Hooters – the restaurant chain known for chicken wings and “Hooters girls” servers – may have filed for Chapter 11 bankruptcy, but the company says the orange shorts are here to stay.
In a Monday evening press release, Hooters of America, LLC said that its restaurants would remain open even though it had entered into a Restructuring Support Agreement. Those are “contracts that commit bankruptcy parties to supporting a plan of reorganization that will conform to certain requirements,” and are a common Chapter 11 feature, according to Boston University School of Law experts.
“Specifically, the Company has reached an agreement in principle with a highly experienced group of current franchisees… to acquire and operate certain Company-owned Hooters locations,” said the release. It added that this group is “comprised of two existing Hooters franchisees (including Hooters Inc., the original Hooters founders), who collectively currently own and operate over 30% of the domestic franchised Hooters locations, including 14 of the 30 highest volume restaurants.”
This plan was met with “near unanimous support,” said the company. After completion, all its locations would be franchise-owned.
Per the Hooters website, the company’s origins go back to 1983 in Clearwater, Fla. There, “six businessmen with no restaurant experience whatsoever got together to open a place they couldn’t get kicked out of,” said the site. Now, there are more than 420 locations in 29 countries.
“Our renowned Hooters restaurants are here to stay. Today’s announcement marks an important milestone in our efforts to reinforce Hooters’ financial foundation and continue delivering the guest-obsessed hospitality experience and delicious food our customers and communities have come to expect,” said Sal Melilli, Chief Executive Officer of Hooters of America.
Going forward, the company expects to move through the Chapter 11 process quickly, it said. In fact, it plans to emerge from bankruptcy in 90 to 120 days. During this process, its locations are expected to remain open – to fund its operations, Hooters is seeking $40 million of debtor-in-possession (“DIP”) financing from certain of its existing lenders. Still, the company said that, as part of broader plans, Hooters will evaluate its operational footprint.
Neil Kiefer, CEO of Hooters Inc., said this on behalf of the group buying Hooters: “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.”
Hooters isn’t the only restaurant chain that has made headlines for its financial situation this year. Audacy reported in February that Denny’s announced it would close 70 to 90 locations this year.