Hooters Files for Bankruptcy, Sells Restaurants to Franchisee Group

Hooters, the restaurant chain known for its casual dining experience and iconic waitstaff, has filed for Chapter 11 bankruptcy protection, marking a major restructuring for the iconic restaurant brand, according to a report by the Associated Press. This update follows earlier reporting by 1851 Franchise on the company's financial struggles and potential bankruptcy.

“For many years now, the Hooters brand has been owned by private equity firms and other groups with no history or experience with the Hooters brand,” said Neil Kiefer, CEO of Hooters Management Corporation, a separate company that operates as a franchisee. “As a result of these groups’ inexperience with the brand, and a series of other external factors, the brand has become a shadow of what it once was.”

The company has proposed to sell 100 company-owned restaurants to a group of Hooters franchisees, including Kiefer and the original founders. The plan, filed in U.S. Bankruptcy Court in Dallas, aims to preserve the brand while restoring it to what the buyers describe as “its former glory.”

“Our franchise group is very familiar with the brand, and we believe in its potential,” Kiefer said. “We are confident that we can stabilize the business and begin the process of rebuilding and improving the brand.”

Hooters, founded in 1983 in Clearwater, Florida, currently operates more than 400 locations in 29 countries. In recent years, however, the brand has struggled with shifting consumer preferences, increased competition and the lingering effects of the COVID-19 pandemic. The bankruptcy filing lists assets and liabilities each in the range of $10 million to $50 million.

The company emphasized that franchised locations are not part of the bankruptcy proceedings and will remain open.

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