The company behind the UK subsidiary of restaurant chain TGI Fridays said it plans to appoint administrators, casting doubt on the future of its 87 businesses and 3,000 employees.

The American restaurant brand could disappear from the UK high street after London-listed Hostmore announced that advisory firm Teneo would be appointed administrators and its restaurants would be sold to a competitor. In the meantime, the restaurants will continue to operate as normal.

Hostmore said the sale, due to be completed by the end of October, would result in less debt and a halt to trading in its shares, which have fallen to almost zero. The company has debts of £35m.

The company has been trying to negotiate a rescue deal after £180m merger talks with TGI Fridays in the US collapsed last week. The deal was called off after the main US franchise owner that Hostmore was planning to buy said it had lost its rights to royalties and other payments generated by the TGI Fridays name.

The announcement revealing the end of the discussions wiped more than 90% off Hostmore’s stock value.

It is unclear whether the potential suitor would acquire the TGI Fridays brand in the UK or whether all of its restaurants would be rebranded following the acquisition.

Hostmore said its board had “inherited a very challenging set of circumstances” and had managed to cut annual expenditure by £12m, reduce losses from unprofitable stores and improve the customer experience.

However, the company said: “Unfortunately, all of the board’s efforts to implement a durable solution to support the long-term financial future of the business occurred against a very challenging commercial and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well advanced, were challenged by adverse events outside the board’s management.

Founded in 1965 in New York by a group of friends, TGI Fridays – Thank God It’s Friday – aims to combine classic American fare like burgers with a relaxed, lively atmosphere.

It launched in the UK in 1994 and built up a large chain that was acquired by private equity group Electra Companions in 2014. Electra spun off owner TGI Hostmore in 2021, and listed it on the London Stock Exchange.