
Hooters, the iconic American restaurant chain known for its chicken wings and distinctive waitstaff, has filed for Chapter 11 bankruptcy while assuring customers that its restaurants will remain open during the financial restructuring process.
Key Takeaways
- Hooters will continue operating normally during the bankruptcy proceedings with no planned changes to menu or rewards program.
- The company is shifting from a hybrid model to an all-franchise approach, selling restaurants to current successful franchisees including the chain’s cofounders.
- Global franchise operations outside the United States will not be affected by the restructuring process.
- Hooters is seeking $40 million in financing to fund operations during the reorganization.
- The company aims to emerge from bankruptcy within months with a stronger financial foundation.
Business As Usual During Restructuring
Hooters of America has entered into a Restructuring Support Agreement that will allow the company to reorganize its debt while maintaining regular operations. The Chapter 11 filing comes after reports of mounting debt, liquidity challenges, and declining customer numbers. Despite these financial hurdles, Hooters CEO Sal Melilli has emphasized that the restructuring is designed to strengthen the company’s position in the market without disrupting the customer experience.
The chain is seeking $40 million in debtor-in-possession financing, including $35 million in new capital, to ensure smooth operations throughout the bankruptcy process. Customers will notice no immediate changes to Hooters’ menu offerings, rewards program, or other services, as the company works behind the scenes to address its financial structure.
5. Hooters files for bankruptcy as brand eyes turnaround plan #hooterscto
Hooters has filed bankruptcy as the casual-dining brand known for its chicken wings and skimpy server uniforms struggles to lure customers. pic.twitter.com/7epX3AV3cw
— Stock Jabber (@Stock_Jabber) April 1, 2025
New Ownership Structure
A key component of Hooters’ restructuring plan involves selling company-owned restaurants to a group of current franchisees, including the chain’s cofounders. This “Buyer Group” already owns nearly one-third of all domestic franchised Hooters locations, including 14 of the top 30 highest-volume restaurants in the system. The move signals confidence in the brand from those most familiar with its operations.
The reorganization will transition Hooters from a hybrid franchise and company-owned model to a solely franchising model. Company leadership believes this change will enhance growth opportunities, simplify operations, and provide a more sustainable business structure going forward. This strategic pivot comes after the closure of several underperforming restaurants and a recent $900,000 settlement with Hendrick Motorsports over unpaid sponsorship obligations.
Looking Toward The Future
Hooters aims to complete the reorganization process quickly and emerge from bankruptcy in the coming months with improved financial stability. The company is currently evaluating its operational footprint to focus resources on its strongest performing locations. Importantly for the brand’s global presence, Hooters’ international franchise operations will continue unaffected by
Hooters has been a fixture in American dining culture since its founding in 1983 in Clearwater, Florida. The chain grew to prominence for its casual sports bar atmosphere, chicken wings, and waitresses in distinctive uniforms. With this bankruptcy filing, the company hopes to address financial challenges while preserving the brand identity that has sustained it for four decades in an increasingly competitive casual dining landscape.
Sources:
Hooters files for Chapter 11 as franchisees step in to buy locations
Hooters files for Chapter 11 bankruptcy
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