American restaurant chain Hooters of America has filed for bankruptcy in a bid to restructure its US$376 million (A$597 million) of debts and sell its 151 restaurants to a group led by its founders.
Hooters said it filed voluntary petitions for chapter 11 cases in the United States Bankruptcy Court for the Northern District of Texas on Monday (Tuesday AEDT).
“The company expects to move through this process swiftly, with the goal of emerging from chapter 11 in approximately 90-120 days,” Hooters said in a media release.
The privately-owned company said it had agreed in principle for a group of franchisees including the unnamed founders to buy its company-owned locations, which are distinct from the 154 restaurants, mostly in the United States, operated by franchisees.
Hooters said it had entered into a restructuring agreement with near unanimous support from its key stakeholders to sell the restaurants and ensure the continued operation of the business under new ownership.
Hooters of America President and CEO Sal Melilli said the announcement marked an important milestone in efforts to reinforce Hooters’ financial foundation.
“Our renowned Hooters restaurants are here to stay,” Melilli said in a release.
Hooters Inc CEO Neil Kiefer said that with more than 30 years of hands-on experience, the buyers' group had a profound understanding of their customers and what it took to meet and consistently exceed their expectations.
“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 maximise the potential for sustainable, long-term growth,” Kiefer said.
Founded in 1983, Hooters is known for its mostly female waiters wearing orange shorts and singlets, sports-bar atmosphere and bar-style food including chicken wings but struggles with rising costs due to inflation and low demand from Americans struggling with living costs.
