The original founders of Hooters are back, betting $40 million to rescue the iconic brand from the brink of bankruptcy.
In an era where legacy brands often fade into obscurity, Hooters stands as a testament to resilience and reinvention. The original founders of the iconic American restaurant chain, known for its chicken wings and distinctive orange shorts, are making a bold comeback. At the age of 73, Neil Kiefer, alongside co-founders Gil DiGiannantonio, Edward Droste, and Dennis Johnson, is leading a $40 million initiative to acquire 111 Hooters locations from bankruptcy. Their mission: to restore the brand to its roots and revitalize its financial standing.
The Fall: A Legacy at Risk
Founded in 1983 in Clearwater, Florida, Hooters quickly became more than just a restaurant—it was a cultural touchstone, a casual dining experience that blended approachable food with a playful, community-focused atmosphere. By 2009, the chain had expanded to 400 locations across the United States and abroad, achieving peak annual sales of $1.2 billion. Its combination of signature chicken wings, iconic orange shorts, and memorable branding had turned it into a recognizable and profitable enterprise.
However, the brand’s journey was far from linear. A series of ownership changes, strategic missteps, and a gradual drift from the original Hooters formula led to declining customer engagement. In 2019, private equity firms Nord Bay Capital and TriArtisan Capital Advisors acquired Hooters of America, aiming to stabilize operations and invest in growth. Despite these efforts, the chain struggled to maintain momentum. Sales fell to $986 million in 2019, and the challenges of the COVID-19 pandemic further depressed revenue to just over $700 million in 2020, highlighting vulnerabilities in the casual dining sector and the dangers of over-leveraged expansion.
By 2024, the situation had grown critical. Hooters of America was carrying $376 million in debt, and several dozen underperforming locations were shuttered across Florida, Kentucky, Rhode Island, Texas, and Virginia. The combination of declining sales, mounting debt, and eroding customer loyalty culminated in a March 2025 Chapter 11 bankruptcy filing, a move intended to reorganize operations but one that threatened the legacy of a brand beloved by millions.
The original Hooters founders reunite inside one of their restaurants, leading the $40 million effort to revive the iconic American casual dining brand.
The Comeback: Founders Step In
Recognizing both the financial and emotional stakes, the original Hooters founders saw a unique opportunity to reclaim their brand and preserve its cultural legacy. Neil Kiefer, who had served as the cofounders’ attorney during the chain’s inception in 1983, approached the founders with a bold strategy: acquire 111 Hooters locations out of bankruptcy and implement a comprehensive plan to restore the brand to its original standards. Forbes reports that Kiefer, now 73, emphasized that the move was more than business—it was a moral and emotional responsibility to the chain they had built from scratch.
For founders Gil DiGiannantonio, Edward Droste, and Dennis Johnson, the proposal resonated deeply. “We need to open a restaurant like a hole in the head,” Droste told Forbes, reflecting the practical challenges of expansion, “but we’ve always been America’s neighborhood oasis, and now more than ever, America needs us.” Their vision was clear: to return Hooters to its roots, prioritizing fresh, high-quality food, a welcoming atmosphere, and the iconic elements that had made it a household name.
The acquisition received approval from a Texas bankruptcy judge in September 2025, marking a pivotal milestone in the Hooters story. With this move, the founders’ group, Hooters Inc., now operates 130 domestic restaurants, representing roughly 65% of the U.S. footprint. This consolidation positions the founders to exert greater control over brand standards, menu offerings, and operational practices, ensuring that Hooters maintains both profitability and its original identity.
The plan is ambitious. Beyond simply stabilizing struggling locations, the founders intend to invest approximately $40 million into renovations, staff training, and menu enhancements. Hooters Inc. aims to revive the classic “Florida-themed beach shack” design, with servers wearing the iconic uniforms—tight white t-shirts paired with slightly longer orange shorts—and a focus on a more wholesome, community-oriented dining experience. This strategic pivot addresses criticisms that previous private equity owners had oversexualized the concept, alienating segments of the customer base and diluting brand equity.
Financially, the move carries both risk and opportunity. Prior to the acquisition, Hooters Inc. generated over $100 million in annual revenue with estimated net profit margins of 7%, according to Forbes. Tripling the number of locations could significantly enhance revenue and brand presence, but it also entails the operational challenges of integrating underperforming restaurants, upgrading facilities, and re-engaging loyal customers in a highly competitive casual dining market dominated by chains like Buffalo Wild Wings, Wingstop, and Zaxby’s.
The founders are undeterred. Their strategy emphasizes long-term investment over short-term gains, with no plans to extract profits from the newly acquired locations for at least several years. Instead, revenue will be reinvested to stabilize operations, renovate facilities, and elevate food quality, reflecting a commitment to restoring both financial performance and brand integrity. This approach demonstrates a rare alignment of financial prudence, brand stewardship, and personal dedication—a combination that could serve as a model for other legacy brands navigating turbulent market conditions.
Beyond finances, the acquisition is a strategic move to protect brand reputation. Hooters has long been a cultural icon, from its appearances in media to its global recognition. Preserving this legacy while modernizing operations ensures the chain remains relevant in a landscape where customer preferences are rapidly evolving, and where casual dining chains face intense pressure from delivery platforms, emerging fast-casual concepts, and changing consumer habits.
As the founders prepare to roll out their turnaround strategy, early priorities include addressing health and safety issues in older locations, retraining staff, and restoring the menu to its classic offerings. The goal is clear: to reinforce what made Hooters successful in the first place—fresh wings, homemade sauces, and a friendly, neighborhood-oriented atmosphere—while modernizing operations to meet contemporary expectations.
In many ways, this comeback reflects broader trends in the restaurant industry. Legacy brands with strong emotional resonance can leverage customer loyalty and nostalgia to stage successful turnarounds, provided they combine brand stewardship with operational excellence. For Hooters, this means balancing tradition with innovation, maintaining the playful, approachable spirit of the original restaurants while upgrading food quality, service, and facilities to compete in today’s marketplace.
Financial Strategy: A $40 Million Investment
The $40 million investment is earmarked for several key areas:
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Restaurant Upgrades: Renovating locations to restore the original "Florida-themed beach shack" ambiance.
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Menu Overhaul: Reintroducing the classic hand-breaded wings and homemade sauces, emphasizing quality ingredients.
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Staff Training: Enhancing service standards to ensure a consistent and welcoming customer experience.
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Brand Repositioning: Shifting away from the "breastaurant" image to a more family-friendly atmosphere.
This comprehensive approach aims to rejuvenate the brand's image and profitability.
Hooters servers, known for their iconic uniforms and approachable, model-like presence, represent the playful and recognizable image of the brand.
Legal and Operational Challenges
The acquisition process was not without its challenges. The founders had to navigate complex bankruptcy proceedings and negotiate with creditors. Legal counsel for the buyer group included Morrison & Foerster, with North Point Mergers & Acquisitions advising on the deal.
Operationally, the founders face the task of restoring customer trust and loyalty. Many locations were in physical disrepair, and the brand's reputation had suffered due to inconsistent service and quality. The founders are committed to reinvesting profits back into the business, forgoing personal gains to ensure long-term success.
Industry Implications
Hooters' revival efforts come at a time when the casual dining industry faces significant challenges. Rising food and labor costs, changing consumer preferences, and increased competition from newer chains like Shake Shack have strained many established brands.
The founders' decision to return to the brand's roots and focus on quality and service may serve as a model for other legacy brands seeking to navigate these turbulent waters.
FAQs About The Takeover
What Led to Hooters' Bankruptcy in 2025?
Hooters filed for Chapter 11 bankruptcy protection after accumulating $376 million in debt, combined with years of declining sales and underperforming locations. The pandemic exacerbated financial struggles, and mismanagement under previous private equity owners left many restaurants in disrepair, forcing the chain to close several dozen sites across multiple states.
How Are the Original Founders Involved in Hooters' Revival?
The original founders—Gil DiGiannantonio, Edward Droste, Dennis Johnson, and CEO Neil Kiefer—have invested $40 million to acquire 111 Hooters locations from bankruptcy. They are spearheading a full-scale turnaround, focusing on restoring the brand’s signature food, atmosphere, and service standards while ensuring that no profits are extracted for several years, reinvesting instead to stabilize and grow the business.
What Changes Can Customers Expect at Hooters?
Customers can look forward to renovated and upgraded locations that reflect the original “Florida beach shack” vibe, a revamped menu emphasizing classic items like fresh chicken wings and homemade sauces, improved staff training and service, and a more wholesome, family-friendly environment that balances Hooters’ cheeky brand with quality dining.
Final Thoughts
The original founders' $40 million investment in Hooters is more than a financial commitment—it is a bold vote of confidence in the enduring power of their brand. In an ever-changing world, it is inspiring to see a legacy brand not just stay afloat but actively thrive. By focusing on fresh wings, stellar service, and the charm that made Hooters a household name, the founders are determined to make Hooters a neighborhood favorite once more.
