America’s most popular breastaurant chain has new owners who plan to take the company in a slightly different direction.
The two private equity firms that purchased the chain, Nord Bay Capital and TriArtisan Capital Advisors, have designs on expanding Hoots, the fast-casual spinoff of Hooters where the servers aren’t required to wear short-shorts and tight tank tops. In a break from the company’s old policy, this new iteration of Hooters also, notably, employs both men and women, and the branding looks like any other generic fast-casual chain. The company opened its first location of the desexualized, counter service-only wing restaurant in the Chicago suburbs two years ago, and has since planned two more locations of Hoots that area, as well as an outpost in Atlanta.
The Hooters team cooked up this new restaurant following a four-year period when the company closed seven percent of its locations across the country. A big part of the problem for the chain is that all of the details of the old restaurant — from the name to the design of the dining rooms to the server uniforms — feel dated now. “It’s a scenario where you have to rethink the whole thing,” restaurant branding expert Joseph Szala recently told Vox. With its more casual service style, pared down menu, and less aggressive branding, Hoots seems geared at millennials who might not otherwise step foot inside Hooters.
For nearly three decades, Hooters was run by Atlanta businessman Robert H. Brooks and his children, but the family sold the business to a few investment groups in 2011, including Chanticleer Holdings LLC and H.I.G. Capital. As part of the new deal, those two companies will each retain a stake in the business, which now includes 430 restaurants in 27 countries. In a statement about the sale, Hooters of America CEO Terry Marks notes that the company is “pleased with the early results of our new fast casual concept and plan additional openings later this year.”
Hooters is just one of many national restaurant groups that have been gobbled up by private equity firms lately. Over the last five years, similar deals have been struck for the sale of chains like Fogo De Chao, Del Frisco’s, and Red Lobster. Earlier this month, Gordon Ramsay announced a major expansion tear thanks to funding from the private equity firm Lion Capital. And buzzy restaurant groups like Momofuku and &pizza have recently expanded with the help of private investment leviathan RSE Ventures.
The terms of the Hooters deal were not disclosed.
• Hooters of America Has Been Sold [Restaurant Business]
• Hooters of America, LLC Acquired by Nord Bay Capital and TriArtisan Capital Advisors [Yahoo]