- Hooters of America has filed for Chapter 11 bankruptcy but will remain operational as it transitions to a fully franchised model.
- A buyer group, including the brand’s founders, will acquire the 151 company-owned restaurants in the U.S.
- The rebrand, called “re-Hooterization,” aims to modernize the brand by phasing out “bikini nights” and focusing on a more family-friendly image.
- The chain joins a growing list of sit-down dining brands facing financial pressure from rising costs and shifting consumer habits.
Back to the Drawing Board
Hooters of America filed for bankruptcy in a Texas court this week, launching a plan to shift to a 100% franchise model to keep its restaurants open and streamline operations. According to Bisnow, the restructuring comes amid declining consumer traffic and increased competition from fast-casual concepts.
A Strategic Buyout
A buyer group, featuring some of the chain’s original founders, will acquire the 151 company-operated Hooters locations across the U.S. The group already controls roughly a third of existing franchise units and plans to accelerate the brand’s turnaround strategy.
What’s Changing
The new ownership is leaning into a rebrand dubbed “re-Hooterization,” which will retire the brand’s more controversial features like “bikini nights” and reframe the concept around a broader, more “wholesome” customer base.
Neil Kiefer, CEO of Hooters Inc., emphasized the group’s intent to return to brand fundamentals while making operations more scalable through franchising. “We are committed to restoring the Hooters brand back to its roots and simplifying operations,” Kiefer said.
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A Quick Turnaround
According to company officials, Hooters expects to exit bankruptcy in as little as 90 to 120 days. The company, which started in Clearwater, FL, in 1983, currently operates more than 400 locations in 29 countries.
Industry-Wide Headwinds
Hooters joins a growing list of legacy casual dining chains that have recently filed for bankruptcy. TGI Fridays filed last year amid $37M in debt, and Red Lobster emerged from bankruptcy in September after closing nearly 100 stores.
Many of these brands face the same challenges: post-pandemic shifts in dining habits, inflationary pressures, and fierce competition from more agile fast-casual competitors.
What’s Next
If successful, Hooters’ franchise-only strategy could serve as a model for other legacy dining brands looking to stabilize amid changing market dynamics. For now, all eyes are on the brand’s next chapter—and whether a new look and model can bring Hooters back to profitability.
