America’s most famous ‘breastaurant’ might be heading for a financial bust.
Hooters, the chain best known for its wings, beer, and barely-there uniforms, is reportedly looking to strut into Chapter 11 bankruptcy within the next two months, according to Bloomberg, and has enlisted heavyweight law firm Ropes & Gray to help salvage its best assets.
Like fellow struggling chains Red Lobster and Olive Garden, Hooters is citing the usual suspects for its financial woes: soaring rent, skyrocketing food costs, and a customer base that’s tightening its purse strings for a night out.
The economic squeeze — thanks to post-pandemic inflation and rising minimum wage laws in states like California — has left many casual dining chains feeling overcooked, the report said.
The 42-year-old chain, famous for its spicy wings and even spicier marketing, has been battling a mountain of debt, reportedly to the tune of USD$300 million.
In a bid to stop the bleeding, Hooters shut down 40 ‘underperforming’ locations last summer, with Florida, Texas, Kentucky, Rhode Island, and Virginia all seeing closures.
Its last Calgary location closed nine years ago, in 2014, while a location in West Edmonton Mall closed during the COVID-19 pandemic. It presently has four Canadian locations; one each in Winnipeg and Saskatoon and two in Toronto.
After the news of Hooters’ struggles broke, Conservative commentator Nick Adams on Twitter ("X") blamed political correctness and former president Joe Biden for the iconic chain’s imminent demise.
Hooters, owned by private equity since 2019, has liquid ‘assets’ — such as property, brand rights, and franchise fees — backing its debt, meaning lenders could force sales if the bills remain unpaid. Chapter 11, however, would allow the chain to restructure and renegotiate its leases and loans, just as Red Lobster did when it emerged from bankruptcy last September after closing 100 locations.
Despite the financial turmoil, Hooters’ leadership insists the brand is still “highly resilient and relevant.” That’s why the company is banking on its supermarket range of Hooters-branded food items like frozen wings and sauces and seasonings to keep its name alive in kitchens, if not in restaurants.
Meanwhile, the American casual dining sector has been taking hit after hit, with Applebee’s, TGI Fridays, and Boston Market all shutting down locations.
Likewise, bankruptcies in Canada have soared according to the Restaurants Canada trade association.
Even fast-food joints aren’t safe. In California, where the minimum wage for fast food workers jumped to $20 an hour, trade groups report more than 10,000 jobs were lost in 2024 alone.
For Hooters, the writing had been on the wall. Sales had been slipping for years, dropping nearly 15% between 2018 and 2023. Meanwhile, industry insiders say its struggles reflect broader consumer shifts — bar-and-grill dining is out, and quick-service or fast-casual spots are in.
Analysts said if Hooters can pull off a Red Lobster-style comeback, it may yet live to serve another day. But with fewer customers willing to splurge on wings and beer, and economic pressures still stacking up, the chain will need more than just its iconic orange shorts to keep things bouncing back.
