Hooters of America has filed for bankruptcy. The restaurant chain, known for its signature wings and sports bar atmosphere, revealed plans to sell its company-owned locations to two existing franchisees to restructure its business. Read on to discover the factors that led to this decision, the details of the proposed sale, and what this means for the future of the iconic brand and its loyal customers.
Hooters’ Original Creators Plan to Restore the Brand’s Legacy
In its bankruptcy filing, Hooters of America announced an agreement to sell a portion of its corporate-owned restaurants to two of its existing franchisees. These franchisees currently operate more than 30% of Hooters of America’s U.S. locations, including 14 of its 30 highest-grossing outlets.
One of the buyers, Hooters Inc., is led by the brand’s founders. CEO Neil Keifer emphasized the group’s dedication to revitalizing the brand, stating that they “are committed to restoring the Hooters brand back to its roots.” He explained that the company intends to streamline Hooters of America’s operations “by adopting a pure franchise model that will maximize the potential for sustainable, long-term growth.”
However, Hooters of America, which oversees 293 locations, is still in the process of reassessing its operational footprint as part of the restructuring process. Court documents indicate that Hooters of America plans to transition into a fully franchised model by selling or closing its remaining corporate-owned stores.
Hooters of America filed for Chapter 11 bankruptcy in a U.S. Bankruptcy Court in Texas on Monday, March 31st, and expects to complete the process within 90 to 120 days. To support its operations during bankruptcy proceedings, Hooters is seeking court approval for $40 million in new financing.
The agreement with the two Hooters franchisees is expected to keep the company operational under new ownership. Since 2019, Hooters of America has been owned by a pair of private equity firms: Nord Bay Capital and TriArtisan Capital Partners.
What Led to Hooters of America’s Bankruptcy?
In a court filing on Tuesday, Hooters of America attributed its financial struggles to “inflationary pressure and industry headwinds.” However, the company also pointed to its significant debt, much of which stems from a 2021 whole business securitization financing. For example, in 2024, the company faced $31 million in debt service payments. “The substantial size of the company’s debt-service obligations has put significant pressure on the business,” the filing stated.
According to data from Bloomberg, Hooters is under financial strain with approximately $300 million in outstanding bonds. These bonds are secured by the company’s assets—including property, brand rights, and franchise fees—meaning that lenders could push for asset sales if the debts remain unpaid.
The company has estimated both its assets and liabilities to be between $50 million and $100 million, as noted in the court filings.
Hooters operates nearly 200 company-owned units in the U.S., while franchisees ran 97 locations domestically by the end of 2023. As part of its cost-cutting efforts, Hooters has closed 48 restaurants since the start of 2024, including locations in Florida, Kentucky, Rhode Island, Texas, and Virginia.
It’s worth noting that the bankruptcy does not affect the company’s international units, which numbered 67 as of 2023, according to Technomic.
What Hooters’ Bankruptcy Means for Loyal Fans
Hooters of America’s bankruptcy raises questions about the future of the brand, but for its loyal fans, the impact may not be as immediate as it seems. While the company is undergoing a major restructuring, including selling some corporate locations and transitioning to a fully franchised model, many of its beloved restaurants will remain open under new ownership.
Franchise locations are expected to continue operating as usual, ensuring that the familiar Hooters experience is still available. Fans of the chain’s iconic wings, sports-bar atmosphere, and signature service can rest assured that the brand will likely continue to thrive in many areas, especially as the company refocuses its operations and simplifies its structure.
However, with restaurant closures and restructuring efforts underway, some fans may see fewer locations in their areas or notice changes to the brand’s offerings. Ultimately, the restructuring aims to streamline operations for long-term growth, which could result in more efficient service and a stronger brand presence down the road.