Struggling chain closes restaurants, misses key payment

Restaurants have to constantly evolve in order to keep up with an ever-changing market. Even popular concepts grow stale or rivals emerge that offer something consumers like a little more.

In addition to keeping your menu fresh, it’s also important to make sure you serve the needs of customers. The Covid pandemic was an extreme example of that as dining rooms closed and restaurants had to pivot to a delivery, drive-through, and takeout model. 

Related: Popular retailer closing all stores after Chapter 11 bankruptcy

Many companies struggled to do that as they lacked the technology infrastructure needed to quickly make that pivot. Others simply did not offer food that people wanted to eat via delivery, and some chains launched digital ghost kitchen brands that failed to take off.

Chuck E. Cheese, for example, launched Pasqually’s Pizza & Wings, a delivery-only brand that explicitly hid its connection to the parent brand. Hooters, another struggling restaurant chain, tried a similar idea by launching a virtual food court in nearly 200 markets.    

The company did not entirely hide its connection to the chain that’s famous for its waitresses in low-cut tops and short shorts, but it also wasn’t overly explicit about the connection.

“The first three virtual concepts being offered via the online store include Chase Elliott’s Chicken Tenders, which debuted to fanfare last year with its popular racecar driver curator and signature dippable delicacies, plus Hootie’s Burger Bar with a full line of cheeseburgers and hamburgers with all the toppings and Hootie’s Bait & Tackle, a seafood eatery featuring items such as buffalo or steamed shrimp, snow crab legs, fish and chips and more,” the company shared on its website.

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Hooters has struggled

While the company has not commented on its ghost kitchen/virtual markets, they are being offered in fewer markets, if at all. The chain has also lost its connection with Elliot as Hendricks Motorsports, the team he drives for, has dropped its association with the brand.

The NASCAR team made it clear that it had severed its longstanding relationship with the restaurant chain because it had not paid its bills.

“Due to these unfortunate and unexpected circumstances, and despite extensive efforts on both sides to identify a workable solution, it became necessary for Hendrick Motorsports to end the relationship,” the team’s statement said.

Hooters and Hendricks Motorsports have been working together since 2017.

A Google search for Chase Elliott’s Chicken Tenders shows the virtual restaurant in select markets on various food delivery platforms, but it shows as “closed” with no next opening date. 

An email to Hooters’ public relations agency, the listed media contact on its website, requesting comment was not immediately returned.

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Hooters abruptly closed restaurants

In late June, Hooters abruptly closed 40 restaurants. It blamed market conditions for the closures and tried to highlight the positives moving forward for the brand in a media statement published by Nation’s Restaurant News. 

“Like many restaurants under pressure from current market conditions, Hooters has made the difficult decision to close a select number of underperforming stores,” the restaurant chain shared.”With new Hooters restaurants opening domestically and internationally, new Hooters frozen products launching at grocery stores, and the Hooters footprint expanding into new markets with both company and franchise locations, this brand of 41 years remains highly resilient and relevant.”

NRN, however, pointed out that Hooters’ problem may not be the market as rivals including Dave & Busters, Miller’s Ale House, and Twin Peaks have all grown in restaurant count by around 10% since 2022.

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Hooters’ problem may be its core concept. Millennials may reject the idea of a restaurant chain based on making its servers wear skimpy outfits. Twin Peaks, of course, also fits into the so-called ‘breastaurant” category, but it has a fresher menu, and it’s a little more subtle in its presentation. 

Closing restaurants en masse and quickly is not uncommon in the restaurant business and changing consumer habits have accelerated that in some cases. Not paying to keep a high-profile sponsorship deal alive, however, is more troubling because a healthy company would likely negotiate a more amicable ending to the deal.