Hooters Might Be Preparing to File for Bankruptcy – Here’s Everything We Know

Once a staple of American casual dining, Hooters is reportedly preparing to file for Chapter 11 bankruptcy. The chain, renowned for its wings and waitstaff, has been grappling with declining foot traffic and mounting debt, leading to the closure of numerous locations. This move signals a significant shift in the restaurant industry landscape.

In 2024, Hooters shuttered approximately 40 underperforming restaurants across 14 states, including locations in Rhode Island, Virginia, Florida, Kentucky, and Texas. These closures were part of an effort to manage a debt load of around $300 million in asset-backed bonds. Despite these measures, the company continues to face liquidity challenges and a steady decline in customer visits.

To navigate its financial woes, Hooters has enlisted the services of law firm Ropes & Gray to prepare a potential bankruptcy filing. While plans are not yet finalized, court proceedings could commence in the coming months. This legal maneuver aims to restructure the company's operations and address its substantial debt burden.

Hooters' decline isn't occurring in a vacuum. The chain has faced stiff competition from rivals like Twin Peaks, which have been steadily capturing market share. Additionally, changing consumer preferences and societal norms have challenged Hooters' traditional business model, contributing to its financial struggles.

Interestingly, not all Hooters locations are feeling the pinch. HMC Hospitality Group, which owns the original Hooters in Clearwater, Florida, along with several other locations in Tampa Bay and South Florida, reports financial stability and even record sales last year. These franchises appear insulated from the broader corporate challenges, highlighting a disparity in performance across the brand.

News of Hooters' potential bankruptcy has elicited a range of reactions from the public and celebrities alike. Phoenix Suns star Devin Booker took to social media, pleading, "Plz don’t go @Hooters." Similarly, influencer and former professional golfer Paige Spiranac declared, "Not on my watch," in response to the reports.

Hooters' predicament is emblematic of a broader trend affecting casual dining establishments. Chains like Red Lobster and TGI Fridays have also sought bankruptcy protection recently, as inflation and post-pandemic shifts in consumer behavior have led to financial difficulties. The industry is undergoing a transformation, with traditional models being challenged by evolving dining preferences.