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It's the first afternoon of March Madness and the original Hooters restaurant in Clearwater, Florida, is buzzing.
There are plenty of men enjoying the hoops on TV in the bar area, unsurprising for a chain that has gained - and nurtured - a reputation for catering to the id of the American male.
But in a booth away from the din, Sherrie Lipply, 67, and her friend Karen Stevenson, 61, who's just flown in from Indianapolis, are waiting for two plates of wings. Eating at Hooters is a tradition for Lipply when she's hosting out-of-towners.
"It's because of the atmosphere," she said. "I see as many women here as men sometimes."
Indeed, at this restaurant and one nearby in Tampa - despite the air of testosterone-charged lasciviousness that the Hooters brand and its very name conjures - mixed groups of men and women and a few scattered families with kids made for a varied demographic of customers that afternoon.
The ability of those locations, among 22 still owned by the local men who founded the brand in 1983, to draw a crowd beyond what might be considered a core clientele underpins a potential plan taking shape to save the sputtering chain. If successful, the same Florida founders who sold off the Hooters brand over two decades ago will retake control after the company undergoes a spin through bankruptcy.
Their pitch began last year, as the latest private equity owners of Hooters of America - the corporate entity that now owns the brand - shuttered locations and struggled to manage a roughly $350 million debt load. Neil Kiefer, chief executive officer of the founder-owned unit, HMC Hospitality Group, saw a way to turn things around: Take charge and apply what has worked for them in their restaurants in Florida and Illinois to the brand nationwide.
"I'm calling it a re-Hooterization," Kiefer, seated at a table at the Clearwater location as the Brigham Young and Virginia Commonwealth men's basketball teams faced off in the background, said in an interview.
What hurt the brand, as the founders see it, were decisions by its private equity overlords that took it away from its roots as a beachy destination offering good food and good service that was also family-friendly. Helping crystallize that view: a 2021 decision by Hooters of America to introduce new waitress uniforms that looked more like underwear than the retro jogging shorts the original Hooters referenced, along with theme nights where servers wore only bikinis.
"You go to some parts of the country and people say, ‘Oh I could never go to Hooters, my wife would kill me," ' Kiefer said. "That's depressing to us. We want to change that."
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Managing the fine line between edgy and family-friendly is part of their secret sauce. And the current era may work in the company's favor as it seeks to stabilize the business nationwide. With the playbook for mainstream American culture undergoing a broad rewrite, more customers may be willing to overlook the risqué association Hooters carries with it in some regions of the country, especially if it delivers on the experience.
"There are so many opportunities now for ‘eatertainment,'" said Aaron Allen, a restaurant industry analyst with his own consulting firm and over 30 years of advisory experience. Speaking broadly about the sector, Allen cited new dining chains with features like pickleball and golf among attention rivals for themed restaurants like Hooters. "For a business to be successful and sustainable, it helps to appeal to more than just men."
Hooters, of course, was battered by the pandemic like the rest of the industry, and is contending with the same pressures that pushed casual-dining chains like Red Lobster and TGI Friday's into bankruptcy in 2024. Elevated inflation eroded Americans' willingness to dine out, and for years now people have been shifting toward speedier and cheaper options. In the third quarter of 2024, same-store sales were down across the Hooters system on an annual basis, according to a person familiar with the results.
"What was novel in the 1980s is a legacy business today," said Mark Kalinowski, chief executive officer of restaurant-investing advisory firm Kalinowski Equity Research. "You've seen quick service and fast-casual taking market share from casual dining."
The turnaround plan would likely see HMC and other operators of Hooters franchises take over most of the US locations currently owned and run by Hooters of America, though some may close, according to people familiar with the discussions. HOA is now owned by Nord Bay Capital and TriArtisan Capital Advisors LLC. Those three companies didn't respond to requests for comment.
The end result is that HMC, should the plan go through, would help oversee the overall brand and advise franchisees on how to operate. The fix, according to Kiefer, boils down to three principles: good food, good service and regular reinvestment in the stores' operations, something he says has been lacking at the eateries owned by HOA.
"There's a noticeable difference," Kiefer said. "The food's different, the service is different - I hope to correct it all."
The 73-year-old plans to ensure all Hooters use fresher ingredients, like real butter for the buffalo sauce that's part of many popular menu items. He aims to train all staff using HMC's method, which he says includes beauty tips and guidelines on how to serve guests: Greet women first, always; and attend to tables within 60 seconds of a party's seating.
• Trademark Sale
The original founders of the brand sold the trademark around the turn of the millennium, but retained control of a core set of restaurants that now includes 11 in Florida and 11 in Illinois.
Hooters systemwide in the US shuttered more than 40 locations last year, according to food service consulting firm Technomic. That brought the total number in the US down to about 250 from a peak of 400 in 2008. Meanwhile, HMC has announced two new openings for 2025, Kiefer said.
Kiefer cites HMC's involvement in communities as key to its success in making the brand appeal to families. The company sponsors kids' sports events, donates around $1 million a year to local organizations and emphasizes volunteer service by the business and its servers, he says.
Meanwhile, the private equity owners of the HOA franchise pursued changes. They moved to juice returns, including through increasing what was already a troublesome debt load by adding $50 million in subordinated debt in 2022, according to people familiar with the operations.
The uniforms they introduced in 2021 in a bid to compete with new peers proved controversial. Across the country, franchisees and servers complained. Social media flooded with accounts of horrified ‘Hooters Girls' showing followers the thin polyester hot pants and threatening to quit. Most franchisees refused to adopt the new look, while company-owned stores did, according to some of the people familiar. But it helped bolster the view of the chain as veering further toward the risqué.
• Debt Complexity
One thing the founders never had to worry about: the kind of complex debt financing that's come to accompany private equity firms' involvement in such franchise deals. Now, it's one of the wrinkles in the planned restructuring.
Hooters of America issued about $300 million in asset-backed bonds in 2014, which were packaged as what's known as whole-business securitizations, through which a company pledges most of its assets, including franchise fees it's entitled to, as collateral. It refinanced the obligations in 2021.
The bankruptcy filing being considered by Hooters of America and its lawyers would see certain holders of its securitized debt team up with HMC to facilitate a change of control, said some of the people familiar. The debt holders would likely agree to restructure or roll their debt into securities with a later maturity and the same or similar collateral pools, the people familiar said.
The mission is not without complications. Any closures during the bankruptcy process would create a tricky calculus at a time when the owners will need to increase revenue to pay the debt.
And the taint of headlines about Chapter 11 is undeniable. For name brands, the process often means lost business as would-be customers assume the option has disappeared.
Here again, HMC may buck the trend. Traffic at some of its locations has only increased since news broke of the planned filing, according to Kiefer.
Meanwhile, though, the economic backdrop is hardly improving.
On March 4, On The Border Mexican Grill & Cantina became the latest restaurant chain to file for bankruptcy protection, citing surging labor costs, falling customer traffic and inflationary pressures as causes of its distress.