Restaurants fail for a lot of reasons.
If you're a fan of Gordon Ramsay and his multiple shows during which he tries to save failing eateries, you know that not pricing food correctly and wasting food can lead to failure.
That should not be a problem with chain restaurants. Chains follow recipes and pricing schemes set by corporate chefs and accountants. In theory, that should make every item that is sold profitable unless a clear decision to lose money has been made.
Related: Struggling fast-food chain near Chapter 7-style bankruptcy end
Red Lobster, a chain that filed Chapter 11 bankruptcy, bet poorly on a loss leader promotion. It famously lost $11 million selling all-you-can-eat shrimp for $20 with the idea that it would make up its losses by selling drinks and desserts.
That didn't happen and while that was only part of the reason for its Chapter 11 bankruptcy filing, it was a massive blunder. To survive, Red Lobster has closed more than 100 locations and will close more.
Another chain, Boston Market, has not filed for Chapter 11 bankruptcy although its owner tried to twice before being denied by the courts. That company has fallen apart and dwindled to a handful of locations as the parent company drowns in debt.
Now, another well-known restaurant chain has very quietly closed 41 locations and it might close more.
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Image source: Pixabay.
Hooters has an interesting history
While Red Lobster has been very public with its restaurant closures, Hooters has been shutting down locations since late June without saying which ones. In many cases fans of the brand have learned about their local Hooters closing by showing up and seeing it closed.
The company has struggled since the Covid pandemic and it's fair to question whether its model still works. Marketing a family restaurant where the main feature is waitresses in skimpy outfits has always been problematic, but what was once acceptable may no longer be seen as appropriate by enough people to support the brand.
Hooters has openly called itself "delightfully tacky, but unrefined." The first location opened in Florida in 1983. The company shared its origin story on its website.
"What to name the place. Simple – what else brings a gleam to men’s eyes everywhere besides beer and chicken wings and an occasional winning football season? Hence, the name: Hooters. It is supposed they were into owls. Strange group. Anyway, the end result is what you see around you," the company wrote.
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Hooters has struggled to define itself
During the Covid pandemic, Hooters launched multiple ghost kitchens that didn't hide the brand but provided some distance. Hootie's Burger Bar and Hootie's Bait & Tackle essentially sold a selection of the chain's menu under different names. (A ghost kitchen can be a food-prep site external to a restaurant or a separate brand operating inside an existing restaurant.)
In theory, that might make ordering from the company palatable for people who would never visit the chain. Like Chuck E. Cheese's efforts to sell its pizza via a ghost kitchen under the more deceptive Pasqually's Pizza & Wings, the effort brought more ridicule than sales.
Hooters has struggled since the Covid pandemic and more than 40 locations quietly closed. The company has said that it's closing restaurants and has attributed the move to "current market conditions,"
Tracking the closures requires checking its website to see which restaurants are removed.
More restaurants:
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"The locations are spread across 14 states, with Texas having the most store closings by far: Texas has 16, while most of the other states have only a handful each," News Center Maine reported.
That website and television station shared a statement from Hooters where the chain said it "remains highly resilient and relevant."
"We look forward to continuing to serve our guests at home, on the go and at our restaurants here in the U.S. and around the globe," the company added.
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