In Buying Hooters, Franchisees Want to Bring Back Family Feel
Former franchisees aim to revitalize Hooters into a family-friendly dining experience once again.
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Hooters' new ownership group, led by co-founder Neil Kiefer, acquired Hooters of America from bankruptcy, aiming to restore its family-oriented roots. The deal involves around 150 locations and positions Kiefer's group to manage a significant share of the brand with plans to shift its marketing and operational strategies.
Why It Matters
This acquisition will likely influence territory availability as the new management seeks to redefine brand perception and consumer engagement, which could impact unit economics and franchisee performance across the system.
Hooters of America has been acquired by a group led by Neil Kiefer, co-founder of the brand and owner of HMC Hospitality Group, along with longtime operator Hoot Owl Restaurants. The acquisition, which took place out of bankruptcy, involves approximately 150 company-owned locations and aims to revitalize the brand's family-friendly image, which Kiefer believes was diminished by previous management strategies. This new ownership group controls about 70% of Hooters units, including more than two dozen locations operated by Hooters Inc., the largest franchisee in the system.
The deal involved complex negotiations to manage around $375 million in senior debt, ensuring that equity shareholders were wiped out while allowing debtholders to retain their investments. Kiefer expressed his commitment to revamping Hooters, stating, “When we first started this, Hooters was a place to come off the beach, hang out and enjoy good food and have a drink,” indicating a desire to return to the brand's roots.
This buyout not only gives Kiefer and his partners control over the franchisor but also allows them to oversee advertising and purchasing operations directly. The goal is to stabilize the brand in light of past challenges, including unit closures and ownership disputes. As Kiefer moves forward with the new vision, franchisees may anticipate changes in royalty structures, support, and overall brand direction geared towards restoring a family-oriented atmosphere.
