Hooters, the casual dining chain known for its iconic waitstaff uniforms and chicken wings, has filed for bankruptcy, according to a company announcement on Monday.
The chain filed for Chapter 11 bankruptcy in a Texas court, citing $376 million in debt. In an effort to recover financially, Hooters plans to sell all its company-owned locations to a franchise group that includes the company’s original founders and current franchisees. This group operates more than 30% of the brand’s domestic locations, including 14 of its top 30 most visited restaurants.
Like other casual dining chains such as Red Lobster and TGI Fridays, Hooters has struggled with rising inflation, increasing food and labor costs, and a shift in consumer spending as more Americans become budget-conscious. The company has also faced costly legal battles related to allegations of gender and racial discrimination, according to CNN.
Earlier in 2024, Hooters announced the closure of numerous underperforming locations, signaling the possibility of bankruptcy. This move came as part of the company’s strategy to streamline operations and address financial challenges.
Despite the bankruptcy filing, Hooters has assured customers that the brand will continue. “Our renowned Hooters restaurants are here to stay,” said Sal Melilli, CEO of Hooters of America. “This filing is a step towards solidifying our financial foundation, and we are committed to delivering the exceptional service and food our guests expect.”
The company has secured $35 million in financing from its current lenders to assist with the bankruptcy process, which is expected to be completed within the next 90 to 120 days.
Founded in 1983, Hooters operates 154 locations owned by the company, with an additional 151 locations run by franchisees. In California, the chain operates seven locations .
