Financing

Hooters kicks off U.S. growth push with free royalties for franchisees

The chain is offering new operators 40 weeks of free royalties as it celebrates its 40th birthday.
Hooters exterior
Hooters is looking to enter new markets. / Photo: Shutterstock

Hooters is turning 40, and it wants to celebrate by opening more restaurants. 

The chain known for chicken wings and scantily clad waitresses has seen its U.S. unit count shrink in recent years. But its restaurants have been doing well recently, said Chief Development Officer Michael Arrowsmith, and it is ready to start growing again.

“We’re on a tear in terms of our performance,” said Arrowsmith, who joined franchisor Hooters of America in June. “We’re excited about our brand and growing our brand.” 

To help speed that growth—as well as draw some attention to its big anniversary—Hooters is offering new franchisees 40 weeks of free royalties if they sign up this year.

It’s specifically looking for operators who own other restaurants and are interested in diversifying. Arrowsmith said Hooters’ simple menu of wings, burgers and salads makes it easy and cost-effective to operate relative to other full-service concepts. He also touted its flexible real estate strategy as a benefit for operators.

“We’re a brand that can work in a lot of places,” Arrowsmith said. “There’s not a lot of rhyme or reason to larger locations outperforming smaller locations outperforming second-generation spaces.”

Still, the emphasis will be on finding operators for Hooters' full-service restaurants and not so much its quick-service spinoff, Hoots, he said.

Hooters has restaurants in 34 states, with a large presence in Texas and Florida. With this new growth push, it’s looking to stake out fresh territory, such as Western Pennsylvania and eastern Ohio. 

Arrowsmith did not provide a target for how many stores Hooters hopes to add to its pipeline in the near-term. It will instead focus on finding good, experienced operators. “We’re not chasing a number,” he said. 

The pandemic was hard on Atlanta-based Hooters, as it was for many full-service brands. From 2020 to 2021, the chain closed 23 U.S. units, or about 7% of its footprint, according to data from Technomic. It ended 2021 with 303 domestic restaurants, about a third of which were franchised. 

Despite those struggles, it has apparently benefited from pent-up demand as pandemic restrictions eased. Same-store sales have increased each of the past three years, Arrowsmith said, and customers have been eager to return to its restaurants. 

“Post-COVID is really more people coming into the stores and less reliance on to-go and less reliance on off-premise eating,” he said.

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