Hooters Files For Bankruptcy, Plans Transition To Franchise Model

A planned “re-Hooterization” is on the menu to save restaurant chain Hooters after the company filed for bankruptcy in a Texas court Monday. 

A group that includes the chain’s founders will buy the 151 Hooters of America-owned restaurants in the U.S. as the brand moves to a pure franchise model that will allow the restaurants to remain open during the bankruptcy process, The New York Times reported.

The uniquely named rebranding will end the chain’s “bikini nights” for its all-female waitstaff and give the restaurants a more wholesome vibe, an executive with the buyer group told Bloomberg. 

That group already oversees about a third of the chain’s existing franchises in the U.S. The chain, known for its wings and scantily clad servers, has more than 400 locations in 29 countries. 

“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,” Hooters Inc. CEO Neil Kiefer said in a statement on behalf of the buyer group.

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

Hooters officials said they plan to move through the process quickly, as the chain aims to exit bankruptcy in 90 to 120 days.

The first Hooters opened in Clearwater, Florida, in October 1983 after “six businessmen with absolutely no previous restaurant experience got together and decided to open a place they couldn’t get kicked out of,” according to the chain’s website.

Hooters joins a growing list of budget sit-down restaurants that have cut locations or filed for bankruptcy in recent years due to competition from fast-casual restaurants, rising expenses and consumers eating out less since the pandemic.

Dallas-based restaurant chain TGI Fridays filed for bankruptcy with $37M in debt last year, though a nine-store sale earlier this year was expected to help lead the company out of bankruptcy. 

Red Lobster exited bankruptcy in September, approximately four months after the company filed and closed 99 locations. The chain was acquired by a Fortress Investment Group-backed investor that committed to more than $60M in new funding for the brand.