Hooters, the American restaurant chain renowned for its chicken wings and the distinctive uniforms of its waitstaff, has filed for Chapter 11 bankruptcy protection. This strategic move aims to restructure the company’s operations and address its financial challenges.
Bankruptcy filing and restructuring plans
On March 31, 2025, Hooters submitted a Chapter 11 bankruptcy petition in the North Texas Bankruptcy Court. This legal framework allows the company to reorganize its debts and operations while continuing to function. A central component of Hooters’ restructuring strategy involves selling 100 company-owned restaurants to a consortium of franchisees, including some of the brand’s original founders. These franchisees currently manage 14 of the 30 highest-grossing Hooters locations in the United States.
Factors contributing to financial struggles
Several challenges have precipitated Hooters’ financial difficulties:
- Rising operational costs: Escalating food and labor expenses have significantly impacted profitability.
- Evolving consumer preferences: Shifts in dining habits and increased competition from contemporary casual dining establishments have led to declining sales.
- Controversial brand image: The chain has faced criticism over its portrayal of female staff and has encountered legal issues, including a $250,000 settlement in a race and color discrimination lawsuit in 2024.
Hooters will carry on with operations in all locations during the restructuring phase despite these bankruptcy proceedings. The company plans to exit Chapter 11 in the next 90 to 120 days, with all restaurants converting to franchise operations. CEO Sal Melilli stated that the idea is to support the financial foundation for Hooters and the hospitality experience that customers expect.
Shift towards a family-friendly atmosphere
Hooters seeks a rebranding strategy to change to a more family-oriented environment in response to changing social standards and expand its customer base. This strategy also includes altering employee uniforms and upping the dining experience to appeal to a larger audience.’
List of U.S. store closures
As a result of restructuring efforts, Hooters has pinpointed underperforming locations for permanent closure. The complete list is subject to modifications, but the following are some confirmed locations to be closed:
- Atlanta, GA: Downtown
- Chicago, IL: River North
- Houston, TX: Galleria area
- Los Angeles, CA: Hollywood Boulevard
- New York, NY: Midtown Manhattan
Check with local Hooters to get the most up-to-date information concerning operations.
Take home note
Hooters’ Chapter 11 bankruptcy filing is a turning point in the narrative of the company. Through the restructuring of its affairs, addressing its current financial predicament, and rebranding to attract ultimate consumer acceptance in this modern-day consumer world, Hooters aims to bring back its brand and survive in the competitive restaurant industry.
