Hooters of America has officially filed for bankruptcy protection in Texas, aiming to tackle its substantial $376 million debt by transferring ownership of all company-owned restaurants to a franchise group backed by some of the brand’s original founders. The filing was made in the Northern District of Texas, with the company currently operating 151 locations directly and having 154 franchisee-run establishments mainly across the United States.

In recent years, Hooters has faced considerable challenges, similar to many other casual dining restaurants, primarily due to inflation, rising labor and food costs, and decreasing consumer spending. Following a trend witnessed in the restaurant industry, where names like Red Lobster and TGI Fridays also filed for bankruptcy in the previous year, Hooters is taking drastic steps to remain operational.

The buyer group, consisting of two existing franchisees familiar with the brand's heritage and performance, has expressed a commitment to taking Hooters “back to its roots,” according to CEO Neil Kiefer. "With over 30 years of hands-on experience across the Hooters ecosystem, we have a profound understanding of our customers and what it takes to not only meet, but consistently exceed their expectations," Kiefer stated.

Established in 1983, Hooters is recognizable for its chicken wings and the unique outfits worn by its female servers, colloquially known as "Hooters Girls." Despite being a cultural icon for decades, the company has undergone scrutiny and faced lawsuits concerning its hiring practices and employee treatment, leading to changes in operations over time.

During the bankruptcy proceedings, Hooters has assured customers that restaurants will remain open, operating in a "business-as-usual manner," with no immediate changes to menu items or loyalty programs expected. The transition will reportedly facilitate a streamlined, franchising-only model to sustain growth.

As the restaurant seeks to finalize this transition with the backing of $35 million in financing from existing lenders, Hooters aims to emerge from bankruptcy within three to four months, reinforcing its market positioning as a significant player in the casual dining landscape.

For more details, visit BBC and Business Insider.