A $380M deal struck late last year to take TGI Fridays public has fallen through, crushed by the condition of the restaurant industry in the wake of the coronavirus pandemic.

Allegro Merger Corp., a company formed for the purpose of taking the restaurant chain public through a merger, said in an 8-K filing with the Securities and Exchange Commission that the deal was off by mutual agreement between it and Dallas-based TGIF Holdings. The document cited "extraordinary market conditions and the failure to meet necessary closing conditions."

With the merger off, Allegro will return the funds it raised in its initial public offering, and will then cease to exist.

Investment firms TriArtisan Capital and MFP Partners own Fridays, which operates 396 U.S. locations and 446 restaurants in other countries. About 82% of the chain is franchised. Part of the plan to take the chain public involved revamping its locations, with special emphasis on improving its bar component, to increase sales. It isn't clear now what will happen to those plans.

Even before the coronavirus pandemic, Fridays suffered from sluggish sales. The company closed 30 restaurants in 2019, and saw same-store sales drop 11.3% year over year during the fourth quarter of 2019, with traffic down 9.1%. The company lost $21.1M in its fiscal year 2019, ended Sept. 30.

The chain's difficulties are hardly unique in the mid-priced sector, with such restaurants facing a variety of challenges, such as market saturation and a lack of enthusiasm among millennials for their brands. Last year, Applebee’s, Ruby Tuesday, Red Robin, Fuddruckers, O'Charleys and Chili's all closed dine-in locations.

With the onset of the pandemic, most U.S. restaurants in most places have closed for dine-in service, costing the industry billions, and it is uncertain how many of them will reopen after the crisis runs its course.

For the week ending March 29, transactions at restaurants dropped 42% compared with the same period in 2019, market research firm NPD reported.

Quick-service restaurants suffered transaction declines of 40% year over year in the week ending March 29, while full-service restaurants, which aren’t usually set up to facilitate off-premise dining, suffered a decline of 79%, NPD said.