Top 5 Reasons Why Not to Buy Hooters Franchise

Owning a restaurant may be a rewarding profession, but the industry also has its fair share of challenges. While owning a franchise can certainly be rewarding, some drawbacks exist with an already existing brand and supply chain. For instance, franchisors often charge high fees and require long-term contracts, making it difficult for prospective owners to recover their investments and earn profit.

Similarly, when you’re considering purchasing a Hooters franchise, you need to know if Hooters has profitability potential or not. These are the most critical factors for determining the profitability of business investment:

• Market demand/potential
• Existing competition
• Entry barriers (economies of scale, first-mover advantage)
• Timing (when is the right time to enter)

To assist you in deciding, we examine the benefits and drawbacks of owning a Hooters franchise restaurant. Our comprehensive analysis of existing franchisee complaints, competitors’ proposals, and company research will help you make a rational decision without investing your time in such research.

The Decline of Hooters

The Hooters name is a double entendre, referring to its owl logo, a bird known for its “hooting” calls, and an American slang term for human breasts popularized by comedian Steve Martin. Since its first-ever restaurant in 1983, in Clearwater, Fla., the brand has grown to hundreds of restaurant locations across the United States, Asia, Europe, South America, and Canada.

The once-popular Hooters franchise has taken a hit to its reputation in recent years due to the opening of numerous offshoot restaurants across the country. One main factor in this decline is the extreme public backlash against sexual harassment accusations made by former employees, who have suggested that the company has fostered an environment in which sexual assault towards women is tolerated.

The Hooters restaurant brand is taking a new direction, one that its well-known scantily clad waitresses won’t be branded. Instead, Hooters of America is introducing Hoots, a family-friendly, quick-serve concept that plans to open at least two more Chicago locations, one in Logan Square and the other in the South Loop.

Top 5 Disadvantages Of Buying The Hooters Franchise

Although Hooters has been serving customers for over 30 years, it has failed to keep up with rapidly changing trends and is now seen as a “1980s fading relic. However, they have experienced a slight increase only once in recent times. Besides, in 2008, they had 400 restaurant locations, while through 2011, about 35 Hooters locations were shut and ended up losing about 100 million USD in annual sales. Moreover, they closed nearly 7% of their restaurant locations from 2012 to 2016.

Several factors and reasons made the Hooters franchise experience the declining phase. Among several, here are the top 5 reasons mentioned below that will help you learn why not to buy the Hooters franchise.

#1 Franchise Cost

Look into FDD before buying the Hooters franchise. Cost of buying the Hooters franchise are as follows:

#2 Repulsive and Objectionable Experience

Several reports concluded that women working in “sexually objectifying settings or work environments,” like Hooters, where they have been motivated to mingle with patrons and dress up provocative outfits, are very likely to develop anxiety and eating disorders. It’s not just that their bodies were objectified and displayed, but that supervisors and customers ranked their looks. They didn’t have the power to handle what happened in their environments, including sexual assault. When the #Metoo campaign has legally outcasted such unruly behavior towards women, running a restaurant most vulnerable to such offending is at high risk.

#3 Non-prevalent Tees

The original marketing strategy of Hooters could have been to entice customers with the female body. However, it somehow failed due to the obscure fact that customers don’t feel the desire to flaunt women’s breasts at a so-called “breastaurant.” It seems to be a significant drawback for the Hooters franchise, as millennials today are not quite as pleased as their elders are with females in low-cut tees.

#4 Casual Dining Abandonment By Youth

One of the significant problems that stem from the decline in the hospitality industry is that today’s youth dislike their casual dining style and prefer fast-casual restaurant chains, such as wine bars, meal delivery services, Chipote, etc. People need convenience rather than waiting for their order at a restaurant. So, to get youngsters at its door, Hooters initiated overhauling restaurant settings with improved AV systems, outdoor seating capacities, the latest technology, etc. However, it did not have much impact as expected, instead just a burden to franchisee pockets.

#5 Lawsuits Against Hiring Practices

Hooters faced lawsuits in 1997 for turning away two men based on their gender. They settled the lawsuit but claimed they hire entertainers and not waitresses and agreed to provide a few gender-neutral job roles. They justified their hiring practices using a Civil Rights Act’s footnote claiming through a conversation. It stated that a smokin’ hot body is a “bonafide professional eligibility,” and refusing to employ someone without a specific set of requirements is not discrimination. However, you would like to buy a restaurant franchise with clean and settled settings rather than disturbing elements, won’t you?

Does Buying A Hooters Franchises Have Any Advantage?

Buying a restaurant or buying the Hooters franchise may have a few significant advantages. Though the restaurant is facing a few challenges, it has a few benefits, including the following:

Training and Support

With the proper assistance and support, you may quickly find how to become a successful and profitable restaurant owner. Being a Hooters franchise owner, you will have a robust support system in place for your business model. When you sell their food and use the brand name, Hooters will want the franchise to prosper. Therefore, it will try to assist you in every way you want, including ongoing support, customer service training, and business training. But not necessarily; they will always be successful in it.

Established concept and menu

Creating a concept and a menu is among the most challenging aspects of establishing a restaurant, as it requires extensive trials before you discover something you like. Besides, you presume that your customers are happy with it. However, the Hooters franchise will help you get everything already organized for you, including the practical concept and menu.

Brand Recognition

Buying the Hooters franchise will help you get a guaranteed applicant pool for vacant positions and a customer base. In addition, you don’t need to compete for attention in the restaurant location since customers will respond and recognize the already established brand name.

Conclusion

Hooters, the casual dining restaurant chain, has been serving the masses for about thirty years. However, being in the hospitality industry for such a long period could not help Hooters gain growth and development or brand reputation. Instead, it experienced a decline in its brand recognition, traffic, and sales due to several significant drawbacks mentioned in the guide above, including relatively higher startup costs. So, when you think of buying a restaurant franchise, specifically Hooters, we advise considering the drawback it carries along with limited benefits.

Sources

https://www.hooters.com/franchising/what-it-takes/

https://www.nrn.com/fast-casual/hooters-franchisee-open-fast-casual-spinoff

http://www.cnn.com/2004/LAW/04/09/hooters/”>http://www.cnn.com/2004/LAW/04/09/hooters/

https://web.archive.org/web/20101002055229/http://www.rochesternow.org/hooters.html

https://web.archive.org/web/20070202040348/http://www.hooters.com/Hooters-Fortune-9-2003.pdf