Hooters Files For Bankruptcy, Says Brand 'Isn't Going Anywhere'
Hooters announced Monday it filed for Chapter 11 bankruptcy protection
The company plans to sell its 100 owned locations to two franchise groups
Hooters has said it will take 90-120 days to exit bankruptcy
Hooters, the restaurant chain known for its all-female waitstaff, neon orange branding, and chicken wings, on Monday it filed for bankruptcy protection.
Hooters of America said the Chapter 11 bankruptcy filing would allow it to continue normal operations during the proceeding.
Hooters said in a statement that all of the 100 restaurants it currently owns will be sold off to two existing franchisees. The existing franchisees own and operate more than 30% of Hooters locations in the U.S. .
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Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – One of the franchisees is Hooters Inc., which includes many of the original Hooters founders.
"With over 30 years of hands-on experience across the Hooters ecosystem, we have a profound understanding of our customers and what it takes to not only meet, but consistently exceed their expectations," Hooters Inc. CEO Neil Kiefer, speaking on behalf of the buying groups, said in the statement. "As we look toward the future, we are committed to restoring the Hooters brand back to its roots and simplifying [Hooter's of America's] operations by adopting a pure franchise model that will maximize the potential for sustainable, long-term growth."
The bankruptcy filing was made in the U.S. Bankruptcy Court for the Northern District of Texas. Hooters is seeking approval of $40 million of debtor-in-possession financing from its existing lenders, including $35 million of new capital. As of this writing, it has acquired just $35 million from its existing lender group to help complete the bankruptcy transaction. The company expects to exit the proceedings in 90-120 days.
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"Our renowned Hooters restaurants are here to stay," Hooters of America CEO Sal Melilli said in the statement. "Today's announcement marks an important milestone in our efforts to reinforce Hooters' financial foundation and continue delivering the guest-obsessed hospitality experience and delicious food our customers and communities have come to expect. I've seen firsthand the incredible value and opportunities our brand brings to life, and I look forward to continuing that momentum well into the future."
The iconic owl logo and flavorful wings might be here to stay, but the company's image will likely be receiving quite a facelift. In an interview last week with Bloomberg, Kiefer teased plans to make the restaurant chain more family friendly. The first things on the chopping block for the CEO are the iconic uniforms and gimmicks like Bikini Day.
Hooters, which is owned by private-equity firms Nord Bay Capital and TriArtisan Capital Advisors, first revealed plans for a potential restructuring in February.
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This article Hooters Files For Bankruptcy, Says Brand 'Isn't Going Anywhere' originally appeared on Benzinga.com
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