Hooters, a well-known sponsor in the NASCAR world, is currently facing major financial difficulties, according to a Bloomberg report. The company is reportedly struggling under a massive $300 million debt and is in talks with creditors to find a path forward. Sources suggest that bankruptcy might be on the horizon.
To manage the situation, Hooters has enlisted the help of Ropes & Gray law firm. The challenges have already forced the closure of around 40 locations across states like Rhode Island, Virginia, Florida, Kentucky, and Texas. Despite these setbacks, Hooters remains committed to its employees and is still opening new locations while growing its frozen food product line.
The company hopes to recover, similar to how brands like Red Lobster navigated financial struggles. Hooters’ issues began in 2023, driven by rising food and labor costs, and the lasting impact of the pandemic, which reduced customer traffic that has yet to fully rebound.
Hooters has had a longstanding presence in NASCAR, starting in 1991 and reaching a peak when Alan Kulwicki won the 1992 Winston Cup with their support. After a break, Hooters returned in 2016 with Greg Biffle and partnered with Chase Elliott in 2017 at Hendrick Motorsports. This partnership brought fan-favorite promotions like “When Chase Wins, You Win,” offering free wings when Elliott won a race. In 2022, they even launched Chase Elliott’s Chicken Tenders, an online restaurant concept.
However, financial strain led to the end of their sponsorship in 2024 after failing to meet financial commitments. The situation worsened when the Kroll Bond Rating Agency downgraded Hooters’ bonds, prompting the company to seek advice from Houlihan Lokey Inc. on handling its debt.
The fallout extended to NASCAR, with Hendrick Motorsports suing Hooters for over $1.7 million in unpaid sponsorship fees. The NASCAR calendar was also affected, as Hooters ceased sponsoring two races at Richmond Raceway. Coca-Cola stepped in as Chase Elliott’s sponsor for the 2024 Richmond race, and Amazon Prime Video secured a deal with Hendrick Motorsports for Elliott’s No. 9 car from 2025 to 2027.
Despite these challenges, Hooters continues to push forward, opening new locations in Las Vegas and Florida as recently as May 2024. In a statement, the company expressed optimism, emphasizing their efforts to expand both domestically and internationally while continuing to serve customers in various ways.
