Hooters is an American restaurant chain that has had its fair share of crazy business ideas over the years. For those who are unfamiliar with the brand, Hooters is a chain that is known for hiring young, scantily-clad females as waitresses. At the restaurants, revealing outfits and sex appeal are played up and are a primary component of the company’s brand and image.
Founded in 1983, the restaurant chain saw great success heading into the turn of the century. According to Tampa Bay Business Journal, Hooters had 262 restaurants and revenues exceeding $600 million annually in early 2001.. Flushed with cash, Hooters began to pursue crazy business ideas, in order to grow the brand.
Let’s take a look at Hooter’s 5 craziest business ideas:
Hooters Airlines
In 2003, Hooters went into the airline business, opening “Hooters Air”, in order to expand the brand. Based in Myrtle Beach, SC, the airline offered low-price direct flights to over 15 cities in the US. Each flight would feature two Hooter’s Girls who would entertain passengers with trivia, games, and songs during the flight. Despite the airline’s initial success, it closed down after three years, citing a $40 million loss.
According to Airline Industry Analyst, Henry Harteveldt, there are three key factors that lead to the demise of Hooters Air:
At the time of Hooters founding, the airline industry was still reeling from the effects of the September 11th terrorist attacks. Many individuals were still too scared to ride airplanes, which led to lower plane occupancy rates, across the industry.
In the early 2000’s, there was growing low fare competition in the market, as SouthWest and other competing airlines began to expand.
During Hooters Air tenure, the industry was facing rising jet fuel prices. The rising cost of fuel eroded their margins and made it hard for Hooter’s Air to have profitable flights.
Hooter’s Casino Hotel
In the early 2000’s, Hooters also had strong interest in getting into the casino business. According to NBC News, Hooters had been scouting the Las Vegas market for three and half years to find the right opportunity. In 2004, they approached the owners of the Hotel San Remo with a joint venture proposal to redevelop the property into a Hooter’s Casino Hotel – which was ultimately accepted. As part of the agreement, Hooter’s invested $190 million to renovate the property.
In 2006, Hooters opened Hooters Casino Hotel in Las Vegas, NV to the public. The property featured 696 remodeled rooms, a 35,000 square foot casino, and the second largest Hooters restaurant in the world. However, in less than 5 years after opening, Hooters Casino Hotel fell into bankruptcy. The bankruptcy was primarily due to the 2007 economic recession, which ravaged the Las Vegas hospitality and tourism industry. From 2007-2010, net revenues for Hooters Casino Hotel dropped 34 percent, nonexecutive pay dropped 26 percent, and layoffs cut staff by 37 percent, according to the Las Vegas Review-Journal. In 2011, Hooters Casino Hotel formally filed for bankruptcy, showing assets of $10 to $50 million compared to liabilities of $162 million. All told, bankruptcy filings show that from opening day to the date of the bankruptcy filing, Hooters Casino Hotel was a venture that cumulatively lost more money than it ever made.
Hoots
In 2017, Hooters launched a new fast-casual spinoff called, Hoots. Hoots was designed with smaller stores and a streamlined menu to respond to the industry shift to fast and convenient on-the-go options.
However, in a shocking move, Hooters has decided to ditch its low cut tank tops and short shorts uniform for Hoots. Instead, the scantily clad servers that made Hooters famous will now be replaced by both male and female waiters in polo shirts.
This begs the question, do people actually go to Hooters for the food? Hooter’s management certainly believes so and is doubling down on this conviction by centering the Hoots menu on the Hooter’s brand’s signature wings. As a point of differentiation, Hoots offers five different wing options: breaded, naked (no breading), roasted, smoked, or boneless. Additionally, Hoots offers more than a dozen sauces and rubs, allowing over 10,000 different wing combinations for customers. “With only a few national competitors and an unmet demand, hoots wings is ready to become a dominant player in the wing industry” says Sal Melilli, CEO of HOA Brands and creator of hoots wings. “We’ve built a strong model that is well suited for the trends of tomorrow and years to come, and that has resulted in impressive unit level economics for the brand.” Today, Hoots has 12 locations in five states. While there are currently no Hoots locations in the DMV, I look forward to the day when I can finally try the wings and see if this is a concept that has legs to stand on.