majority stake in its Great American appraisal and liquidation business for about $203 million to Oaktree Capital Management, while retaining a 47% stake valued at roughly $183 million in a new holding company it formed with the L.A. distressed asset manager.

The company also sold off its its interests in a number of apparel brands and the former mall retailer Brookstone for about $236 million.

A few days ago, it said it had sold off a small portion of its wealth management business to Stifel Financial Corp. for up to $35 million in cash. Some 40 to 50 advisors, along with the associated customer accounts, are expected to move to Stifel early next year.

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Airlines team up with California to boost adoption of lower carbon jet fuel

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Airlines team up with California to boost adoption of lower carbon jet fuel

Jet airplanes spew enormous amounts of greenhouse gases and noxious chemicals, but the industry insists it wants to clean itself up.

Some of the largest commercial airlines and airborne cargo carriers in the U.S. have banded together to help solve the problem under their trade group Airlines for America. On Wednesday, the group announced a partnership with the California Air Resources Board to set policy to pave the way for wide adoption of sustainable aviation fuels, or SAFs.

Those fuels today are based on food waste and farm crops, although alternatives including hydrogen lie on the horizon. United Airlines started using some SAF in 2015. But SAFs’ share of the market is tiny, and they’re two to three times as expensive as jet fuel — basically kerosene — from refined oil.

Biofuels also draw criticism from many environmentalists because their supply chain still contributes carbon to the atmosphere, and much of what’s burned today is a mix of SAF and fossil jet fuel. And, they say, land used to grow corn and other fuel ingredients could be put to better use.

CARB and the airlines will “work together with sustainable aviation fuel producers, aviation stakeholders, and the federal government to ensure that at least 200 million gallons of cost-competitive options are available for use by airlines within California by 2035,” the air board said in a press release. “A Sustainable Aviation Fuel Working Group of government and industry stakeholders” will be created.

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The major focus will be on state and federal financial incentives and permit reform.

The plan was announced at a news conference at San Francisco International Airport on Wednesday. CARB Chair Liane Randolph said that “California is once again demonstrating that smart climate action is good for the environment and good for business.”

“This partnership with the nation’s leading airlines brings the aviation industry onboard to advance a clean air future and will help accelerate development of sustainable fuel options and promote cleaner air travel within the state,” she said.

The 200 million gallons “seems like a pretty modest goal to me,” said Aaron Smith, an agriculture and resources economist at UC Berkeley.

The federal government is aiming to create a supply of 3 billion gallons by 2030, which most industry observers consider an aggressive target.

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The passenger airlines and cargo carriers working with the state are Alaska Airlines, American Airlines, Atlas Air Worldwide, Delta Air Lines, FedEx, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, United Airlines, UPS and Air Canada.

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