Hooters Files For Bankruptcy, Says Brand 'Isn't Going Anywhere'

The once-ubiquitous Hooters chain, known for its wings and waitresses, has filed for Chapter 11 bankruptcy protection. The move, announced on April 1, 2025, marks a significant shift for the restaurant chain, which has been a staple of American casual dining for decades. The company plans to sell 100 of its company-owned restaurants to a group of franchisees, including the chain’s original founders, in an effort to restructure and emerge from bankruptcy within 90-120 days.

The bankruptcy filing comes as no surprise to those who have been following Hooters' decline. The chain has been struggling with a decrease in customer foot traffic, higher food and rent costs, and a substantial debt load. These issues have led to the closure of over 40 locations across the United States and a decline in sales from $300 million in 2021 to $867 million in 2023, which is less than a 1% increase from the previous year. The company's debt load, which was downgraded by Kroll Bond Rating Agency last year, has made it difficult for Hooters to maintain liquidity and meet its financial obligations.



The proposed transition to a franchisee-owned model aligns with Hooters' historical brand positioning as a casual, beach-themed dining experience. However, it also presents potential challenges, such as the risk of inconsistency in the brand experience across different franchise locations and the potential for franchisees to deviate from the brand's historical positioning. As one social media user pointed out, "Hooters’ shift to being 'PG' and family-friendly just won’t work. Just close up shop; it’s over! You can’t sell a restaurant named 'HOOTERS' as a place for families."

The transition to a franchisee-owned model could also present financial challenges. As Hooters has struggled with declining foot traffic and higher costs, there is a risk that some franchisees may not be able to sustain their locations. This could lead to further closures and a reduction in the overall number of Hooters locations.

Despite these challenges, Hooters' CEO Sal Melilli remains optimistic about the brand's future. "Our renowned Hooters restaurants are here to stay," he said in a statement. "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."

The bankruptcy filing and the restructuring of the company only affect Hooters locations in America. Its worldwide locations are unaffected by the changes. The company has launched a dedicated website for stakeholders to get information about the chapter 11 cases at www.Hooters.com/our-future/.

In conclusion, Hooters' bankruptcy filing is a stark reminder of the challenges facing the restaurant industry today. As Hooters navigates this difficult time, it will be important for the company to stay true to its brand and deliver the unique dining experience that has made it a beloved institution for so many. Only time will tell if Hooters can emerge from bankruptcy stronger than ever and continue to thrive in the years to come.