Hooters Closing Dozens of Locations Amid Financial Struggles
Hooters unexpectedly shuts down numerous eateries.
In an unexpected turn of events, famous chicken wing chain, Hooters, has shuttered numerous establishments, just a few months after filing for bankruptcy and assuring customers that it wasn't going anywhere.
"After weighing the necessary steps to set our company on a prosperous path, Hooters regrettably decided to close several company-owned locations." a representative stated to CNN.
Although the locations shuttered weren't explicitly listed, local reports suggest around 30 spot closures in places like Florida, Georgia, Michigan, North Carolina, South Carolina, Tennessee, and Texas.
Hooters expressed optimism about the future, declaring that "we're here to stay, and by fine-tuning our operations for our long-term objectives, Hooters will thrive under a pure franchise business model."
The 42-year-old brand, recognized for its orange-clad, all-female waitstaff, filed for bankruptcy back in March. Hooters is in the process of selling all 100 of its company-owned restaurants to two franchisee groups who operate Hooters locations in the Tampa, Florida, and Chicago areas.
The closures aren't completely shocking, given that Hooters announced it was assessing the company's operational footprint for its company-owned locations, promising a reduction in total locations. Hooters had already closed numerous locations before bankruptcy, back in early 2024.
Hooters' changes come in the wake of Bahama Breeze, a Darden Restaurants-owned restaurant chain, closing 15 locations. Both chains cater primarily to middle and lower-income families looking for sit-down dining experiences, but with inflation eroding disposable income, diners have been abandoning these establishments.
Consumer sentiment has plummeted in recent months, and in May, remained at an almost unparalleled low, according to the University of Michigan's closely-watched economic sentiment indicator.
Closing underperforming units might be better for the chain overall than attempting to revive them, as investing in their rescue could harm the entire chain. As Maeve Webster, president of consulting firm Menu Matters, recently told CNN, "It's similar to trimming a menu: It's better to eliminate items that aren't selling or rarely selling to upgrade the quality and reliability of the remaining offerings."
TGI Fridays, aiming to exit bankruptcy this summer, has gradually been shuttering locations while navigating Chapter 11. The chain recently revamped its menu for its remaining 85 US locations in an effort to revive customer interest.
Chains like Hooters and TGI Fridays are succumbing to financial difficulties engendered by a combination of factors, such as inflation, decreasing consumer sentiment, and the need for financial restructuring during bankruptcy. Consumer preferences have shifted towards more casual, cost-effective dining experiences, prompting traditional chains to adapt or face termination. The boom of delivery and take-out services has also transformed the dining landscape. These factors have contributed to a significant restructuring of the restaurant industry, with iconic, longstanding chains facing dwindling profits and going through radical changes to remain competitive.
In the evolving landscape of the restaurant industry, Hooters intends to refocus its strategy by closing underperforming company-owned locations, following a similar path taken by other chains like Bahama Breeze and TGI Fridays. Amid rising inflation and decreasing consumer sentiment, financing and maintaining the success of business establishments, such as Hooters, has become increasingly challenging.
