Dive Brief:
- Hooters of America said it “made the difficult decision” to close several company-owned locations on Wednesday, a spokesperson said in an email to Restaurant Dive.
- Hooters did not confirm the number of restaurants being impacted, but USA Today listed about 30 locations.
- The closures come a few months after the chain filed for Chapter 11 bankruptcy and nearly a year after it shuttered an estimated 40 underperforming restaurants.
Dive Insight:
The latest round of closures is not expected to impact a previously announced deal in which existing franchisees Hooters Inc. and Hoot Owl Restaurants (The Buyer Group) will acquire 100 company-owned restaurants, according to a press release.
The Buyer Group said it expected the closures announced Wednesday would occur before its transaction closes in August.
The Buyer Group and HOA expect about 200 domestic restaurants and 60 international restaurants to stay open. They represent about $700 million in systemwide sales. The Buyer Group will own 130 restaurants, representing 65% of domestic Hooters restaurants.
“Hooters is here to stay, and by optimizing our business in support of our long-term goals, Hooters will be well-positioned to continue our iconic legacy under a pure franchise business model,” an HOA spokesperson said in an email.
The 100-unit buyout to long-term operators Hooters Inc. and Hoot Owl Restaurants is expected to “greatly simplify [HOA’s] existing business,” The Buyer Group said in a press release.
The acquirers also will provide a bulk of franchisee support functions on behalf of HOA as part of the transaction. Definitive documentation of the transaction will be presented to the bankruptcy court within the next few weeks.
The Buyer Group also will take on oversight of a national ad fund, the central purchasing organization, franchise development and support and other franchising functions.
“Upon completion of these transactions, the Buyer Group intends to return Hooters to the core principles that initially drove its success, including some of its original recipes and original Hooters Girls uniforms,” the press release said. “In addition, the Buyer Group is committed to investing significant resources into the restaurants to bring them up to the high standards of the Buyer Group's current Hooters' restaurants.”
All existing franchised Hooters locations will continue to be operated by existing franchise and license partners, according to a press release.
