Hooters founders lead $700m turnaround with buyout of 100+ restaurants from Hooters of America

Hooters Inc., the Florida-based originator of the Hooters restaurant brand, and Hoot Owl Restaurants LLC have reaffirmed plans to finalize the acquisition of over 100 Hooters of America (HOA) locations by August 2025. The transaction forms part of a larger restructuring effort aimed at repositioning the iconic restaurant chain through strategic operational realignment.

The announcement was made in response to recent news of store closures across the Hooters of America network. Both Hooters Inc. and Hoot Owl Restaurants LLC (collectively known as the Buyer Group) stated that the closures had been anticipated and built into the terms of the pending transaction. Once finalized, the deal will result in the Buyer Group controlling roughly 130 domestic restaurants, representing nearly 65% of the Hooters U.S. footprint.

Systemwide, Hooters expects to maintain around 200 domestic and 60 international restaurants post-closing, with a projected USD 700 million in sales across the network. This structural transformation is viewed as a significant inflection point for the brand, which has faced competitive pressure and operational inefficiencies in recent years.

Why is Hooters of America selling over 100 locations?

Founded in 1983, Hooters of America once operated as the flagship corporate engine for the brand’s global network. However, over time, franchisees and external operators began to outperform company-owned locations, both operationally and financially. By 2024, data from internal performance reviews showed that franchise-run units generated nearly twice the average revenue per restaurant compared to HOA-owned units.

This discrepancy formed the basis for an internal assessment that ultimately led HOA to divest the majority of its corporate-owned stores. The Buyer Group—comprising Hooters Inc., Hoot Owl Restaurants LLC, and other long-term franchisees—already manages over 30% of domestic Hooters franchises. Together, they operate 14 of the top 30 highest-performing Hooters restaurants by volume in the United States.

By transferring control of more than 100 locations to these veteran operators, Hooters of America aims to simplify its corporate structure while ensuring that its core assets are placed in the hands of proven, high-performing stakeholders.

What will change under Hooters Inc. and Hoot Owl leadership?

Following the acquisition, the Buyer Group intends to implement a series of changes designed to return the Hooters brand to its founding principles. These include a return to legacy recipes, original staff uniforms, and a reinvestment in restaurant-level infrastructure. According to Neil Kiefer, CEO of Hooters Inc., the revitalization strategy will be supported by substantial financial investment aimed at improving quality and consistency across all acquired locations.

A new entity, Hooters Brand Management LLC (HBM), will be created to oversee most franchise support operations, including advertising, purchasing, and franchise development. HBM will also handle functions traditionally maintained by HOA’s central office. The creation of HBM is seen as a key step in decentralizing the management structure and handing more autonomy to experienced franchisee groups.

This operational shift aligns with broader trends in the U.S. hospitality sector, where franchise-heavy models have outperformed vertically integrated counterparts in post-pandemic recovery periods. Hooters Inc. and Hoot Owl Restaurants LLC believe that the streamlined model will improve agility, profitability, and guest satisfaction.

What are analysts and institutional stakeholders expecting?

Although Hooters of America is not publicly traded, market observers have noted that the company’s moves mirror those made by larger hospitality players looking to stabilize earnings through asset-light franchising models. The success of operators like Inspire Brands and Yum! Brands in deploying franchise-first strategies has contributed to investor enthusiasm around similar restructurings in mid-tier restaurant chains.

Industry analysts have pointed to the significant revenue gap between HOA-owned and franchisee-owned stores as evidence that decentralization could lead to operational gains. With the Buyer Group already demonstrating superior performance across their existing portfolio, many believe the move will not only stabilize the chain but could also restore Hooters to profitability in competitive urban markets.

From a private equity and M&A perspective, the transaction also signals renewed interest in brand rehabilitation through operator-led buyouts. North Point Mergers & Acquisitions is advising the Buyer Group, while legal counsel is being provided by Morrison & Foerster LLP.

How will the Hooters network evolve after the acquisition?

As part of the transition plan, Hooters expects to retain a combined total of approximately 260 locations globally, with about 200 in the United States and 60 operating internationally through franchise partners. All international locations will continue to be run independently under existing franchise and licensing agreements.

The Buyer Group emphasized that existing staff at the acquired restaurants will be retained wherever possible. According to internal statements, frontline workers in the affected stores have been key contributors to operational continuity during the transition process.

The restructuring is expected to yield a simplified yet efficient operating structure. Hooters Inc. and Hoot Owl Restaurants LLC plan to prioritize quality control, customer engagement, and infrastructure upgrades across the newly acquired footprint. These efforts include kitchen renovations, digital ordering enhancements, and reintroducing local marketing initiatives tailored to each regional market.

What does this mean for the future of the Hooters brand?

With an anticipated closing date set for August 2025, the next few months will be critical for ensuring a smooth handover of management responsibilities and franchise support services. The Buyer Group is finalizing the definitive transaction documentation, which will soon be presented to the bankruptcy court for formal approval.

Long-term, Hooters Inc. and Hoot Owl Restaurants LLC are optimistic about returning the brand to its peak performance phase of the early 2000s. Leveraging historical brand equity, enhanced operational capabilities, and a refocus on in-restaurant experience, the group plans to usher in what it calls “the next chapter of Hooters.”

As consumer dining trends continue to shift toward experiential and nostalgia-driven venues, the reimagined Hooters network may stand to benefit from increased foot traffic and brand re-engagement. Several former franchisees and early investors have already expressed interest in participating in the turnaround, hinting at a broader industry appetite for distressed-brand revivals under experienced leadership.

August 2025 remains a pivotal milestone

If the August 2025 closing remains on track, Hooters will complete one of the largest middle-market restaurant M&A deals of the year. More importantly, it could serve as a roadmap for other legacy dining brands aiming to revive growth through operational decentralization and franchise reinvestment.

The combined operational depth of Hooters Inc. and Hoot Owl Restaurants LLC, paired with renewed focus on core branding and quality execution, marks a rare case of brand founders reclaiming control to reposition their legacy offering for modern dining preferences.

Future developments will hinge on final court approvals, financing milestones, and early performance metrics post-transition. But with over 100 restaurants set to transfer hands and a comprehensive support infrastructure in place, stakeholders are watching closely as one of America’s most recognizable restaurant brands navigates its most ambitious turnaround effort in decades.