Hooters to prepare for bankruptcy

Hooters Teeters on the Brink of Bankruptcy

Hooters—the iconic chain known for its tight-fitting uniforms, wings, and beer—may soon file for bankruptcy as it struggles to restructure its operations, according to Bloomberg News.

Exploring Chapter 11 Protection

The company has brought in the law firm Ropes & Gray to help navigate the process, sources familiar with the discussions told Bloomberg. While a final decision has yet to be made, a Chapter 11 filing could happen within the next two months.

To tackle its financial woes—particularly its debt burden—the Atlanta-based chain is also working with turnaround consultants from Accordion Partners. Meanwhile, several creditors have sought financial guidance from investment bank Houlihan Lokey.

Mounting Debt and Industry Struggles

Hooters raised about $300 million in 2021 through asset-backed bonds, a financing method that allows businesses to leverage franchise fees and other assets as collateral. This type of debt—known as whole-business securitization—is commonly used by restaurant chains, gyms, and other franchise-heavy businesses.

Hooters isn’t the only casual dining chain in distress.

• TGI Friday’s recently lost control of some assets due to missed debt payments.
• Red Lobster filed for bankruptcy in May.

As Hooters fights to stay afloat, its future remains uncertain—another sign of the ongoing struggles in the restaurant industry.