From bust to boom? Hooters Australia bought out of administration by US restaurant group
US restaurant group Chanticleer Holdings is planning to ramp up its presence in Australia and invest “significant” capital in its local investments, after making a deal to buy the locations and assets of five Hooters outlets out of voluntary administration.
Speaking to SmartCompany this morning, Chanticleer Holding chief executive Mike Pruitt said Chanticleer, which operates 15 Hooters restaurants around the world, including in South Africa, Europe and the US, will use the local Hooters chain as a launch pad into the Australian market and may consider bringing some of its other food brands Down Under.
Chanticleer owns and operates a string of US burger chains, including American Burger Co, BGR the Burger Joint and Little Big Burger, as well a majority interest in a US health-focused chain of restaurants, Just Fresh.
In its most recent financial results, the group reported revenue for the first half of the year of $US19.4 million ($26.8 million).
‘We operate 61 restaurants around the world and only 15 of those are Hooters so we definitely see an opportunity [to open more outlets],” Pruitt says.
“Our intention is to make Australia a focal point.”
Chanticleer revealed on Tuesday it had increased its ownership of the five Hooters restaurants in Australia, from 60% prior to the venues entering voluntary administration, to 80%.
As revealed by SmartCompany in July, companies linked to the Hooters venues in Parramatta, Penrith and Campbelltown in New South Wales, and Surfers Paradise and Townsville in Queensland, were placed in voluntary administration.
Pruitt says Chanticleer had previously been a “passive investor” in the Australian Hooters operations but chose to become more involved when the operators of the local restaurants “unfortunately didn’t do a good job”.
“We still believe deeply there is a market there,” he says.
Pruitt says the remaining 20% stake of the local operations is held by another investor, PCS Australia owner Sid Borg, who was a creditor of the restaurants’ previous operating companies.
‘We both stepped up to provide additional capital to acquire the business,” Pruitt says.
Pruitt revealed Chanticleer has “already put in $1 million” to buy the assets of the five restaurants, which is “on top of the $8 million we had in those restaurants prior to the administration”.
“We’ve made a significant investment,” he says.
Pruitt says the capital investment will continue, with work already underway to renovate and upgrade the Hooters flagship venue in Parramatta.
He also predicts new Hooters outlets will open in Australia sooner rather than later, saying he is confident a sixth store will open within the next six months.
Chanticleer has also installed a new management team to oversee the revitalisation of the brand locally, which is being led by chief operating officer Mike Messler, who was previously the franchise business development manager at Hooters in the US.
Joining Messler is Ron Dufficy, who has been appointed as chief financial officer. Dufficy previously held roles as general manager at Global Shared Services and chief financial officer of the Americas for Aristocrat Leisure Limited.
While Pruitt says Chanticleer “certainly” wishes the voluntary administration of the local Hooters outlets “didn’t happen”, he says the appointment of administrators did not have a dramatic impact on the venues’ bottom lines.
“It shows the staying power of the brand that even in administration, while the sales did drop some, they didn’t drop significantly,” he says.
Pruitt says he knows “there’s going to be some people who are naysayers” who will use the external administration as a reason to criticise the Hooters brand, but he says he is committed to winning the trust of existing and new patrons.
“It is a very unique brand to say the least,” he says.
“It was started 32 years ago, which we celebrated two years ago.”
“We have to earn from some people the opportunity to serve them again.
Source: Smart Company, Eloise Keating, 22nd October 2015
Originally published as: From bust to boom? Hooters Australia bought out of administration by US restaurant group
