Hooters of America is reportedly preparing to file for bankruptcy in the coming months as the casual dining chain faces financial challenges. According to Bloomberg, the company is working with creditors and the law firm Ropes & Gray to restructure its business through bankruptcy court. The filing is expected to occur within the next two months, although the plans are not yet finalized.
The restaurant chain, known for its sports bar-style atmosphere and "Hooters Girls," has been struggling with declining foot traffic and liquidity issues, leading to the closure of around 40 underperforming locations in states such as Florida, Kentucky, and Texas. Hooters has approximately $300 million in debt, which has prompted urgent discussions with lenders and advisers.
The company has been affected by rising costs of rent and food, as well as a decrease in customers dining out. Despite these challenges, Hooters has opened six new locations in 2023 and launched a range of frozen food products available in supermarkets across America.
The Chapter 11 bankruptcy process would allow Hooters to restructure its debts and negotiate leases and loans. Similar to other restaurant chains like Red Lobster, which recently emerged from Chapter 11, Hooters aims to stabilize its financial situation and continue operations. The company, which opened its first location in Clearwater, Florida in 1983, now operates about 300 restaurants worldwide.