Hooters Files for Bankruptcy Protection
Hooters, the Atlanta-based breastaurant chain well-known for its chicken wings and women servers outfitted in revealing uniforms, filed for chapter 11 bankruptcy protection on Monday, March 31, in the North Texas Bankruptcy Court in Dallas, per legal filings obtained by Eater Dallas. The founders of the chain, known collectively as HMC Hospitality Group, have teamed up with a group of investors to buy back most of the restaurants from a private equity firm, according to the filing. The founders’ group owns roughly one-third of Hooters locations, which includes half of its largest-volume restaurants, the AP reports.
What’s Next for Hooters?
The chain released a customer-facing FAQ about its future to address common questions, like “Is Hooters going out of business?” (answer: no) and “Will there be any changes to Hooters’ product offerings?” (also no). This move is aimed at reassuring customers and stakeholders that the brand is committed to its core values and offerings.
Reasons Behind the Bankruptcy Filing
The filing is an attempt to resolve mounting debts to the tune of $376 million and follows the closing of 44 restaurants in summer 2024 in a count tallied by USA Today. When the bankruptcy protection process is finished, the remaining Hooters locations will be franchised, the New York Times reports. The chain also plans to return to a “family-friendly” atmosphere, chief executive officer of HMC, Nick Kiefer, told Bloomberg. The outlet reported in February that this plan to restructure Hooters’ debts has been in the works for months.
Challenges Facing the Restaurant Industry
Bloomberg suggests that the reason Hooters experienced a dip in its income is similar to the challenges many fast-casual restaurants are facing — rising menu costs due to supply chain issues and inflation tightening consumer budgets. Lower-cost chains like Chili’s have seen a bump in traffic and sales by lowering prices to be competitive with fast food. This shift in consumer behavior has forced many restaurants to rethink their pricing strategies and menu offerings.
Competitor Analysis: Twin Peaks
Meanwhile, Hooters breastaurant competitor, the Dallas-based Twin Peaks, sent out a press release in January 2025 lauding its successful year in 2024 and projecting more growth, including signing franchise agreements to open 24 restaurants in locations including Charleston, outside Philadelphia, and both North and South Dakota. Ten of those will open in 2025. Twin Peaks made its IPO debut on the stock market in January 2025, and two of its top leaders, including CEO Joe Hummel will leave in April, the Dallas Morning News reports. Chief financial officer Ken Kuick will step in as interim CEO. The chain still expects to exceed $1 billion in sales over the next five years.
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Conclusion
In conclusion, Hooters’ bankruptcy filing is a significant development in the restaurant industry, highlighting the challenges faced by many fast-casual chains. The brand’s plans to restructure its debts and return to a “family-friendly” atmosphere are aimed at revitalizing the business and attracting a broader customer base. As the restaurant industry continues to evolve, it will be interesting to see how Hooters and its competitors adapt to changing consumer preferences and market trends.
Frequently Asked Questions
Q: Is Hooters going out of business? A: No, Hooters is not going out of business. The chain has filed for chapter 11 bankruptcy protection to restructure its debts and plans to continue operating its locations.
Q: Will there be any changes to Hooters’ product offerings? A: No, Hooters has stated that there will be no changes to its product offerings.
Q: What is the current debt of Hooters? A: Hooters has mounting debts to the tune of $376 million.
Q: How many Hooters locations will be franchised? A: The remaining Hooters locations will be franchised after the bankruptcy protection process is finished.
Q: What is the expected growth of Twin Peaks? A: Twin Peaks expects to exceed $1 billion in sales over the next five years and has signed franchise agreements to open 24 new locations.
