Hooters Reportedly Prepping for Bankruptcy
Hooters, the iconic chain known for its wings, beer, and lively atmosphere, is reportedly gearing up for a bankruptcy filing. According to a Bloomberg report, the Atlanta-based brand has enlisted the law firm Ropes & Gray to prepare a potential filing, though no final decision has been made.
The company’s financial woes have been brewing for some time. In September, credit agency KBRA downgraded securities tied to Hooters, citing declining revenue at its restaurants. Meanwhile, data from credit report firm Creditsafe revealed that in 2024, Hooters took roughly four times longer than the industry average to pay its vendors. More than 20% of its outstanding bills were over 90 days overdue last year—an ominous sign for a brand already fighting an uphill battle.
In an attempt to steady the ship, Hooters closed several underperforming locations in June and reportedly sought out restructuring advisors. Still, the challenges have continued to mount. Between 2018 and 2023, U.S. systemwide sales at the chain fell by nearly 15%, and its domestic footprint shrank by 12%, according to Technomic data.
Further compounding its difficulties, Hooters has been working with turnaround advisors from boutique firm Accordion Partners to manage its debt and explore restructuring options. Several of the company’s creditors have tapped investment bank Houlihan Lokey for financial guidance as discussions continue. In 2021, Hooters raised approximately $300 million through asset-backed bonds—a form of whole-business securitization that uses franchise fees and other assets as collateral. However, financial analysts have noted a weakening in the performance of these bonds, leading to concerns about the company’s ability to meet its obligations. The Kroll Bond Rating Agency recently downgraded Hooters’ securitized debt, citing revenue struggles and liquidity issues.
Hooters’ struggles mirror the broader decline of the bar-and-grill dining model. Rising costs, shifting consumer preferences, and increased competition from fast-casual and quick-service restaurants have left many legacy brands reeling. Since its acquisition by Nord Bay Capital and TriArtisan Capital Advisors in 2019, Hooters has navigated ongoing market pressures, closing several locations it deemed underperforming. Despite these closures, the company has continued to explore expansion opportunities, with reported plans to open new restaurants domestically and internationally.
Should the company officially file for bankruptcy, it would join a growing list of sit-down chains—including Red Lobster, TGI Fridays, and Buca di Beppo—that have succumbed to financial pressures in recent years. Industry experts suggest that Hooters may attempt to negotiate a deal with creditors to restructure its obligations and emerge with a leaner, more financially sustainable model. The coming months will be critical in determining whether the company can stabilize its operations and maintain its long-standing presence in the restaurant industry.
Image: Illustration from stock image and Hooters press release.
