Ramishah Maruf
Hooters — the restaurant chain first known for its orange-clad, all-female
wait staff and then its chicken wings — filed for bankruptcy, the company
announced Monday. But the decades-old brand said it isn’t going anywhere.
In the bankruptcy process, the company plans to sell all of its 100
company-owned restaurants to two franchisee groups that operate Hooters
locations in the Tampa, Florida, and Chicago areas. The combined group
collectively operates a third of the US franchised-owned locations,
according to the press release.
Hooters joins other fast-casual restaurants, such as BurgerFi (BFICQ) and
Red Lobster, which filed for bankruptcy amid rough business conditions.
The company’s workforce has also come under fire, with lawsuits ranging
from racial discrimination to gender discrimination. Hooters closed dozens
of restaurants last year, blaming rising food and labor costs.
The company said it plans to exit Chapter 11 bankruptcy in “approximately
90-120 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.
Hooters filed for Chapter 11 bankruptcy protection in Texas court, a
common route for struggling companies hoping to solve their financial
problems through reorganization.
Hooters said it will continue to operate its business as usual, although
it said it is “evaluating the Company’s operational footprint” for its
company-owned locations. That means it may end up closing some locations
during its bankruptcy process. Private equity firms Nord Bay Capital and
TriArtisan Capital Advisors bought Hooters in 2019.
The buyer group includes the original Hooters founders, including Neil
Kiefer, CEO of franchisee group Hooters Inc.
“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,” Kiefer said in a press release Monday. In an interview with
Bloomberg News last week, he said that the turnaround plan includes making
the chain more family friendly.
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.”
CNN’s Jordan Valinsky contributed to reporting.
