Breaking News: Hooters Files for Bankruptcy – What This Means for Fans and the Future of the Brand | CNN Business

Hooters, the famous restaurant chain recognized for its chicken wings and vibrant all-female wait staff, has announced that it is filing for Chapter 11 bankruptcy. This move aims to restructure its finances but assures customers that the brand is far from disappearing.

The company plans to sell its 100 company-owned locations to two franchise groups that currently operate Hooters restaurants in Tampa and Chicago. Combined, these groups run about a third of Hooters’ franchise locations in the United States.

Hooters isn’t alone in this struggle. Other well-known fast-casual dining chains, like BurgerFi and Red Lobster, have also faced bankruptcy in recent months. Many restaurants are grappling with rising costs for supplies and labor, which have led to hard decisions, including restaurant closures.

Last year, Hooters closed several locations, citing these rising costs as a primary reason. The company also faces heavy scrutiny over workplace practices, with several lawsuits for issues like gender and racial discrimination.

As Hooters navigates its bankruptcy, it plans to exit the process in about 90 to 120 days. CEO Sal Melilli emphasized that this move is crucial for strengthening the brand’s financial standing and continuing to provide the quality dining experience customers expect.

While in bankruptcy, Hooters will maintain normal operations but may close more of its company-owned locations as it reevaluates its business strategies. Nord Bay Capital and TriArtisan Capital Advisors, private equity firms that purchased Hooters in 2019, will no longer have control over the brand after the sale to the franchise groups.

Interestingly, the buyers include some of Hooters’ original founders, who hope to restore the brand to its “roots.” Neil Kiefer, the CEO of the new franchise group, mentioned that their turnaround plan involves making Hooters more family-friendly, which might shift the restaurant’s image away from its previous, more provocative marketing.

As we look at Hooters’ journey, it may remind us that many companies undergo significant challenges and transformations. According to a recent survey by the National Restaurant Association, nearly 40% of restaurant owners report that inflation is their top concern. This context sheds light on the broader struggles in the restaurant industry.

Despite the challenges, Hooters is determined to revive its brand and ensure that its famous restaurants remain a staple for fans across the country. For more details about the ongoing changes and future plans, you can check out this Bloomberg article.

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