Hooters Closes Over 30 Company-Owned Locations Amid Bankruptcy, Shifts to Franchise-Only Model

Hooters Closes Over 30 Corporate Locations Amid Strategic Franchise Shift

Hooters of America has permanently closed over 30 company-owned restaurants across the U.S. as it undergoes a major financial and operational restructuring. The closures come as part of the company’s Chapter 11 bankruptcy proceedings, filed in March 2025, aimed at reducing debt and transitioning to a fully franchised business model.

The Atlanta-based restaurant chain, known for its wings and sports bar atmosphere, has shuttered multiple locations in key markets including Texas, Florida, Georgia, and North Carolina. In Texas alone, restaurants in Houston, San Marcos, and Grapevine were closed—representing a notable reduction in the brand’s Sun Belt footprint.

Pivoting to a Franchise-Only Model

As part of its court-approved reorganization plan, Hooters will sell all remaining company-owned locations to franchise groups affiliated with the brand’s original founders. The move is designed to eliminate roughly $376 million in debt and position the company for long-term sustainability under a leaner, more scalable structure.

Despite the closures, the brand maintains a sizable presence through its existing network of approximately 200 franchised locations in the U.S. and 60 internationally. Leadership stated that the recent closures are part of a necessary rebalance as the company focuses on franchising and refreshing its customer experience.

Industry Pressures and Real Estate Impacts

Hooters’ bankruptcy and closures reflect larger trends affecting the casual dining sector, where rising costs, changing consumer preferences, and heavy debt loads have impacted major players. Brands like Red Lobster, TGI Fridays, and others have also announced large-scale closures or bankruptcy proceedings in 2025.

The shuttered Hooters sites—many of which are large-format restaurant spaces in prime retail corridors—may present new opportunities for landlords and retail investors looking to reposition or re-lease second-generation restaurant space.