After 42 successful years, Hooters may be on the brink of bankruptcy. This comes after a period of financial difficulty in which Hooters of America was in talks with advisors and money-lenders to address loss in revenue and foot traffic.
Since the chain was bought by Nord Bay Capital and TriArtisan Capital Advisors in 2019, it has faced a number of issues. In 2024 the company shuttered around 40 brick-and-mortar locations, citing “current market conditions,” per Nation’s Restaurant News. However, the wing giant presented an optimistic front, saying in the same release, “With new Hooters restaurants opening domestically and internationally, new Hooters frozen products launching at grocery stores, and the Hooters footprint expanding into new markets with both company and franchise locations, this brand of 41 years remains highly resilient and relevant.” At the same time, the chain also had to pay out $250,000 in a Race and Color lawsuit based on the re-hiring practices of employees following the COVID furloughs.
According to Bloomberg, the chain sold around $300 million in asset-backed bonds in 2021, freeing up capital by selling debts to an issuer. This move is popular with restaurants and other franchises.
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What Lies Ahead For Hooters
A Hooters burger and curly fries – DarioSavastano/Shutterstock
The financial hardship the company is experiencing is by no means limited to Hooters as an institution. The last decade has been incredibly difficult for the restaurant industry as COVID and other global events have disrupted supply lines, raised ingredient costs, and impacted consumer finances. Restaurant prices increased 44% from 2015 to 2024 and the global pandemic wreaked havoc on any institution that operates primarily as a dine-in establishment.
In 2024, six different pizza chains filed for bankruptcy, including MOD Pizza, which had extended to over 500 locations nationwide, and Mary’s Pizza, a Northern California staple that had been operating for 65 years. The rise of food delivery services, the demands of venture capitalist investors, and the changing palates of American consumers have claimed many chains — just ask Ponderosa Steakhouse, which has seen almost all of its once mighty number of restaurants shut down.
However, just because Hooters will likely soon be declaring bankruptcy, that doesn’t mean you’ve had your last chance at getting wings, beers, and novelty merch. There will undoubtedly be hardship ahead for the franchise’s locations, but it’s unlikely that the chain is going to disappear overnight. Similar to how TGI Fridays locations have stayed open despite the company declaring bankruptcy in November, 2024, some Hooters locations are going to survive this. This is especially true because of the division of Hooters and Hooters of America. While the latter is the company declaring bankruptcy, the former, now known as “Original Hooters” operates separately and owns locations throughout Florida and Chicago.
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Read the original article on Food Republic.
