Hooters, known for skimpy server outfits, files for bankruptcy protection

Hooters, the U.S.-based restaurant chain known for chicken wings and skimpy wait-staff outfits for its "Hooters Girls," has filed for bankruptcy protection.

HOA Restaurant Group filed the motion for Chapter 11 protection Monday in the North Texas Bankruptcy Court in Dallas.   

The company ran into financial woes as its debts mounted, but it says it intends to stay open and resolve its troubles within months. A group of the company's original founders that owns almost a third of Hooters' U.S. locations, including about half of its biggest volume restaurants, plans to buy and operate more of the outlets, Hooters said in a news release.

"Our renowned Hooters restaurants are here to stay and we are taking action to strengthen our business to better serve our valued customers over the long term," the company said in a notice on its website.  

The privately-owned company, which shares a private equity owner with recently-bankrupt TGI Fridays, currently directly owns and operates 151 locations, with another 154 restaurants operated by franchisees, primarily in the United States.

The company told CBC News in a statement that all franchise locations, including those in Canada and other locations outside of the U.S., are not impacted by the Chapter 11 process, and will operate as usual. There are five Hooters restaurants in Canada: two in Ontario, one in Saskatoon, one in Winnipeg and one in Montreal.  

Hooters, based in Atlanta, was founded in Clearwater, Fla., in 1983. Known for its chicken wings and an all-female serving staff dressed in tight tank tops and shorts, the restaurant was once a staple chain across the U.S. — but trouble has been brewing for a while.

Hooters had sponsored the No. 9 NASCAR car driven by Chase Elliott since 2017, but last year, Hendrick Motorsports ended its ties to the longtime sponsor because it was not meeting its financial commitments.The Hooters hotel-casino off the Las Vegas Strip was also sold to an Indian hotel company in 2019 and rebranded as the OYO Hotel and Casino.

The "breastaurant" chain's business strategy has faced challenges over the years, including lawsuits over its hiring of only "Hooters Girls," and the treatment of serving staff. In Michigan, two servers sued the restaurant in the early 2010s for allegedly telling them to lose weight — a case that was settled out of court.

Last year, the company agreed to pay $250,000 US and provide other relief to settle a race and colour discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission against a Hooters outlet in Greensboro, N.C., after employees accused the location of deliberately failing to recall Black employees after a COVID-motivated layoff.

In 2017, the company tried opening a restaurant that didn't feature wait staff in tight tops, as a test of a different approach to its original concept.

The restaurant refuted claims in 2022 that it was shutting down and rebranding due to changing customer tastes. 

Plan for bankruptcy recovery 

The buyer group set to take over the corporate-owned locations has pledged to bring Hooters "back to its roots."

Hooters did not disclose the purchase price of the transaction, which must be approved by a U.S. bankruptcy judge before it becomes final.

Hooters said it expects to complete the deal and emerge from bankruptcy in three to four months. The company has lined up about $35 million US in financing from its existing lender group to complete the bankruptcy transaction.