Hooters Goes Bankrupt as Founders Plot a Bold Comeback to Rescue the Brand

That move mirrors a broader trend in the restaurant industry as casual-dining giants scramble to stay afloat amid turbulent economic conditions. Brands such as Red Lobster and BurgerFi have also filed for bankruptcy protection in recent months, citing rising labor costs, increased food prices, and shifting consumer habits.

The bankruptcy filing comes after a year of financial turbulence and public relations headwinds for Hooters. The chain reportedly shuttered dozens of restaurants in 2023 and has faced a number of lawsuits, including allegations of racialand gender discrimination. Yet, despite these challenges, the company insists that its core brand—and its future—remain viable.

Under the terms of the restructuring support agreement, the company is seeking permission to access $40 million in debtor-in-possession financing, including $35 million in new funds. These funds will allow Hooters to continue operations during the court-supervised reorganization.

Legal counsel for Hooters includes Holland N. O’Neil of Foley & Lardner LLP and a team from Ropes & Gray LLPled by Chris L. Dickerson, Patricia C. Lynch, Brett A. Pearlman, and Rahmon J. Brown. Investment banking and financial advising are being handled by SOLIC Capital Advisors and Accordion Partners, respectively.