Hugely popular themed restaurant chain files for bankruptcy... sparking fears of mass closures
Hooters — known for its scantily-clad waitresses — filed for bankruptcy on Monday night.
It is the latest American restaurant chain facing financial problems. But despite the filing, and $376 million of debt, the 42-year-old brand insists it's not going anywhere.
The US arm of the chain is restructuring through Chapter 11. As part of the restructuring, Hooters plans to sell more than 100 company-owned restaurants to two franchise groups that currently operate locations in Tampa, Florida, and Chicago.
Together, these groups already manage about one-third of the franchised Hooters locations in the US, the company said.
Founded in 1983, Hooters became famous for its chicken wings and its servers' uniform of orange shorts and low-cut tank tops.
The buyer group is backed by some of Hooters' original founders, and it pledged to take Hooters 'back to its roots.'
'With over 30 years of hands-on experience across the Hooters ecosystem, we have a profound understanding of our customers and what it takes to not only meet, but consistently exceed their expectations,' said Neil Kiefer, a member of the buyer group and the current CEO of the original Hooters´ location in Clearwater, Florida.
Hooters said it expects to complete the deal and emerge from bankruptcy in three to four months.
It is not clear if any other restaurants will shut. Hooters currently directly owns and operates 151 locations, with another 154 restaurants operated by franchisees, primarily in the United States.
Like other struggling chains such as Red Lobster - which filed for bankruptcy in the summer - Hooters is blaming the rising cost of rent and food and customers eating out less.
Hooters shuttered around 40 'underperforming' restaurants in June, including locations Florida, Kentucky, Rhode Island, Texas and Virginia as it bid to cut costs. A bankruptcy would likely lead to more closures of the 300 remaining locations.
The chain is known for its scantily-clad waitresses
Hooters has recently shut around 40 restaurants
Golf influencer Paige Spiranac joked on X: 'Not on my watch' - when commenting on news that Hooters was readying to file for bankruptcy
And in February, the chain shuttered one of its family-friendly Hoots Wings by Hooters spin-off restaurants, leaving just three. The concept launched in 2017 in Chicago sees diners order at a counter rather than at their tables.
But Hoot Wings' biggest difference is its staff - both male and female servers wear regular, non-revealing outfits at the counter-service restaurant.
After news of Hooters problems this morning, golf influencer Paige Spiranac joked on X: 'Not on my watch' - implying she would step in to help save the brand.
Hooters, owned by private equity since 2019, has about $300million in bonds that need to be repaid, according to data compiled by Bloomberg.
These bonds are backed - a bit like mortgages - to the assets it owns, such as its property, brand rights and fees it gets from its franchisees. That means lenders can put pressure on it to sell them if debts are not repaid.
Chapter 11 bankruptcy allows companies to restructure - by negotiating leases with landlords and loans with banks.
Red Lobster recently emerged from Chapter 11 after using it to close 100 restaurants and clear debts.
Hooters now has about 300 restaurants globally after the closures this year. That is down from 333 in 2018, according to Techonomic.
Rivals Dave & Buster's, Miller's Ale House and Twin Peaks have all slightly upped their restaurant count.
At the time of the closures in the summer, Hooters was not thought to be in as dire financial situation as Red Lobster, which has now emerged from Chapter 11 bankruptcy.
In fact, bosses said Hooters 'remains highly resilient and relevant,' and highlighted a new range of Hooters frozen food which is being sold in supermarkets across America.
The first Hooters opened in Clearwater, Florida in 1983
The sports bar-style restaurant is well known for its wings and its scantily clad waitresses, 'Hooters Girls'
Hooters,opened six new locations in 2023. Three in Las Vegas, and three in Florida, where the brand originated
Marie recommended others apply to the chain while showing off her cash
Hooters, as well as being known for scantily clad waitresses, also calls itself 'the original American wing joint', and celebrated its 40th birthday in 2023.
The first Hooters opened in Clearwater, Florida in 1983. Only last May, it was opening restaurants - three in Las Vegas and three in Florida.
Waitresses can make big bucks. Maia Marie, a 23-year-old waitress, shocked her 25,000 social media fans with the more than $450 she raked in on just one half shift at the chain.
'I ended up walking out of there with $451,' Marie said in a viral TikTok video last year that was viewed 3.8 million times. So, over a full shift it would likely be double that.
Across America, restaurants have increasingly been struggling over the past year.
Faced with higher costs, they have put up menu prices - but that has led to a fall in customers.
Big name chains like Applebee's, TGI Fridays and Boston Market have have all recently shuttered restaurants.
BurgerFi is the latest for file for bankruptcy in September - sparking sparks fears of mass closures of its 162 locations.
Chains have been worst hit in California where the minimum wage for fast food restaurants jumped to $20-an-hour from April 1.
In early June, Mexican chain Rubio's shut 48 locations in the state and also filed for bankruptcy.
Across America, mom-and-pop operations have also been shutting.
For example, Fargo's Pit BBQ in Texas closed after more than two decades of serving brisket, ribs and other barbecue classics.
