Is Hooters filing for bankruptcy?

Hooters — a name that’s synonymous with wings, sports, and a bit of controversy — has been a fixture in the casual dining world.

Known for its scantily clad servers in orange shorts, sports-heavy atmosphere, and unapologetically greasy menu, Hooters has long leaned into its cheeky brand identity that played into a particular kind of “man-cave” aesthetic. But as the world changes, brands like Hooters are finding it harder to keep up. And now, the big question looms: is Hooters headed for bankruptcy?

A potential bankruptcy filing would be the latest in a string of challenges for Hooters, which has been grappling with declining foot traffic, mounting debt, and increasing competition.

How did the chain get to this point, and what’s next?

According to reports, the company is now exploring the possibility of filing for Chapter 11 bankruptcy, a process that would allow it to restructure its debt while continuing to operate. While no final decision has been made, sources suggest that a filing could happen within the next two months, as per the New York Post.

This isn’t the first time Hooters has faced financial pressure. In 2021, the company raised approximately $300 million through asset-backed bonds — a type of financing where franchise fees and other assets are used as collateral. While this move provided a temporary lifeline, it didn’t resolve the underlying issues. In fact, revenue declines have made it increasingly difficult for Hooters to meet its debt obligations, leading to a downgrade of its bonds by the Kroll Bond Rating Agency. In June 2024, Hooters closed dozens of its “underperforming” locations across the U.S. This included 17 closures in Texas alone, along with others in states like Alabama, Indiana, Kentucky, and Florida. Altogether, the chain has reduced its number of locations by at least 12% since 2018, according to consultancy Technomic.

Hooters isn’t the only casual dining chain facing trouble. In the past year alone, several major restaurant brands have filed for bankruptcy or undergone significant restructuring. Red Lobster filed for bankruptcy in May 2024, and Buca di Beppo followed shortly thereafter. TGI Fridays, meanwhile, had to cede control of some of its assets after failing to meet its debt obligations. This wave of financial distress highlights broader challenges in the restaurant industry. Rising food and labor costs, combined with changing consumer habits, have made it increasingly difficult for traditional sit-down chains to compete. Many are finding it necessary to close underperforming locations, or even file for bankruptcy in an effort to stay afloat.

Meanwhile, Hooters has also faced competition from similar concepts like Twin Peaks, which offers a more modern take on the “sports bar with servers” model. Interestingly, despite its struggles, the chain has expressed interest in expanding. The company has announced plans to open new locations both domestically and internationally. However, whether these plans are realistic given the current financial situation is another question entirely. In the meantime, as reported by Bloomberg, Hooters is working with turnaround consultants from Accordion Partners and legal advisors from Ropes & Gray to explore its options.