The company behind the UK arm of the TGI Fridays restaurant chain has said it plans to appoint administrators, putting the future of its 87 outlets and 3,000 employees in doubt.

The American diner brand could disappear from UK high streets after Hostmore, which is listed on the London stock market, said administrators from advisory firm Teneo would be appointed and its restaurants sold off to rivals. The restaurants will continue to operate as normal in the interim.

Hostmore said the sale – which will complete by the end of October – would generate less than its debts and it was suspending trading of its shares – whose value has 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 scuppered after the main US franchise owner that Hostmore had planned to buy said it had lost the rights to royalties and other payments generated by the TGI Fridays name.

An announcement revealing the end to those discussions wiped more than 90% off value of Hostmore’s shares.

It is unclear whether a suitor could still emerge to take on the TGI Fridays brand in the UK, or if all of its restaurants will be rebranded after they are acquired.

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

However, the company said: “Unfortunately, all of the board’s efforts to implement a lasting solution to support the long-term financial future of the business came against a highly challenging trading and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well-advanced, encountered adverse events outside the board’s control.

Founded in 1965 in New York by a group of friends, TGI Fridays – Thank God It’s Friday – aimed to combine classic American dishes such as burgers with a casual lively atmosphere.

It launched in the UK in 1994 and built up a large chain which was taken over by private equity group Electra Partners in 2014. Electra spun out the owner of TGI – Hostmore – in 2021, listing it in London.