The company is working with law firm Ropes & Gray to file for bankruptcy, said the report.
The bankruptcy court process is expected to begin in the next two months.
The development comes as the restaurant chain faced liquidity issues after its foot traffic declined. It also shuttered several locations and sold about $300 million in asset-backed bonds in 2021.
Some locations were closed in Alabama, Indiana and Kentucky, followed by four more in Florida, while five more closed in Georgia.
Texans saw the largest list of Hooters restaurant closures, with a total of 17 restaurants deciding to shut down.
The company was working to address its debt load with its lawyers as well as turnaround advisers from boutique firm Accordion Partners, Bloomberg previously reported.
Across the United States, casual dining chains have come under pressure as higher inflation, supply chain disruptions and higher interest expenses raised menu prices, making consumers less interested in eating out.
Last year, over a dozen large restaurants or franchisees had sought bankruptcy protection from creditors.
Seafood giant Red Lobster, Italian chain Buca di Beppo, fish taco eatery Rubio’s Coastal Grill and the owner of burger and pizza chains BurgerFi, TGI Friday’s, and Anthony’s Coal Fired Pizza are among those that have sought to reorganize through bankruptcy this year.
About Hooters of America
Hooters of America was founded in 1983 in Clearwater, Florida. It was acquired by Nord Bay Capital and its advisor TriArtisan Capital Advisors LLC from H.I.G. Capital, Chanticleer Holdings and other investors in 2019.
The popular restaurant chain is known for the large bust displays of its scantily clad waitresses. It is also Known for its world-famous Hooters Style chicken wings.
