Restaurant chain Hooters of America filed for chapter in Texas on Monday, searching for to handle its $376 million debt by promoting all of its company-owned eating places to a franchise group backed by the corporate’s founders.
Hooters, like different informal eating eating places, has struggled in recent times as a result of inflation, the excessive prices of labor and meals, and declining spending by cash-strapped American customers.
The restaurant chain just lately introduced a “re-Hooterization” effort round crafting a extra family-friendly picture, enhancing service occasions and utilizing more energizing elements.
The corporate presently straight owns and operates 151 areas, with one other 154 eating places operated by franchisees, primarily in the US.
The privately-owned firm, which shares a personal fairness proprietor with recently-bankrupt TGI Fridays, intends to promote all corporate-owned areas to a purchaser group comprised of two present Hooters franchisees, who function 30 high-performing Hooters areas within the US, primarily in Florida and Illinois.
Hooters didn’t disclose the acquisition worth of the transaction, which have to be permitted by a U.S. chapter decide earlier than it turns into closing.
Based in 1983, Hooters grew to become well-known for its rooster wings and its servers’ uniform of orange shorts and low-cut tank tops.
The customer group is backed by a few of Hooters’ unique founders, and it pledged to take Hooters “back to its roots.”
“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,” mentioned Neil Kiefer, a member of the customer group and the present CEO of the unique Hooters’ location in Clearwater, Florida.
Hooters mentioned it expects to finish the deal and emerge from chapter in three to 4 months.
The corporate has lined up about $35 million in financing from its present lender group to finish the chapter transaction.
Informal eating eating places have been hammered by rising prices in 2024, with well-known chains like TGI Fridays, Purple Lobster, Bucca di Beppo, and Rubio’s Coastal Grill all submitting for chapter final yr.
Restaurant costs have risen about 30% within the final 5 years, outpacing shopper costs general, in line with the Federal Reserve Financial institution of St. Louis.
