Iconic global restaurant chain Hooters files for bankruptcy in US
Global restaurant franchise Hooters has filed for bankruptcy, the company announced on Tuesday.
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Global restaurant franchise Hooters has filed for bankruptcy, the company announced on Tuesday, in a bid to address $US376 million ($602.8m) debt.
The hospitality group, founded in 1983 and best known for its all-female waitstaff clad in orange hotpants, will sell all 100 of its company-owned US restaurants, according to a statement. It plans to exit Chapter 11 bankruptcy in “approximately 90-120 days”.
Hooters of America CEO Sal Melilli insisted that despite the news, “our renowned Hooters restaurants are here to stay”.
“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,” Mr Melilli said.
It’s unclear at this stage whether the move will affect the chain’s single remaining Australian location in Parramatta, in Sydney’s west.
“I've seen first-hand the incredible value and opportunities our brand brings to life, and I look forward to continuing that momentum well into the future,” Mr Melilli said.
“I’m incredibly grateful to our valued customers, partners, and employees for their continued support.”
All of Hooters’ corporate-owned locations in the US will be sold to a “highly experienced” buyer group comprised of two existing Hooters franchisees, the company said in a release. The impacted restaurants will remain open during the transition.
“With over 30 years of hands-on experience across the Hooters ecosystem, we have a profound understanding of our customers and what it takes to not only meet, but consistently exceed their expectations,” CEO of Hooters Inc., Neil Kiefer, said, on behalf of the buyer group.
“As we look toward the future, we are committed to restoring the Hooters brand back to its roots and simplifying HOA’s operations by adopting a pure franchise model that will maximise the potential for sustainable, long-term growth.
“The foundation we’ve laid ensures the continued success of our brand – one that is driven by a relentless focus on delivering an exceptional experience each and every visit for our customers.”
It comes after the restaurant chain announced last June it would close more than 10 per cent of its US stores due to “underperformance”. Its management at the time said the company, famous for its buxom servers, remains “highly relevant”.
Hooters, which the company mockingly insists is named after its owl mascot Hootie, confirmed it would immediately close 40 of its remaining 300 US stores, around 13 per cent of the total that were trading.
That followed a reduction in locations by around 12 per cent in 2018. At one point Hooters had more than 400 stores worldwide.
“Like many restaurants under pressure from current market conditions, Hooters has made the difficult decision to close a select number of underperforming stores,” the company, which is owned by private investors Nord Bay Capital, told USA Today in a statement.
“Ensuring the wellbeing of our staff is our priority in these rare instances.”
Australian Hooters all but closed
Hooters opened stores in Australia to capitalise its then success.
But in 2018, the US owners sold its remaining branches which were located in Parramatta, Penrith and Campbelltown in Sydney, the Gold Coast, Townsville and elsewhere. Only the Parramatta location remains.
Hooters opened its first store on October 4, 1983, in Clearwater, Florida by six business man who, the Hooters website proclaimed, had “absolutely no previous restaurant experience,” and wanted to “open a place they couldn’t get kicked out of”.
The menu of all American favourites, from burgers to wings, served by scantily clad young women was a winner.
In 1986, Hooters released its first calendar featuring a selection of its female wait staff.
Originally published as Iconic global restaurant chain Hooters files for bankruptcy in US
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