Hooters of America (HOA) has begun the unexpected closure of more than 30 company-owned restaurants across a dozen states, despite earlier assurances that it would not close locations during its bankruptcy proceedings.
The company described the closures as a “difficult decision” on 4 June 2025.
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In April, HOA filed for bankruptcy in the state of Texas, intending to address its $376m debt by selling all its corporate-owned restaurants to a buyer group.
The buyer group, which includes Hooters Inc and Hoot Owl Restaurants LLC, has confirmed that the restructuring transactions intended to transfer ownership of more than 100 HOA-owned restaurants are still on track.
The closures were anticipated by both HOA and the buyer group as a necessary step before finalising the transaction.
They expect around 200 domestic and 60 international Hooters restaurants to remain operational, contributing to an estimated $700m in systemwide sales by the time the deal closes in August 2025.
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By GlobalDataUpon completion, the buyer group plans to operate approximately 130 Hooters restaurants – around 65% of the domestic locations.
The group consists of existing Hooters franchisees, including the original founders, who currently own and manage more than 30% of the domestic franchised locations.
These operators also run 14 of the 30 highest-grossing Hooters restaurants, with average revenues in 2024 more than double those of the HOA-owned restaurants.
The transfer of more than 100 company-owned restaurants to this experienced group is expected to simplify HOA’s business and enhance the future success of these locations.
All existing Hooters franchises, including international outlets, will continue to be run by the company’s franchise and license partners.
Negotiations in April set the terms for acquiring the HOA-owned restaurants and a management agreement where Hooters Brand Management (HBM), owned by the Buyer Group and others familiar with the brand, will oversee most of the franchise support functions for HOA.
The definitive documentation for this agreement is being finalised for presentation to the bankruptcy court shortly.
HBM has also negotiated to take over most of HOA’s franchise support obligations, including management of the national ad fund, the central purchasing organisation, franchise development and support, and other key functions.
The buyer group aims to reinstate the original principles that propelled Hooters’ initial success, including some classic recipes and the original Hooters Girls uniforms, and to invest significantly in the restaurants to meet the high standards of its current Hooters’ locations.
North Point Mergers & Acquisitions represents the buyer group, with Morrison & Foerster as its legal counsel.
