Hooters of America, a popular restaurant chain known for its chicken wings and unique uniforms, has filed for bankruptcy in Texas to address its $376 million debt. The company plans to sell all of its company-owned locations to a franchise group backed by the original founders, in an effort to revitalize the brand and return to its roots. The transaction, which does not disclose the purchase price, must be approved by a bankruptcy judge.
Hooters, like other casual dining restaurants, has struggled in recent years due to inflation, high labor and food costs, and declining consumer spending. The company currently operates 151 locations directly, with another 154 restaurants operated by franchisees, primarily in the United States. The bankruptcy filing is part of a trend in the casual dining industry, with well-known chains like TGI Fridays, Red Lobster, Bucca di Beppo, and Rubio’s Coastal Grill also filing for bankruptcy in recent years.
The buyer group, consisting of existing Hooters franchisees, plans to use their experience and understanding of customers to enhance the brand and drive success. The company expects to complete the deal and emerge from bankruptcy in three to four months, with $35 million in financing lined up from existing lenders. With rising costs affecting the restaurant industry, Hooters’ bankruptcy filing represents an effort to adapt to changing market conditions and secure a profitable future.
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