Hooters, the restaurant chain known first for its orange-clad, all-female wait staff in revealing outfits—and for its chicken wings—has filed for Chapter 11 bankruptcy, the company announced Monday. However, customers needn’t despair.
“Today we announced that we have entered into an agreement to position Hooters for stability and growth—all while continuing to deliver the guest-obsessed hospitality and delicious food you know and love.”
As part of the bankruptcy process, Hooters plans to sell all 100 of its company-owned restaurants to two franchisee groups that are currently operating locations in the Tampa, Florida, and Chicago, Illinois, areas.
Together, the buying groups already oversee about a third of the franchise-owned Hooters restaurants in the United States, including 14 of the 30 highest-grossing restaurants.
Hooters joins a growing list of fast-casual chains, including BurgerFi and Red Lobster, that have declared bankruptcy amid challenging business conditions.
The company has also faced legal challenges, with lawsuits alleging racial and gender discrimination.
Hooters said its restaurants will remain open to serve customers as usual during the restructuring, which it expects to conclude within 90 to 120 days.
“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,” said Sal Melilli, chief executive officer of Hooters of America, in the release.
The company said it is currently awaiting court approval for $40 million in debtor-in-possession financing from certain existing lenders, including $35 million in new capital to secure normal operations during the restructuring process.
Hooters emphasized that franchise-owned locations—domestic and abroad—are not impacted by the Chapter 11 process. Company-owned locations, however, will be evaluated individually, which could lead to further closures.
The Hooters brand was acquired by private equity firms Nord Bay Capital and TriArtisan Capital Advisors in 2019. The buyer group, made up of existing franchisees, now includes its original founders along with Neil Kiefer, CEO of franchise group Hooters Inc.
“As a result of these transactions, the Hooters brand will once again be in the hands of highly experienced Hooters franchisees and we will be well-positioned to return this iconic brand to its historic success.”
Kiefer said that the founder-led buyout will allow the brand to go “back to its roots,” and the restaurant emphasized that, “Our renowned Hooters restaurants are here to stay.”