Hooters of America, a popular restaurant chain known for its chicken wings and servers’ uniforms, has filed for bankruptcy in Texas due to its $376 million debt. The company plans to address this debt by selling all of its company-owned restaurants to a franchise group backed by its founders. The privately-owned company, which also shares an owner with TGI Fridays, intends to sell its 151 corporate-owned locations to a buyer group composed of existing Hooters franchisees. The purchase price of the transaction has not been disclosed and must be approved by a U.S. bankruptcy judge. The buyer group, with backing from Hooters’ original founders, aims to take the restaurant chain “back to its roots” and provide a positive experience for customers. Hooters plans to emerge from bankruptcy in three to four months with $35 million in financing from its lender group. The bankruptcy filing is due to struggles faced by casual dining restaurants in recent years, including rising costs of labor and food, inflation, and declining consumer spending. Other well-known restaurant chains, such as TGI Fridays, Red Lobster, Bucca di Beppo, and Rubio’s Coastal Grill, have also filed for bankruptcy due to similar challenges. Overall, restaurant prices have risen significantly in the past five years, surpassing consumer prices as reported by the Federal Reserve Bank of St. Louis.
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