Hooters Declares Bankruptcy but Says It's Not Going Anywhere
The terms "bankruptcy" and "Chapter 11" often conjure worst-case scenarios, going out of business, and total-and-utter-failure visions. However, many companies use the filing as a way of restructuring a business model. Hooters, made famous in the 1980s with skimpy uniforms and chicken wings, has been dwindling in popularity over the past decade, closing many restaurants. This week, the company filed for Chapter 11 but wants to clarify one thing: Hooters Girls and wings are here to stay – with a little restructuring.;
Hooters Has Entered Intro a Restructuring Agreement
Hooters of America, "the original wing joint," announced a Restructuring Support Agreement (RSA). Translation? Two existing Hooters franchisees (including Hooters Inc., the original Hooters founders), who currently own and operate over 30% of the domestic franchised Hooters locations, including 14 of the 30 highest-volume restaurants, are taking ownership and will "acquire and operate certain Company-owned Hooters locations."
It Filed for Chapter 11
Hooter filed voluntary chapter 11 in the United States Bankruptcy Court for the Northern District of Texas (the "Court"), expecting to move through the process "swiftly" with a goal of up to 120 days. During this period of time, business will be conducted as usual.
But Hooter Is "Here to Stay"
"Our renowned Hooters restaurants are here to stay. Today's announcement marks an important milestone in our efforts to reinforce Hooters' financial foundation and continue delivering the guest-obsessed hospitality experience and delicious food our customers and communities have come to expect," said Sal Melilli, Chief Executive Officer of Hooters of America.
The Brand Hopes to Build "Momentum" Into the Future
"I've seen firsthand the incredible value and opportunities our brand brings to life, and I look forward to continuing that momentum well into the future. I'm incredibly grateful to our valued customers, partners, and employees for their continued support," he continued.
Management Is Confident in the Decision
"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," added Neil Kiefer, CEO of Hooters Inc., on behalf of the Buyer Group.
They Hope to Bring the Brand "Back to Its Roots"
"As we look toward the future, we are committed to restoring the Hooters brand back to its roots and simplifying HOA's operations by adopting a pure franchise model that will maximize the potential for sustainable, long-term growth. The foundation we've laid ensures the continued success of our brand – one that is driven by a relentless focus on delivering an exceptional experience each and every visit for our customers."
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