What Type of Bankruptcy Did Hooters File? | Chapter 11 Explained
Hooters filed for Chapter 11 bankruptcy in March 2025. Learn what Chapter 11 means, why Hooters chose it, how it impacts restaurants, and what this...
Hooters, the popular American restaurant chain famous for its wings and sports-bar vibe, surprised many people when it filed for bankruptcy in March 2025. Immediately, fans started asking: Does this mean Hooters is closing down?
The Direct Answer: Chapter 11 Bankruptcy
Hooters officially filed for Chapter 11 bankruptcy protection on March 31, 2025.
Unlike Chapter 7 bankruptcy, which means complete shutdown, Chapter 11 allows a business to reorganize its debts and operations while staying open. This gives Hooters the legal protection it needs to deal with its financial problems without closing its restaurants.
What Is Chapter 11 Bankruptcy?
To understand this better, let’s compare it with another type of bankruptcy.
Chapter 7 Bankruptcy
Why Did Hooters Choose Chapter 11?
Heavy Debt
The company was carrying around $376 million in debt. Paying this off without restructuring was almost impossible.
Franchise Shift
Hooters wanted to move away from operating company-owned restaurants. Instead, it plans to focus on a franchise model, where independent owners manage most locations.
Restructuring Agreement
The company signed a Restructuring Support Agreement (RSA) with a buyer group linked to its founders and franchisees. This deal allows them to purchase many company-owned restaurants while keeping the brand alive.
Customer Confidence
By filing Chapter 11, Hooters shows customers and creditors that it is reorganizing, not disappearing.
What Happened After Filing?
Restaurant Closures
In June 2025, more than 30 company-owned Hooters restaurants closed permanently. This was part of the restructuring plan to cut costs.
Franchise Takeover
Over 100 restaurants are expected to be taken over by franchise owners. This shift makes the business lighter and more stable.
Business as Usual
Most Hooters restaurants remained open. Customers can still enjoy the same wings, drinks, and atmosphere they expect.
Timeline
The bankruptcy process is expected to last 90 to 120 days, after which Hooters plans to exit Chapter 11 as a stronger company.
What Does This Mean for Customers?
For most customers in the U.S., not much has changed.
Why Chapter 11 Is Good for Hooters’ Future
Many big companies in the U.S. have used Chapter 11 to survive—such as airlines, car makers, and retail chains.
For Hooters, this step allows it to:
Legal Disclaimer
This article is provided for informational purposes only and does not constitute legal advice. Bankruptcy laws can be complex, and each case is unique. If you are facing bankruptcy or financial challenges, you should consult with a qualified bankruptcy attorney or legal professional licensed in your state.
The real answer lies in the type of bankruptcy the company filed. Hooters filed for Chapter 11 bankruptcy, which is very different from liquidation or shutting down completely. Let’s break it down.
The Direct Answer: Chapter 11 Bankruptcy
Hooters officially filed for Chapter 11 bankruptcy protection on March 31, 2025.
Unlike Chapter 7 bankruptcy, which means complete shutdown, Chapter 11 allows a business to reorganize its debts and operations while staying open. This gives Hooters the legal protection it needs to deal with its financial problems without closing its restaurants.
What Is Chapter 11 Bankruptcy?
To understand this better, let’s compare it with another type of bankruptcy.
Chapter 7 Bankruptcy
- The company shuts down completely.
- Assets are sold (liquidated) to pay creditors.
- The business no longer operates.
- The company continues operating.
- Debt is reorganized under a court-approved plan.
- Businesses get time to restructure and find stability.
Why Did Hooters Choose Chapter 11?
Heavy Debt
The company was carrying around $376 million in debt. Paying this off without restructuring was almost impossible.
Franchise Shift
Hooters wanted to move away from operating company-owned restaurants. Instead, it plans to focus on a franchise model, where independent owners manage most locations.
Restructuring Agreement
The company signed a Restructuring Support Agreement (RSA) with a buyer group linked to its founders and franchisees. This deal allows them to purchase many company-owned restaurants while keeping the brand alive.
Customer Confidence
By filing Chapter 11, Hooters shows customers and creditors that it is reorganizing, not disappearing.
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What Happened After Filing?
Restaurant Closures
In June 2025, more than 30 company-owned Hooters restaurants closed permanently. This was part of the restructuring plan to cut costs.
Franchise Takeover
Over 100 restaurants are expected to be taken over by franchise owners. This shift makes the business lighter and more stable.
Business as Usual
Most Hooters restaurants remained open. Customers can still enjoy the same wings, drinks, and atmosphere they expect.
Timeline
The bankruptcy process is expected to last 90 to 120 days, after which Hooters plans to exit Chapter 11 as a stronger company.
What Does This Mean for Customers?
For most customers in the U.S., not much has changed.
- Restaurants are still open.
- The menu and dining experience remain the same.
- Gift cards and loyalty rewards are still valid.
- Only some locations closed, mostly company-owned outlets.
Why Chapter 11 Is Good for Hooters’ Future
Many big companies in the U.S. have used Chapter 11 to survive—such as airlines, car makers, and retail chains.
For Hooters, this step allows it to:
- Reduce massive debt.
- Focus on a franchise-driven future.
- Refresh its brand and attract new customers.
- Remain competitive in the casual dining industry.
Quick Recap: Hooters Bankruptcy
- What type of bankruptcy did Hooters file? – Chapter 11 (Reorganization)
- When was it filed? – March 31, 2025
- Debt amount? – About $376 million
- Does this mean Hooters is closing? – No, most restaurants remain open
- Why Chapter 11? – To restructure debt and move to a franchise model
- What’s next? – Expected to exit bankruptcy in 90–120 days
Conclusion
So, what type of bankruptcy did Hooters file? The answer is clear: Chapter 11 bankruptcy.
This type of bankruptcy gives Hooters the opportunity to reorganize its debt, sell some company-owned restaurants, and focus on a franchise model. While a few locations closed, most remain open, and the customer experience hasn’t changed.
Far from being the end, this bankruptcy could be the beginning of a stronger and more focused Hooters in the future.
So, what type of bankruptcy did Hooters file? The answer is clear: Chapter 11 bankruptcy.
This type of bankruptcy gives Hooters the opportunity to reorganize its debt, sell some company-owned restaurants, and focus on a franchise model. While a few locations closed, most remain open, and the customer experience hasn’t changed.
Far from being the end, this bankruptcy could be the beginning of a stronger and more focused Hooters in the future.
This article is provided for informational purposes only and does not constitute legal advice. Bankruptcy laws can be complex, and each case is unique. If you are facing bankruptcy or financial challenges, you should consult with a qualified bankruptcy attorney or legal professional licensed in your state.
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