Hooters of America is reportedly gearing up for a bankruptcy filing in the coming months as the iconic restaurant chain struggles with declining foot traffic and mounting debt, sources familiar with the matter told Bloomberg.
The Atlanta-based casual dining chain has enlisted the legal muscle of Ropes & Gray to handle its restructuring, while turnaround specialists at boutique advisory firm Accordion Partners are helping sort out the financial mess, according to sources who requested anonymity while discussing private dealings. The bankruptcy process is expected to kick off within the next two months.
Hooters’ creditors aren’t sitting idly by either. Some debtholders have tapped investment banking powerhouse Houlihan Lokey Inc. for advice, underscoring the severity of the chain’s financial troubles.
The company has been struggling with cash flow issues as customers increasingly flock to other casual dining and fast-casual options. In recent years, several Hooters locations have closed their doors, a clear sign that the once-popular brand known for its wings and waitstaff is facing an existential crisis.
Adding to the financial woes, Hooters took on significant debt in 2021, issuing about $300 million in asset-backed bonds. These bonds, structured as whole-business securitizations, used the company’s franchise fees and other assets as collateral—a move common among restaurant chains looking to leverage their brand value for quick cash.
Despite the growing speculation, representatives for Hooters, Accordion Partners, and Ropes & Gray did not respond to requests for comment. A spokesperson for Houlihan Lokey also declined to weigh in on the situation.
The looming bankruptcy marks a dramatic downturn for a brand that once dominated the sports bar scene with its signature wings and controversial-but-effective marketing. With an increasingly competitive restaurant landscape and shifting consumer preferences, Hooters now faces the challenge of reinventing itself—or risk being left in the dust.
For now, it looks like the chain’s famous orange shorts and tight cash flow may both be on the chopping block.
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