Is Hooters Filing For Bankruptcy And Will Stores Stay Open? Here’s What To Know Buyout Plan

The company filed voluntary petitions for Chapter 11 in the United States Bankruptcy Court for the Northern District of Texas according to a news release.

A buyer group will take over all corporate-owned assets

The move allowed Hooters to secure a restructuring agreement to sell 100 corporate-owned locations to two Hooter franchisee groups to acquire and operate certain locations. This group, including the founders, currently operates 30 high-performing restaurant locations in the U.S., particularly in Chicago and Tampa, Florida.

Hooters is among several popular restaurant chains that have struggled in recent years, turning to bankruptcy to restructure or close permanently. Rising inflation, higher food and labor costs and decreased consumer spending have all contributed to this trend, CNBC reported.

Hooters CEOs share their plans for the brand

The company aims for a swift bankruptcy process and strong comeback in 90 to 120 days, per the news release. All Hooters locations will remain open and will operate under a “business-as-casual manner,” during Chapter 11 procedures. Additionally, the company will address financial challenges by investing its resources in the high-performing restaurant locations.

“Our renowned Hooters restaurants are here to stay. Today’s announcement marks an important milestone in our efforts to reinforce Hooters’ financial foundation and continue delivering the guest-obsessed hospitality experience and delicious food our customers and communities have come to expect,” Sal Melilli, chief executive officer of Hooters of America, stared in the news release.

Neil Kiefer, CEO of Hooters Inc., speaking on behalf of the Buyer Group, echoed similar sentiments and pledged to prioritize the brand and its customers.

“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,” he stated in the news release. “As we look toward the future, we are committed to restoring the Hooters brand back to its roots and simplifying HOA’s operations by adopting a pure franchise model that will maximize the potential for sustainable, long-term growth.”

Hooters has been a well-known brand for decades

Hooters was founded in 1983 by six businessmen in Clearwater, Florida. The idea was to have a space where they can hang out and be themselves, which later turned into an international sensation, with more than 420 locations in 29 countries, according to the website.

There are over 250 Hooters restaurants in the United States, per ScrapeHero.