Hooters’ parent company, HOA Restaurant Group, filed for Chapter 11 bankruptcy protection, but that doesn’t mean the company’s restaurants will be busted. Instead, the Hooters brand will remain through a deal with franchisees. This will have the owners collected together under Hooters Inc. to operate the restaurant chain.
The owners of Hooters Inc. include the company’s founders and other franchisees with locations that perform well. Together, they will operate 100 of the chain’s locations. Hooters will also allow other stores run by franchisees to continue operations, avoiding a reduction in the chain’s size.
Will Hooters Survive After Its Bankruptcy?
While the controversial restaurant chain with its skimpy “Hooters Girls” has avoided closure this time, there’s no guarantee it can turn around its business. The chain has struggled to attract consumers as its gimmick falls out of fashion with the general public.
Hooters also has to contend with other fast casual chains and pubs that better appeal to a general audience rather than its niche clientele. This is a recurring pattern lately as retailers and restaurants that don’t appeal to the general public with necessary goods and services struggle as inflation and economic uncertainty cut luxury spending.
Better Ways to Spend Money Than Hooters
First off, investors can’t invest in Hooters as it’s a private company. Instead, they should turn their interest to restaurant chains worth their time and money. According to analysts, Chipotle (CMG) and Red Robin Gourmet Burgers (RRGB) are two chains with consensus Strong Buy ratings. RRGB offers a potential 168.12% upside, while CMG’s possible upside is 30.64%. Other restaurant stocks with Moderate Buy ratings include Shake Shack (SHAK), McDonald’s (MCD), and Darden Restaurants (DRI). Of these, SHAK offers the best upside potential at 43.67%.
