Hooters of America, a popular restaurant chain known for its chicken wings and servers in orange shorts and tank tops, has filed for bankruptcy in Texas. The company is seeking to address its $376 million debt by selling all of its company-owned restaurants to a franchise group backed by the company’s founders. Hooters, like many other casual dining restaurants, has faced challenges in recent years due to inflation, high costs of labor and food, and declining spending by American consumers.
The purchase price of the transaction has not been disclosed, and it must be approved by a U.S. bankruptcy judge before finalization. The buyer group plans to take Hooters “back to its roots” with the help of the company’s original founders. Hooters expects to emerge from bankruptcy in three to four months with the help of $35 million in financing from its existing lender group.
Casual dining restaurants, including well-known chains like TGI Fridays, Red Lobster, Bucca di Beppo, and Rubio’s Coastal Grill, have all struggled with rising costs in recent years. Restaurant prices have risen about 30% in the last five years, outpacing consumer prices overall. Hooters hopes that by selling its corporate-owned locations and returning to its original vision, it can successfully navigate the challenging landscape of the restaurant industry and continue to serve its loyal customers.
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