How Hooters’ founders plan to fix the brand

The founder-led Hooters stores have outperformed the rest of the chain. | Photo courtesy of Hooters Inc.

They do things a bit differently at the Hooters down in Clearwater, Florida.

There, in the beachside town where the breastaurant chain was born, its famed waitresses’ shorts are a little longer, its chicken wing sauce a little more flavorful, and its business a bit brisker than at most other Hooters outlets across the U.S.

That’s because this location, along with 21 others in Florida and Chicago, is still owned and operated by the six men that opened the first Hooters in 1983. They have kept the brand’s principles and recipes largely unchanged since then, to great success. And they are about to bring their playbook to a lot more Hooters.

The group, known officially as Hooters Inc., has a deal to take over more than 100 additional locations from Hooters of America (HOA), the entity that controls the bulk of the Hooters in the U.S. Atlanta-based HOA put its roughly 200 company-owned locations into Chapter 11 bankruptcy earlier this week.

The transaction will make Hooters 100% franchisee-operated, with Hooters Inc. providing most of the franchise support functions for the system.

Hooters Inc. and HOA split back in the early 2000s, when the founder-led group sold the Hooters trademark to HOA, but hung on to the restaurants it operated. 

Their paths have diverged since. Hooters Inc. is coming off a record sales year in 2024. It has several new locations under development and is planning to enter the Las Vegas market soon. Its restaurants generate average unit volumes of about $4.6 million per year, and up to $5 million in the Chicago market, said CEO Neil Kiefer.

HOA, meanwhile, has struggled for years under a series of private-equity owners that had little experience with the brand. In 2019, it was sold by HIG Capital to Nord Bay and TriArtisan Capital Advisors, which would go on to amass $376 million in debt to finance the deal. 

Between then and 2024, nearly a quarter of HOA’s restaurants closed, including 48 last year, and sales declined by more than 30%, according to Technomic data. Average unit volumes at HOA-owned Hooters are down to about $2.3 million, Kiefer said.

In its bankruptcy filing, HOA blamed inflation, “industry headwinds” and substantial debt for its troubles.

Kiefer, who has been with Hooters Inc. for over 30 years, has a long list of priorities he wants to tackle at the HOA locations. But in general, they all point toward the same goal: making these wayward Hooters more like the original. 

“I think the ones that have made the mistake, they oversexualized the concept,” Keifer said in an interview. “[Hooters] is not about that really. It’s a beach hangout place.”

He pointed to waitresses’ shorts as a prime example. The original uniforms, and those still worn at Hooters Inc. locations, featured a style of athletic shorts that was popular with both men and women during the jogging craze of the 1980s. 

In 2021, HOA implemented a more risque cut, despite protests from Hooters Inc. The move drew backlash from employees and franchisees, and HOA later said the new look was optional. But to Kiefer, it was a sign of how the brand’s values had drifted. 

“Making the shorts more revealing and the uniforms more revealing was clearly against what the brand stands for, and that caused a declination in their traffic from a more diverse audience to just more men,” said Kiefer, who noted that Hooters Inc.’s demographics range from 20% to 50% female. “Now we have to work to right the ships, straighten it out and resurrect it in those locations where it’s gone bad.”

Besides new uniforms, Hooters Inc. will update the menu, and particularly the Buffalo-style wing sauce, which is used in about 65% of its items. It will replace HOA’s existing sauce with the original recipe, which contains butter and tastes better, Kiefer said. “It’s a very key ingredient of our success,” he said. 

Over the next two years, it will also take on the larger project of repairing and improving the restaurants themselves, a job that was largely neglected under their current owners, Kiefer said.

Longer-term, he wants to get Hooters more involved in the communities where it operates. That could mean making donations to local institutions or charities or sponsoring the local Little League team. 

“That’s one of our cornerstones, to give back, and it has been that way for years,” Kiefer said.

It all amounts to a very big project for the relatively tiny Hooters Inc. Adding 100-plus locations will more than quadruple its restaurant footprint, and its to-do list is sure to grow by even larger multiples. 

In terms of paying for it all, Kiefer said Hooters Inc. has little to no debt, strong cash flow and access to financing. And it won’t try to do everything at once. 

In the near term, it needs to get customers back into those HOA restaurants. The key to that will be executing the way Hooters Inc. locations have been for years, Kiefer said. 

“A lot of it is working from inside out,” he said. “You don’t come in with a new marketing campaign right away. You get what’s inside the four walls right.”

Accomplishing that will be as much of an art as it is a science. “It’s hard to describe the secret sauce,” Kiefer said. “It’s instincts and years of running it. Frankly, [it’s] how you treat other people.” 

And he believes that getting the brand out from under private equity and into the hands of experienced franchisees will help in that regard.

“Now our brand will be owned always by owners of Hooters restaurants, that aren’t from private equity, that aren’t from outside, so we’re gonna have a collaborative effort of running the brand,” he said. 

Kiefer noted that Hooters Inc. likely won’t take over the restaurants until August or September, after the bankruptcy process is complete.

“It’s going to be a process, but we’re excited,” Kiefer said. “We’ve watched the decline of it for a couple of years now, and it’s been a helpless, frustrating position for us to be in. So we’re excited to do it.”

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