Hooters of America Files for Bankruptcy to Address $376 million in Debt
Restaurant chain Hooters of America (HOA) aims to tackle $376 million in debt by filing for bankruptcy in Texas, USA, and selling all of its corporate-owned restaurants to a group of buyers.
The group consists of two existing Hooters franchisees. One of them is Hooters Inc, the founder of the brand. Together, the group owns and operates more than 30% of the country’s franchise hooters locations.
The group is committed to bringing the brand back to its roots.
Hooters’ decision to file for bankruptcy with the US Bankruptcy Court for the Northern District of Texas is in a difficult time for casual dining establishments. The sector has been hit hard by inflation, rising labor costs, food costs and lower consumer spending, as reported. Reuters.
Restaurant chain TGI FridayRed Lobster, Baccadi Beppo and Rubio’s coastal grills all filed for bankruptcy in 2024.
Hooters currently owns and operates 151 locations directly, with 154 additional restaurants run primarily by franchisees in the US.
The purchase price remains undisclosed, but the transaction is pending approval from a US bankruptcy judge.
Hooters CEO Neil Kiefer said:
“Looking at the future, we are committed to simplifying the operation of our HOA by restoring the Hooters brand to its roots and adopting a pure franchise model that maximizes sustainable, long-term growth potential.
“The foundation we laid will ensure the continued success of our brand. This is based on our relentless focus on providing an exceptional experience on every visit we have.”
Hooters expects the sales and bankruptcy process to be completed by June/July 2025.
The company is seeking permission to raise $40 million Debtor (DIP) from some of its current lenders, including $35 million in fresh capital. Following court approval, Hooters hopes that DIP Finance will provide sufficient liquidity to support operations during the Chapter 11 process.
Once this is complete, all Hooters locations will become franchisee-owned.
“Hooters of America Files for Bankruptcy to Address $376 Million Debt” was originally created and published Verdict Food Servicea brand owned by GlobalData.
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