Hooters has announced that it has filed for bankruptcy but assures customers it will continue operating.
The company plans to sell all of its 100 company-owned restaurants as part of the bankruptcy process. The buyers will be two franchisee groups that already operate Hooters locations in the Tampa, Florida, and Chicago areas.
Together, these groups operate about a third of the US franchised-owned Hooters locations.
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Hooters’ bankruptcy filing comes as other fast-casual dining establishments, such as TGIF and Red Lobster, have also faced financial difficulties and filed for bankruptcy.
Hooters has also faced scrutiny regarding its workforce, with lawsuits alleging racial and gender discrimination. The company closed dozens of restaurants last year, citing rising food and labor costs.
Hooters intends 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 a press release.
Hooters filed for Chapter 11 bankruptcy protection in Texas court. The company will continue to operate its business, but it is “evaluating the Company’s operational footprint” for its company-owned locations, suggesting that some closures may occur during the bankruptcy proceedings. Private equity firms Nord Bay Capital and TriArtisan Capital Advisors acquired Hooters in 2019.
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The buyer group includes original Hooters founders, one of whom is Neil Kiefer, CEO of the franchisee group Hooters Inc. headquartered in Clearwater, Florida.
“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 recent interview, he indicated that the turnaround plan involves making the chain more family-friendly.
Kiefer stated that the founder-led buyout will allow the brand to “go back to its roots,” and the company emphasized that “Our renowned Hooters restaurants are here to stay.”
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