Who Gives a Hoot?

Ward Clark at Hat Hair, that's who, with the sad news of the week, Hooters Seeking Uplift Via Filing for Bankruptcy

Restaurants generally operate on narrow financial markets and have shockingly high failure rates. Foodservice in general is one of the riskiest small business models in the world. My father-in-law ran cafeterias for almost 60 years until he finally retired a few months before his 80th birthday, and he has told me many times how narrow the margins are in that game.

But when you have a business model that specializes in chicken wings, beer, and has an absolute lock on the 21-35 BroDude demographic - a model that hires as servers pretty, young women and has them in low-cut t-shirts and short shorts - well, how could you possibly mess that up?

Georgia's Dad Vince, a lifetime restauranteur and bartender, also warned his children (and by extension their spouses) from getting into the food and drink business.

But here we are, with the famous Hooters chain considering bankruptcy due to a debt crisis:

The casual dining chain is working with law firm Ropes & Gray to ready a filing, said the people, who added the plans are not final and asked not to be identified discussing private preparations. The court process would likely begin within the next two months, the people said.

The law firm they have retained reportedly has a good reputation, which may well help the famous chain; a little uplift can go a long way. Ropes & Gray may be able to bust a move in a well-structured bankruptcy settlement:

Hooters has faced liquidity issues as foot traffic has declined and has shuttered several locations. The chain sold about $300 million in asset-backed bonds in 2021, according to data compiled by Bloomberg.

 

It's hard for me to believe that foot traffic has declined, but then, it's been many years since I set foot in a Hooters. It's not that I have any objection to the chain or its operating practices; I don't. It's just that there are no Hooters out in the Valley, so the opportunity isn't there. However, I do fully support the right of any business to stay abreast of cultural trends, and style their practices accordingly. That's what Hooters sure seems to have done; as I mentioned, they aimed at BroDudes and for many years they had a lock on that market.

Let's hope that Hooters survives this, so they can go on offering great chicken wings, cold beer, and... ample scenery. But food service is a harsh mistress. With a bit of luck and some restructuring, maybe Hooters can bounce back.

I can honestly say I've never been to a Hooters; one has never been convenient, but it seems like a solid business model.  Are they a casualty of COVID? If so, perhaps we should credit Joe Biden.

The Wombat has Rule 5 Sunday: Denim on the Beach up and garnering clicks at the Other McCain.