Hooters Files for Chapter 11 Bankruptcy
Hooters of America, the iconic restaurant chain known for its wings and distinctive uniforms, has filed for Chapter 11 bankruptcy in Texas in a move to address its mounting $376 million debt. But the company isn't closing up shop—instead, it’s restructuring and selling all 151 of its company-owned restaurants to a franchise group backed by Hooters’ original founders.
A Franchise-Fueled Future
Under the proposed deal, the privately held company will transfer ownership of its corporate-run locations to a buyer group consisting of two existing Hooters franchisees. These operators currently manage 30 successful Hooters restaurants, mainly in Florida and Illinois. The transaction—whose financial terms have not been disclosed—requires approval from a U.S. bankruptcy judge before it becomes final.
This pivot aligns with a broader strategy to return Hooters to its roots. The buyer group, which includes founding members of the original Hooters location in Clearwater, Florida, believes the franchise model offers a more sustainable and locally focused path forward.
“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,” said Neil Kiefer, CEO of the original Hooters location and part of the new buyer group.
Why Hooters Is Restructuring Now
Like many in the casual dining space, Hooters has been hit hard by a perfect storm of economic pressures. Inflation, surging labor and food costs, and a pullback in consumer discretionary spending have squeezed profit margins across the industry.
The current ownership, which shares private equity ties with fellow bankrupt brand TGI Fridays, has struggled to weather the financial headwinds. Hooters' decision to exit the corporate ownership model reflects a growing industry trend toward leaner, franchise-driven operations.
The Road Ahead
Hooters expects to emerge from bankruptcy within three to four months. The company has secured approximately $35 million in financing from its existing lenders to help fund the restructuring and sale process.
While the brand's 154 franchise-operated locations will remain unaffected, the upcoming transition could bring changes in how company-owned restaurants are run—likely with more local autonomy, operational efficiency, and a renewed focus on what originally made Hooters stand out.
Founded in 1983, Hooters became a pop culture phenomenon thanks to its wings, beer, and branded atmosphere. Now, with a new ownership structure and a return to its franchised foundation, the company hopes to write its next chapter—leaner, stronger, and more in tune with today’s economic realities.
