Hooters Prepares for Bankruptcy Amid Financial Struggles

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Hooters of America, the iconic restaurant chain known for its chicken wings and distinctive branding, is reportedly preparing to file for bankruptcy as it faces mounting financial challenges.

According to sources familiar with the matter, the company is working with creditors and the law firm Ropes & Gray to devise a restructuring plan, with a potential bankruptcy filing expected within the next two months. However, no final decision has been made.

The Atlanta-based chain has been grappling with approximately $300 million in debt tied to asset-backed bonds issued in 2021.

In an effort to cut costs, Hooters shuttered around 40 underperforming locations in 2024, including restaurants in Texas, Florida, Virginia, and Kentucky.

These closures represent a broader trend for the company, which has seen a 12% decline in its total restaurant count since 2018.

Hooters has attributed its struggles to rising operational costs and changing consumer preferences that have led to declining foot traffic. Rival chains such as Twin Peaks and Dave & Buster’s have expanded during this period, further intensifying competition in the casual dining market.

Despite these challenges, Hooters remains optimistic about its future. In a recent statement, the company emphasized its resilience and ongoing efforts to expand domestically and internationally through new restaurant openings and product launches. The chain currently operates approximately 300 locations worldwide.

If Hooters proceeds with bankruptcy, it would join other legacy casual dining brands like Red Lobster and TGI Fridays that have recently sought Chapter 11 protection to restructure their operations amid economic pressures.

Industry analysts suggest that bankruptcy could provide Hooters with an opportunity to shed debt and refocus its business strategy for long-term sustainability.

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