Hooters is going bust. The U.S. restaurant chain, known for chicken wings and its skimpy “Hooters Girls” wait-staff outfits, has filed for bankruptcy protection. HOA Restaurant Group filed the motion for Chapter 11 protection on Monday, March 31, 2025, in the North Texas Bankruptcy Court in Dallas. This filing marks the latest in a series of financial troubles plaguing legacy restaurant chains amid high food and labor prices, changing customer tastes, and increasing competition from newer casual dining options like Shake Shack.
As part of its bankruptcy plan, Hooters intends to sell 100 company-owned U.S. restaurants to a group of franchisees, which includes the chain's founders. These franchisees currently operate 14 of the 30 highest-volume Hooters restaurants in the U.S., indicating a strong potential for revitalizing the brand under experienced leadership. Neil Kiefer, CEO of the franchise group Hooters Inc., expressed optimism about the future, stating, "For many years now, the Hooters brand has been owned by private equity firms and other groups with no history or experience with the Hooters brand. As a result of these transactions, the Hooters brand will once again be in the hands of highly experienced Hooters franchisees, and we will be well-positioned to return this iconic brand to its historic success."
Founded in Clearwater, Florida, in 1983, Hooters has grown to include over 420 restaurants in 29 countries. However, the chain's business strategy has faced significant challenges over the years. In 2019, for instance, the Hooters hotel-casino off the Las Vegas Strip was sold to an Indian hotel company and rebranded as the OYO Hotel and Casino. Additionally, in 2024, Hooters faced a $250,000 settlement over a race and color discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission. The lawsuit alleged that a Hooters in North Carolina laid off 43 employees during the COVID pandemic and then recalled primarily white employees and Black employees with lighter skin tones.
In recent years, Hooters has also had to scale back operations significantly. Last year, the company closed around 40 underperforming U.S. locations, with the financial pressures stemming from rising food and labor costs being a primary factor. The chain's financial woes were further highlighted when Hendrick Motorsports ended its sponsorship deal with Hooters for the No. 9 NASCAR car driven by Chase Elliott, citing the restaurant's failure to meet its financial commitments.
Despite these challenges, Hooters plans to maintain its operations during the bankruptcy process. According to the company, franchisees or licensing partners will continue to operate all existing locations, including those outside the U.S. The franchise group buying the corporate-owned locations operates more than 30% of U.S. franchises, and it is expected to help tackle approximately $376 million in debt.
Neil Kiefer, in a statement, emphasized the company's commitment to revitalizing the brand, saying, "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 maximize the potential for sustainable, long-term growth." The chain has also announced efforts to create a more family-friendly atmosphere, moving away from its previous emphasis on bikini-themed events during holidays.
For fans of the chain, there is some good news: Hooters expects to exit bankruptcy within 90 to 120 days. Locations across the U.S., including those in Indiana, Kentucky, and Illinois, will remain operational during this transition. Hooters has reassured customers that it will continue delivering the same guest-obsessed hospitality experience and delicious food that patrons have come to expect.
As the restaurant industry continues to evolve, Hooters' future will depend on its ability to adapt to changing consumer preferences while maintaining the core elements that have defined its brand for over three decades. The challenges it faces are emblematic of a broader trend affecting many traditional dining establishments, as they grapple with the dual pressures of modern consumer expectations and economic realities.
In summary, Hooters' bankruptcy filing marks a significant moment in the history of a brand that has become synonymous with sports and casual dining. With the franchise group poised to take control and a commitment to returning to its roots, the iconic chain may yet find a way to navigate its financial troubles and emerge stronger in the coming months.
