Sample data — illustrative, not for citation
Hooters
casual-dining · Hooters of America · est. 1983
Hooters is a casual-dining restaurant and sports bar chain, part of Hooters of America, known for chicken wings, burgers, and beer served by its signature waitstaff. A franchisee operates a full-service restaurant with a bar and televised sports, drawing a lunch, dinner, and game-day crowd.
Hooters net unit count declined -16.8% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Not enough disclosure
Distress
No verified FDD extraction to judge from. Any figures shown are labelled sample data or independent federal records.
SBA loan defaults
58.3%
12 loans resolved — directional only
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 225 | 202 | 183 |
| Opened | 1 | 1 | 1 |
| Transfers | 4 | 3 | 2 |
| Terminations | 12 | 10 | 8 |
| Non-renewals | 4 | 3 | 3 |
| Reacquired by franchisor | 1 | 1 | 1 |
| Ceased — other reasons | 10 | 9 | 7 |
| Outlets at end | 202 | 183 | 168 |
| Net change | -23 | -19 | -15 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 13 SBA-backed loans to Hooters franchisees since 1996. Only 12 have resolved so far — too thin for a reliable default rate, but 7 of them charged off.
—
12 resolved · too thin to rate
—
avg. charged-off $ ÷ approved $
—
default rate × loss severity
$787,800
what recent franchisees borrowed
54 mo
approval → charge-off, defaulted loans
—
distinct banks lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO HOOTERS BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
To open (Item 7)
$856K–$5M
all-in investment range
Franchise fee (Item 5)
$75K
upfront, one-time
Royalty (Item 6)
5%
of sales, ongoing
Your figure — this brand discloses no Item 19 earnings; validate with current & former owners.
Royalty you'd pay / yr
$50K
5% of sales, before profit
Over a 10-yr term
$500K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for Hooters with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 14 wage cases against operators of this system, recovering $95K in back wages for 847 workers. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
14
Back wages owed
$95K
Employees affected
847
Since 2020
2
Read this carefully. The employers in these cases are individual Hooters franchisees — separately owned businesses operating under the brand name — not Hooters itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2024.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
A Mass. Hooters is closing its doors
news:Boston.com · 2mo ago
Hooters to close Shrewsbury restaurant
news:Worcester Telegram · 2mo ago
Last Hooters location in the Valley closes its doors
news:ValleyCentral.com · 2mo ago
Columbus Hooters closing for good this weekend
news:WTVM.com · 4mo ago
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing Hooters's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →