American restaurant chain Hooters – globally infamous for the revealing uniforms of its waitresses – filed for bankruptcy in a Texas court on Monday. Reuters reports that the chain is seeking to address its US$376 million debt by selling all of its company-owned restaurants to a franchise group backed by the company’s founders.
Hooters, like many other casual dining restaurants, has struggled in recent years due to rising costs and decreased demand from cash-strapped consumers, closing more than 40 locations in 2024. The company still directly owns and operates 151 locations, while franchisees operate another 154 restaurants, most located in the US.
Now, the privately owned company is looking to sell off those 151 locations to a buyer group comprising two Hooters franchisees who operate 30 high-performing locations in the US, mainly in Florida and Illinois. Hooters did not disclose the purchase price for the transaction, which must be approved by a US bankruptcy judge. The entire process is expected to take three to four months, with all locations then becoming franchises.
“As we look toward the future, we are committed to restoring the Hooters brand back to its roots”, said Neil Kiefer, a member of the buyer group and CEO of Hooters Inc. Adopting a pure franchise model “will maximize the potential for sustainable, long-term growth.”
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Hooters traces its roots back to Clearwater, Florida, where the first restaurant opened in 1983. The founders, six local businessmen with no experience in the restaurant industry, incorporated the company on April Fool’s Day, an intentional nod to how little they expected from the venture. While another man purchased the rights to Hooters from the original six in December 1984, creating Hooters of America (HOA), the Clearwater-based Hooters Inc now headed by Kiefer retained control of the original location as well as restaurants in Tampa, Chicago and Manhattan.
Hooters’ is known for its specialty chicken wings and beer – and the revealing outfits sported by the young, all-female waitstaff, a combination of orange short-shorts and low-cut tank tops emblazoned with the Hooters’ logo. Somewhat ironically for a brand built on “joking and innuendo based on female sex appeal,” Kiefer termed the recent announcement that the company is working to bring back a family-friendly atmosphere as “re-Hooterization” in a Bloomberg report. The tradition of celebrating Memorial Day and the Fourth of July with Americana-themed bikini dress-up days is out, but no word yet on the fate of those skimpy uniforms.
As for the restaurants themselves, Hooters says franchise locations won’t be affected at all, but company-owned locations will be considered during the restructuring. “Our renowned Hooters restaurants are here to stay,” Sal Melilli, CEO of HOA, said in a statement issued Monday.
Kiefer, of Hooters Inc, noted that the buyer group is well-positioned to strengthen the brand. “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.”
