Hooters' Founder Plans Rescue Amid Bankruptcy Fears

The first afternoon of March Madness, 2025, finds the original Hooters restaurant in Clearwater, Florida, buzzing with energy. The atmosphere is electric, with men enjoying the hoops on TV in the bar area, a scene that has become synonymous with the Hooters brand. However, tucked away in a booth, Sherrie Lipply, 67, and her friend Karen Stevenson, 61, are enjoying two plates of wings, a tradition for Lipply when hosting out-of-towners. "It’s because of the atmosphere," she says. "I see as many women here as men sometimes."

This scene encapsulates the duality of Hooters—a brand that has long walked the fine line between edgy and family-friendly. The restaurant's ability to draw a varied demographic, including mixed groups of men and women and even families with kids, underpins a potential plan to save the sputtering chain. If successful, the same Florida founders who sold off the Hooters brand over two decades ago will retake control after the company undergoes a spin through bankruptcy.

The plan, dubbed "re-Hooterization" by Neil Kiefer, CEO of HMC Hospitality Group, aims to return the brand to its roots as a beachy destination offering good food and good service. This shift is a stark contrast to the decisions made by its private equity overlords, which took the brand away from its family-friendly image. The introduction of new waitress uniforms that looked more like underwear and theme nights where servers wore only bikinis were particularly controversial moves. "You go to some parts of the country and people say, ‘Oh, I could never go to Hooters, my wife would kill me,’" Kiefer laments. "That’s depressing to us. We want to change that."

The current era may work in Hooters' favor as it seeks to stabilize the business nationwide. With the playbook for mainstream American culture undergoing a broad rewrite, more customers may be willing to overlook the risqué association Hooters carries with it in some regions, especially if it delivers on the experience. "There are so many opportunities now for ‘eatertainment,’" says Aaron Allen, a restaurant industry analyst. "For a business to be successful and sustainable, it helps to appeal to more than just men."

However, Hooters faces significant challenges. The pandemic battered the industry, and elevated inflation has eroded Americans’ willingness to dine out. For years, people have been shifting toward speedier and cheaper options, and Hooters is contending with the same pressures that pushed casual-dining chains like Red Lobster and TGI Friday’s into bankruptcy in 2024. The turnaround plan would likely see HMC and other operators of Hooters franchises take over most of the US locations currently owned and run by Hooters of America, though some may close.

The end result is that HMC, should the plan go through, would help oversee the overall brand and advise franchisees on how to operate. The fix, according to Kiefer, boils down to three principles: good food, good service, and regular reinvestment in the stores’ operations, something he says has been lacking at the eateries owned by HOA. "There’s a noticeable difference in the way we operate our restaurants compared to the ones owned by Hooters of America," Kiefer notes.

The re-Hooterization strategy aligns with current market trends and consumer preferences by broadening the brand's appeal and enhancing the dining experience. However, Hooters will need to navigate challenges related to its historical image, the delicate balance between edgy and family-friendly, and its financial constraints to successfully execute this transformation.

In summary, Hooters' re-Hooterization strategy is a bold move to reposition the brand as more family-friendly and inclusive. While the challenges are significant, the potential rewards are substantial. If successful, Hooters could regain its market position and attract a broader customer base, ensuring its survival in an increasingly competitive dining landscape.