Hooters declares chapter as way forward for scantily-clad waitresses up within the air
Hooters of America has filed for bankruptcy as it scrambles to deal with $376 million (£291 million) in debt by selling its company-owned restaurants to a group backed by its founders
The scantily-clad waitresses at Hooters could be a thing of the past as the iconic restaurant chain has filed for bankruptcy.
Hooters of America has filed for bankruptcy in Texas as the company’s bosses grapple with a staggering $376 million (£291 million) debt.
The hospitality group, best known for its all-female waitstaff, currently owns and operates 151 restaurants, with another 154 franchises. They are planning to sell all of its corporate-owned restaurants to group of existing Hooters franchisees, who operate 14 of Hooters’ most popular outlets, around the Tampa, Florida, and Chicago, Illinois, areas.
Chief executive of Hooters of America Sal Melilli said in a statement: “Our renowned Hooters restaurants are here to stay. Today’s announcement marks an important milestone in our efforts to reinforce Hooters’ financial foundation.”
Neil Kiefer, CEO of franchisee group Hooters inc, said that the founder-led buyout would allow the brand to go “back to its roots” as a family focussed restaurant chain.
Hooters did not reveal the value of the planned deal, which still needs to be approved by a US bankruptcy judge.
It said the rescue plan is expected to be completed within the next four months as the company said it planned to exit Chapter 11 bankruptcy in “approximately 90-120 days”.
The eye-popping chain closed around 40 “underperforming” outlets in Florida, Kentucky, Rhode Island, Texas and Virginia early last year in an attempt to reduce costs. However, the debts continue to pile up, necessitating more drastic measures for the 41-year-old brand.
Much like other struggling chains such as Red Lobster, which filed for bankruptcy last summer, Hooters attributes its difficulties to rising rent and food costs and a decrease in customers dining out.
Last year, a spokesperson for Hooters told Daily Mail: “Like many restaurants under pressure from current market conditions, Hooters has made the difficult decision to close a select number of underperforming stores.
“We look forward to continuing to serve our guests at home, on the go and at our restaurants here in the US and around the globe.”
Hooters filed for Chapter 11 bankruptcy protection in a Texas court, a common route for struggling companies hoping to solve their financial problems through reorganisation.
The first Hooters branch opened its doors in Clearwater, Florida, in 1983. As recently as last May, it was still opening restaurants – three in Las Vegas and three in Florida.
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