Hooters Files for Bankruptcy Amid Financial Struggles
The restaurant chain plans to reorganize while selling its assets to franchise groups.
Hooters, the well-known restaurant chain famous for its signature orange uniforms and chicken wings, has filed for bankruptcy, the company announced.
Despite facing financial difficulties, Hooters stated it does not plan to disappear from the market and will continue operations through a reorganization plan.
As part of the bankruptcy proceedings, Hooters intends to sell its 100 company-owned restaurants to two franchise groups already managing Hooters locations in Tampa and Chicago.
These two groups collectively operate approximately one-third of Hooters' franchise locations in the United States.
Hooters is not the only restaurant chain to seek bankruptcy protection amid severe business conditions.
Similar actions have been taken by other brands such as BurgerFi and Red Lobster.
The company has been encountering workforce challenges, including lawsuits alleging racial and gender discrimination.
Additionally, last year saw the closure of numerous restaurants due to rising food costs and employee wages.
Although Hooters has submitted a bankruptcy filing, it plans to exit the process in approximately 90 to 120 days, according to Sal Melili, CEO of Hooters of America.
He stated, "This announcement marks an important step in our efforts to strengthen Hooters' financial foundation and continue to provide the welcoming experience and delicious food that our customers expect."
The company filed for Chapter 11 bankruptcy protection in a Texas court, a common procedure for financially troubled firms hoping to resolve issues through reorganization.
Hooters has indicated that operations will continue as usual, though it noted that it is evaluating the operational scope of its company-owned locations, suggesting that some restaurants may close during the bankruptcy process.
Adam Kifer, a director at Hooters, expressed the intention to return the brand to its roots, aiming to re-establish it as a family dining destination.
"For many years, the Hooters brand has been owned by private equity firms and other groups without a history or experience with this brand," Kifer stated in a release.
Despite facing financial difficulties, Hooters stated it does not plan to disappear from the market and will continue operations through a reorganization plan.
As part of the bankruptcy proceedings, Hooters intends to sell its 100 company-owned restaurants to two franchise groups already managing Hooters locations in Tampa and Chicago.
These two groups collectively operate approximately one-third of Hooters' franchise locations in the United States.
Hooters is not the only restaurant chain to seek bankruptcy protection amid severe business conditions.
Similar actions have been taken by other brands such as BurgerFi and Red Lobster.
The company has been encountering workforce challenges, including lawsuits alleging racial and gender discrimination.
Additionally, last year saw the closure of numerous restaurants due to rising food costs and employee wages.
Although Hooters has submitted a bankruptcy filing, it plans to exit the process in approximately 90 to 120 days, according to Sal Melili, CEO of Hooters of America.
He stated, "This announcement marks an important step in our efforts to strengthen Hooters' financial foundation and continue to provide the welcoming experience and delicious food that our customers expect."
The company filed for Chapter 11 bankruptcy protection in a Texas court, a common procedure for financially troubled firms hoping to resolve issues through reorganization.
Hooters has indicated that operations will continue as usual, though it noted that it is evaluating the operational scope of its company-owned locations, suggesting that some restaurants may close during the bankruptcy process.
Adam Kifer, a director at Hooters, expressed the intention to return the brand to its roots, aiming to re-establish it as a family dining destination.
"For many years, the Hooters brand has been owned by private equity firms and other groups without a history or experience with this brand," Kifer stated in a release.
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