Hooters of America is getting ready to file for bankruptcy in the coming months, according to a Bloomberg report.
The 293-unit casual-dining chain operator has hired law firm Ropes & Gray to prepare a filing, though the plans are not final, Bloomberg said, citing sources with knowledge of the situation.
There have been signs that the chain, known for its chicken wings and scantily clad waitresses, has been struggling financially. In September, credit rating agency KBRA downgraded two tranches of securities issued by Hooters, citing revenue declines at its restaurants.
Hooters has also been falling behind on its bills. In 2024, the company took about 4 times longer to pay its vendors than the average restaurant chain, according to data from credit report company Creditsafe. More than 20% of Hooters’ outstanding bills were over 90 days overdue last year, Creditsafe found.
In June, it closed a number of underperforming restaurants across the country, and had reportedly hired restructuring advisors to weigh its options.
The Atlanta-based chain has been struggling for years with sales declines and restaurant closures. From 2018 to 2023, U.S. systemwide sales at the Atlanta-based chain declined nearly 15%, and its domestic footprint shrunk by 12%, according to Technomic data.
Its problems reflect a broader struggle for the bar and grill segment, which has been hit hard by rising costs and a shift in consumer demand toward quick-service and fast-casual concepts.
If it files for bankruptcy, Hooters would join dozens of other restaurant companies to have done so over the past year. Those include Red Lobster, TGI Fridays, Buca di Beppo and Rubio’s Coastal Grill.
Hooters had not responded to a request for comment by publication time.
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