Hooters collapse in America mirrors its demise in Australia
Hooters, known for its young wait staff in low-cut tops, has finally lost its way in the US - years after Australia predicted its demise.
When it comes to the demise of the once popular restaurant chain Hooters, it seems Australia was the canary in the coalmine.
The news this week that Hooters has filed for bankruptcy in American as it struggles to deal with $603m in debt, could be the beginning of the end for the global franchise.
That development came around a decade after the bottom fell out of the restaurant chain in Australia.
Dreamt up in Clearwater Florida in 1983 by “six businessmen with no restaurant experience whatsoever got together to open a place they couldn’t get kicked out of” Hooters grew into a global empire of 420 locations in 29 countries.
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Celebrities such as Holly Madison and Chrissy Teigan cut their teeth at the restaurants before they become big names.
And the chain’s lighthearted approach to hospital found it a foothold in popular culture. However that now seems a long time ago.
From those heights, Hooters has now hit the skids.
It’s bankruptcy filing also means it will close 100 locations across the US. However the company CEO “our renowned Hooters restaurants are here to stay”.
HOOTERS SINKS IN AUSTRALIA
It was the same tune for Hooters in Australia, which opened with much fun and fanfare before it’s somewhat controversial appeal eventually grew stale for customers Down Under.
The first Australia Hooters location was opened in western Sydney in 2006.
Two more restaurants in Sydney followed before the franchise moved its attention to Queensland.
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According to the Hooters website, the appeal of the “globally recognised icon” was “The casual beach-themed establishments feature music, sports on large flat screens, and a menu that includes seafood, sandwiches, burgers, salads, and of course, Hooters original chicken wings.
“Others have arrived, departed, and even flat out copied our formula, but we remain the genuine original.”
And certainly Hooters’ simple, scantily-clad approach did have its appeal, for a time, in Australia.
But by 2015, it was struggling and was put into voluntary administration.
The company survived that scare but was plunged into administration again three years later as it battled in an increasingly competitive hospitality environment, one in which pubs had aggressively re-entered.
Hooters also failed to keep up with changing times and customer’s new demands and expectations.
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Like with Starbucks and several other American chains that have battled unsuccessfully to gain a lasting foothold in Australia, local tastes were not super inspired by the one size fits all cookie cutter approach to food and entertainment.
In August 2018, Hooters in Australia was again placed into voluntary administration and restaurants in numerous locations including Penrith, Parramatta, Campbelltown and the Gold Coast were put up for sale.
“Australia’s branch of the well-known American food chain Hooters has been placed into voluntary administration in order to give the company some ‘breathing space’ and help the owner reassess the business and his involvement moving forward,” the administrator appointed for the companies trading under Hotr Australia Pty Ltd, Veritas Advisory said in a statement.
“The director has advised that legacy issues as well as changes in the conditions required to meet working visas has added to the challenges in recent times faced in the competitive hospitality industry.”
However that didn’t keep the wolves from the door and Hooters’ footprint in Australia continued to dwindle.
Now just the one Australian location has survived - Hooters Parramatta.
It’s unclear how the latest developments in American will impact that sole Aussie franchise.
HOOTERS DESPERATE BID TO STAY ALIVE
In the US, Hooters will also slim down operations in a bid to stay alive.
It will close 40 of its remaining 300 stores - around 13 per cent of locations that were trading.
That comes after they shuttered 12 per cent of their locations in 2018, as Hooters hit the wall in Australia.
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“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.”
All of the Hooters US locations will be sold to a “highly experienced” buyer group consisting of two existing Hooters franchisees, the company said.
“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.”
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Originally published as Hooters collapse in America mirrors its demise in Australia
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