Hooters, the well-known restaurant chain, filed for bankruptcy in a Texas court on April 1, 2025. This major financial move comes as the company works to reshape its future while keeping its doors open.
With over 400 locations across 42 states and 29 countries, Hooters plans to maintain normal service during the bankruptcy process. The filing marks a turning point for the casual dining establishment, as its original founders prepare to buy back company-owned restaurants from current private equity owners.
International franchises will not feel the effects of this bankruptcy filing. The chain closed several dozen restaurants last summer as part of earlier restructuring efforts. CEO Neil Kiefer announced plans for “re-Hooterization,” which includes ending certain promotions like “bikini nights.” Bloomberg News had reported rumors of possible bankruptcy weeks before the official filing.
The company promises customers that “It’s always hang time at Hooters.” The path ahead includes big changes.
Key Takeaways
- Hooters filed for Chapter 11 bankruptcy on April 1, 2025, in a Texas court after weeks of financial rumors.
- All restaurants will stay open during bankruptcy proceedings, with the original founders planning to buy back company-owned locations.
- Only U.S. corporate restaurants are affected by the filing, while international locations in 29 countries will continue normal operations.
- The chain plans to shift all locations to franchise operations after bankruptcy, part of what CEO Neil Kiefer calls a “re-Hooterization” effort.
- Hooters closed dozens of restaurants last summer while facing rising labor costs and food prices that have climbed faster than other consumer prices.
Hooters’ Bankruptcy Filing
Hooters filed for Chapter 11 bankruptcy protection in a Texas court this week, marking a major shift for the chicken wing chain. The company plans to sell its corporate-owned restaurants to a group led by its original founders while keeping all locations open during the legal process.
Hooters files for bankruptcy in a Texas court
Hooters of America filed for bankruptcy on April 1, 2025, in a Texas court after weeks of financial rumors. Bloomberg News first reported the restaurant chain’s money troubles before the official filing.
The company plans to keep all locations open during the bankruptcy process, allowing customers to still enjoy their famous chicken wings. This filing marks a major shift for the casual dining brand known for its orange shorts uniform and guest-focused hospitality.
The bankruptcy court will oversee a founder-led buyout of the company-owned restaurants. Original Hooters founders have stepped in to purchase these locations, which could help the chain return to its roots.
Neil Kiefer and Sal Melilli remain key figures in this transition as the brand seeks a stronger financial foundation amid rising labor costs and changing consumer preferences. Restaurant prices across the industry have climbed faster than other consumer prices according to the Federal Reserve Bank of St.
Louis.
Restaurants to remain open during proceedings
Hooters restaurants across the country will stay open during the bankruptcy process. The company made this clear in their announcement, stressing that guests can still enjoy chicken wings and other menu items without disruption.
This move aims to keep jobs intact while the chain works through its financial issues. The bankruptcy plan includes a buyout by the original founders, who will take over company-owned locations.
Our restaurants remain open to serve our guests with the same great food, service, and experiences, said Neil Kiefer, CEO of Hooters of America. This process will strengthen our financial foundation while we continue to deliver guest-obsessed hospitality.
The Texas court overseeing the Chapter 11 filing has allowed normal business operations to continue. Staff members, including the iconic Hooters Girls in their orange shorts, will keep their positions during this transition.
While corporate-owned restaurants face changes, international locations and franchised stores won’t feel the impact of the bankruptcy protection measures. The chain joins other casual dining restaurants like Red Lobster that have struggled with rising food costs and changing customer preferences.
Acquisition of company-owned restaurants by original founders
The original Hooters founders have stepped up to buy the company-owned restaurants as part of the bankruptcy process. This group already runs about one-third of U.S. franchised locations independently from the main company.
Neil Kiefer and other founding members aim to bring the chicken wing chain back to its roots through this purchase. The founder-led buyout creates a path for the restaurant chain to rebuild its financial foundation while keeping its core identity intact.
The buyer group views this acquisition as a chance to strengthen the brand that started in Clearwater, Florida. They plan to focus on what made Hooters popular – its food offerings and unique service model.
The purchase agreement allows the chain to shed some debt while maintaining its operations during the bankruptcy protection period. Restaurant industry experts note this move follows similar patterns seen with other casual dining restaurants facing high labor costs and changing consumer habits.
Impact on Hooters’ Locations
Hooters restaurants across the country will stay open during the bankruptcy process. Fans can still enjoy chicken wings and the same service they expect while the company works through its financial changes.
Emphasis on continued service and operations
Hooters made clear that all restaurants will stay open during the bankruptcy process. “It’s always hang time at Hooters,” the company stated on its website, reassuring loyal customers about continued service.
The chicken wing chain plans to maintain normal business hours at all locations while the court proceedings move forward. Staff members, including the iconic Hooters Girls in their orange shorts, will keep their jobs throughout this transition period.
The bankruptcy filing affects only company-owned restaurants in the United States, not international locations. Neil Kiefer, CEO of Hooters Inc., stressed that guest service remains the top priority despite financial challenges.
Rising food costs and labor expenses have hit many casual dining restaurants hard in recent years. The next phase will see the restaurant chain shift toward more franchise operations as the original founders take control of corporate locations.
International locations unaffected by bankruptcy
Hooters’ global presence remains stable despite the U.S. bankruptcy filing. The restaurant chain runs over 400 locations across 42 states and 29 countries, with all international sites operating as franchises.
These overseas eateries will continue normal business during the bankruptcy process. Guests at foreign Hooters can still enjoy chicken wings and other menu items without disruption to service or staff.
The company made clear that only corporate-owned restaurants in America fall under the current restructuring plan.
The separation between domestic and international operations highlights the different business models within the Hooters brand. While U.S. locations face financial challenges that led to the Texas court filing, the franchise model abroad has created a buffer against these troubles.
This division allows the brand to maintain its global footprint even as its American parent company works through financial struggles. The next section explores the background of Hooters’ financial problems and what led to this point of bankruptcy protection.
Transition to franchise operations after proceedings
Hooters plans to shift all restaurant locations to franchise operations once bankruptcy proceedings end. This major change marks a new chapter for the chicken wing chain as it works to build a stronger financial foundation.
The company-owned restaurants will transfer to a buyer group led by the original Hooters founders, who aim to bring the brand back to its roots. Neil Kiefer and other members of the founder-led buyout team believe this franchise model will help the casual dining establishment compete better in today’s tough restaurant market.
The franchise group transition comes after years of challenges for Hooters of America, including rising labor costs and changing consumer preferences. Restaurant prices across the industry have climbed faster than other consumer prices, according to the Federal Reserve Bank of St.
Louis. The Texas court overseeing the Chapter 11 bankruptcy will need to approve all final plans before the full franchise conversion takes place. During this process, the orange shorts and tank tops that made the chain famous will remain, though some rebranding efforts may follow.
Background and Speculation
Hooters has closed many restaurants in the past year while trying to change its image and cut costs in a tough market for casual dining spots. Read on to learn what might happen next for this famous wing chain.
Previous restaurant closures and restructuring efforts
Hooters of America closed dozens of locations last summer as part of major restructuring efforts. These shutdowns hit several markets across the country, with the casual dining chain trying to cut costs amid rising labor expenses and changing consumer habits.
The restaurant chain faced tough choices as food prices climbed faster than general consumer prices, according to data from the Federal Reserve Bank of St. Louis. Private equity ownership added pressure to improve financial results, pushing the company to trim its corporate-owned restaurant count before the bankruptcy filing.
Plans for rebranding and discontinuation of promotions
Hooters faces major changes as part of its financial recovery plan. Neil Kiefer, CEO of the company that runs original Hooters locations, announced a “re-Hooterization” effort to refresh the brand’s image.
This rebranding aims to bring the restaurant chain “back to its roots” while focusing on its core offerings of chicken wings and casual dining experience. The company will stop its “bikini nights” promotion, which many industry experts view as an attempt to appeal to a broader customer base beyond its traditional clientele.
The rebranding strategy comes as many casual dining restaurants struggle with high labor costs and changing consumer preferences. Restaurant prices have climbed faster than general consumer prices according to Federal Reserve Bank of St.
Louis data. These financial pressures have forced several well-known chains like Red Lobster and TGI Fridays to rethink their business models or seek bankruptcy protection. The company hopes these changes will create a stronger financial foundation as it moves through the bankruptcy process.
Conclusion
Hooters faces a major shift as bankruptcy proceedings unfold in Texas courts. The restaurant chain plans to keep doors open while original founders acquire company-owned locations.
Most diners won’t notice changes during this transition period. All restaurants will move to franchise operations after the bankruptcy process ends. This marks a return to the chain’s roots amid rising food costs and changing consumer tastes.
The casual dining industry continues to face challenges that have affected other chains like Red Lobster and TGI Fridays. Financial experts will watch closely as this well-known brand works to build a stronger future on familiar orange-and-white foundations.
