Hooters, the well-known American restaurant chain famous for its chicken wings and distinctively attired waitstaff, has taken steps to file for Chapter 11 bankruptcy protection. This legal action was initiated by HOA Restaurant Group on a recent Monday in the North Texas Bankruptcy Court located in Dallas.

Financial Challenges and Future Plans

The move comes as Hooters grapples with mounting debts and financial distress. In a public statement, the company reassured its patrons that it is committed to remaining operational throughout the restructuring process. The company aims to resolve its financial difficulties within a few months.

Notably, a coalition of Hooters’ founders, who own approximately 33% of the chain’s U.S. locations—including nearly half of its most profitable restaurants—plans to acquire and manage additional outlets. According to Hooters’ official announcement, “Hooters is here to stay, and with a stronger financial foundation and streamlined operations on the other side of this process, we will be well-positioned to continue delivering the guest-obsessed hospitality experience and delicious food our valued customers and communities have come to expect well into the future.”

Background and Ongoing Challenges

Founded in Clearwater, Florida, in 1983 and now headquartered in Atlanta, Hooters has faced numerous challenges over the years. Its troubles were compounded last year when the brand’s long-term partnership with Hendrick Motorsports concluded due to unmet financial obligations associated with the sponsorship of NASCAR driver Chase Elliott’s No. 9 car.

The restaurant chain has been scrutinized for its hiring practices, particularly regarding its exclusive employment of “Hooters Girls.” In a significant legal development, Hooters consented to a settlement agreement of $250,000 and other corrective measures to resolve a race and color discrimination lawsuit in Greensboro, North Carolina, filed by the U.S. Equal Employment Opportunity Commission.

Adaptation Attempts

In recent years, Hooters has sought to adapt to changing consumer preferences. In 2019, it divested from its Las Vegas hotel-casino location, which was subsequently rebranded as OYO Hotel and Casino. In addition, in 2017, Hooters experimented with a location that featured a different service concept, opting not to have employees in the traditional attire that has characterized its brand.

Despite these changes, in 2022, the company refuted claims suggesting a potential closure or rebranding to align with evolving customer tastes.