Restaurant chain Hooters files for bankruptcy protection to enable founder-led buyout
Restaurant chain Hooters of America filed for bankruptcy protection in Texas on Monday, seeking to address its $376 million debt by selling all of its company-owned restaurants to a franchise group backed by the company’s founders.
Restaurant chain Hooters of America filed for bankruptcy protection in Texas on Monday, seeking to address its $376 million debt by selling all of its company-owned restaurants to a franchise group backed by the company’s founders.
Hooters, like other casual dining restaurants, has struggled in recent years due to inflation, the high costs of labor and food and declining spending by cash-strapped American consumers. The company currently directly owns and operates 151 locations, with another 154 restaurants operated by franchisees, primarily in the United States.
The privately-owned company, which shares a private equity owner with recently-bankrupt TGI Fridays, intends to sell all corporate-owned locations to a buyer group comprised of two existing Hooters franchisees, who operate 30 high-performing Hooters locations in the U.S., mainly in Florida and Illinois.
Hooters did not disclose the purchase price of the transaction, which must be approved by a U.S. bankruptcy judge before it becomes final.
Founded in 1983, Hooters became famous for its chicken wings and its servers’ uniform of orange shorts and low-cut tank tops.
Rating: 5