Hooters of America has filed for bankruptcy protection in Texas as part of a plan to address its $376 million debt. The restaurant chain is aiming to sell its 151 company-owned locations to a franchise group supported by the company’s founders.
Facing financial challenges due to inflation, rising labour and food costs, and a dip in consumer spending, Hooters intends to transfer ownership to two franchisees operating 30 successful locations, mainly in Florida and Illinois. The deal is still subject to approval by a U.S. bankruptcy judge.
Founded in 1983, Hooters plans to revive its brand with a focus on customer satisfaction. The buyer group, including Neil Kiefer, CEO of the original Hooters location in Clearwater, Florida, is committed to returning the company to its roots.
Hooters has secured around $35 million in financing from its current lender group to support the transaction, which is expected to conclude in 3 to 4 months. This bankruptcy filing follows a trend in the casual dining sector, where chains like TGI Fridays and Red Lobster have also faced financial struggles due to escalating operating costs.