Franchise Deep Dive: Hooters Franchise Costs, Fees, Profit and Data

With changing consumer preferences and a challenging past few years, does the Hooters franchise's success still rest on its 'buxom' business model, or are there more solid assets at play beneath the surface?

By Luca Piacentini1851 Franchise Managing Editor

10:10AM • 06/02/23

LAST UPDATED: May 10, 2023

FRANCHISE WEBSITE: https://www.hooters.com/franchising/

NUMBER OF LOCATIONS: 370

REPORTED COST TO GET IN: $2,256,500 - $4,275,000

REPORTED ROI (Item 19): $3,024,524 (average gross annual sales)

Hooters is an internationally-recognized brand, known for its lively atmosphere, sports viewing and the iconic Hooters Girls. With a menu focusing on wings, burgers, seafood and more, Hooters has attracted a substantial, global customer base. Today, as a franchise opportunity, the brand competes in the highly saturated casual dining sector against other sports bars and casual dining chains.

How Many Hooters Locations Are There?

In 1983, six businessmen in Clearwater, Florida opened the first Hooters location, aiming to create a casual beach-themed restaurant. The chain’s original menu consisted mostly of sandwiches and fried seafood items, with a focus on the Hooters “Original” buffalo-style chicken wings. Since starting to franchise a few years later, Hooters has grown from a small restaurant venture in Florida to a truly globally recognized brand.

In recent years, Hooters was hit hard by the impact of the COVID-19 pandemic, although the brand’s niche market was on the decline even prior to that. According to BusinessInsider, Millennials are less apt to frequent their local Hooters than the people that made it popular throughout the 1980s. The Hooters of America corporation was officially sold to Nord Bay Capital and TriArtisan Capital Advisors in 2019. That same year, the company also launched a fast-casual offshoot named Hoots Wings, which offers plenty of the standard Hooters menu items, but under a fast food model that bears little resemblance to the “experience” of a traditional Hooters.

Despite all those challenges, Hooters has maintained its reputation as an undeniable staple in the casual dining sector. According to its website, Hooters currently operates around 370 locations in 35 states and 18 countries worldwide.

What Is the Hooters Business Model?

Hooters locations are typically freestanding buildings, though they can also be found in high-traffic mall and airport locations. Franchise owners are expected to manage a full-service, casual dining establishment with a sports bar atmosphere. The menu features a variety of wings, burgers, seafood, salads and sandwiches, with a full bar available.

The free-standing prototype Hooters is a building of a minimum of 3,000 square feet and requires a lot size of at least 5,000 square feet. For other venues or conversions, locations with at least 3,000 square feet of space may be adaptable for a Hooters restaurant.

Site requirements include:

Lot size of 1.5 acres or larger unless parking can be shared with adjoining lots
Minimum building size of 5,000 square feet
Minimum of 80 parking stalls
Superior visibility of the building and signage elements
Easy accessibility into location, with a preference for two curb cuts at a signalized corner
Traffic count of at least 30,000 VPD
Superior strategic positioning of the site for the trade area
Strong retail synergy within ½ mile of the location
Late-night activity drivers within one mile of the site
Ability to achieve Hooters brand signage and exterior elements

How Much Can Hooters Franchise Owners Make?

According to the brand’s 2019 FDD, franchised Hooters locations saw average gross annual sales of $3,024,524.

How Much Does It Cost to Open a Hooters?

The estimated total investment necessary to begin the operation of a Hooters franchise ranges from $2,256,500 - $4,275,000. The following costs are part of the upfront costs included in the initial investment for Hooters. Many of these are one-time fees that are needed to launch the franchise.

Initial Franchise Fee: $75,000
Real Estate Lease Payments: $7,000 - $50,000
Liquor License : $5,000 - $225,000
Improvements/Signage: $1,400,000 - $2,500,000
Equipment, Furniture, Supplies and Smallwares: $550,000 - $750,000
Initial Inventory: $25,000 - $100,000
Labor and Training: $65,000 - $140,000
Initial advertising: $10,000 - $50,000
Insurance: $45,000 - $100,000
Professional Fees: $20,000 - $100,000
Deposits, Licenses and Other Prepaid Expenses: $4,500 - $35,000
Additional Funds – 3 Months: $50,000 - $150,000
Estimated Total: $2,256,500 - $4,275,000

What Is the Franchise Fee for Hooters?

The initial franchise fee is $75,000 and is paid upon execution of the Franchise Agreement.

You need a minimum net worth of $2.5 million and liquidity of $1.5 million. These requirements are minimums and may be higher in certain markets.

Who Is the Leadership of Hooters?

What Helpful Articles Can I Read to Learn More About Hooters?

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