Summary:
Hooters of America enters into a Restructuring Support Agreement to facilitate ownership changes.
The company files for chapter 11 bankruptcy aiming to emerge in 90-120 days.
All Hooters locations will transition to franchisee ownership post-restructuring.
Hooters seeks $40 million in DIP financing to support operations during the process.
The brand remains committed to exceptional service and maintaining its community presence.
Hooters Stays Open for Business
Hooters of America, LLC, the iconic brand known for its guest-obsessed hospitality and world-famous wings, is taking significant steps to ensure its legacy continues. The company has announced a Restructuring Support Agreement (RSA) with near-unanimous support from its key stakeholders to facilitate a sale transaction for its company-owned locations.
New Ownership Model
The RSA includes an agreement in principle with a Buyer Group composed of experienced current franchisees, including the original founders of Hooters. This group currently manages over 30% of domestic Hooters locations, including many of the highest-volume restaurants.
Chapter 11 Bankruptcy Process
To support this transition, Hooters has voluntarily filed for chapter 11 bankruptcy in the Northern District of Texas, aiming to emerge from this process within 90-120 days. CEO Sal Melilli reassured that the beloved restaurants will remain open and continue delivering the exceptional experience customers expect.
Focus on Franchise Operations
The restructuring will transition all Hooters locations to be franchisee-owned, allowing the company to focus on its strongest assets. The existing franchise operations, including those outside the U.S., will not be affected by this process.
Financial Support and Future Plans
Hooters is seeking $40 million in debtor-in-possession (DIP) financing to ensure smooth operations during the bankruptcy proceedings. This funding will provide the liquidity necessary to keep the business running effectively.
Commitment to Customers and Community
The leadership emphasizes their commitment to restoring the brand's roots and improving operational efficiency, ensuring that Hooters remains a staple in the community with its exceptional service and delicious food. For those interested in updates regarding the chapter 11 process, Hooters has launched a dedicated website for stakeholders.
About Hooters of America
Hooters of America, founded in 1983, is recognized for its world-famous chicken wings and one-of-a-kind hospitality. The company continues to thrive through its franchise model, adapting to market demands while maintaining its unique brand identity.
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