How to Finance a Hooters Franchise: Bar, Build-Out and Buyouts
By Anthony Cornella
A Hooters franchise loan finances a full-service, bar-centered casual dining restaurant built around wings, televised sports and a large dining room. That makes it a different credit than a counter-service franchise: the investment is larger, a liquor license is part of the business, and lenders look closely at both the location and the brand’s recent history before they commit.
This article explains how financing a Hooters restaurant works, from new builds and conversions to buying an existing location, what lenders look for, and why the brand’s recent ownership change and SBA status shape the financing plan. Because verified franchisor figures for the current offering were not available to us, we focus on structure and process and point you to the exact FDD items to review.
US Professional Funding is not affiliated with, sponsored by or endorsed by Hooters; the name is used only to describe the business. Fees and investment figures appear in the franchisor’s current Franchise Disclosure Document (FDD) and can change, loan programs and terms vary by lender and borrower, and every loan is subject to review and approval. Nothing here is legal, tax or investment advice; review the current FDD and franchise agreement with a franchise attorney and accountant.
Hooters Franchise Loan at a Glance
- Concept: a full-service casual dining restaurant and sports bar known for wings, founded in Clearwater, Florida, in 1983, according to the franchisor’s own franchise brochure.
- Ownership: after a court-supervised restructuring of its former franchisor parent in 2025, the brand was acquired by a group of existing franchise operators, including a company tied to the original founders.
- Fees and investment: the initial franchise fee, royalty, marketing contributions and Item 7 investment range are disclosed in the current FDD; confirm them there before building a budget.
- Typical financing needs: building or leasehold improvements, kitchen and bar equipment, audio-visual systems, a liquor license, opening inventory and working capital.
- SBA Franchise Directory: Hooters is not listed, so conventional financing is the primary route unless the brand is added.
What Is Hooters?
Hooters opened its first restaurant in Clearwater, Florida, in 1983 and grew into a widely recognized casual dining brand built around chicken wings, a full bar and sports viewing. The restaurants are typically sit-down dining rooms with a bar, many televisions and a menu anchored by wings, burgers, seafood and appetizers. Many locations are freestanding buildings with their own parking, while others occupy end-cap or inline space in shopping centers or entertainment districts.
A brand in transition. In 2025, the brand’s former franchisor parent went through a Chapter 11 reorganization. The brand’s assets were acquired by a group of experienced franchise operators, including a company affiliated with the restaurant’s original founders, and the system moved toward a franchise-operated model. For a buyer and a lender, that history matters: it affects how the franchisor supports owners, how stable the system is, and how much weight a lender gives the brand versus the individual restaurant’s results.
Why lenders view Hooters the way they do. Lenders see a long-established name with broad recognition, but also a full-service, alcohol-serving format with high labor costs, a large footprint and sales that can swing with sports seasons and local competition. Recent store closures in some markets and the ownership change mean lenders tend to underwrite each restaurant’s own cash flow and the operator’s experience more heavily than the brand name.
Hooters Franchise Costs
The current FDD is the only reliable source for Hooters fees and investment ranges. Items 5, 6 and 7 disclose the initial franchise fee, ongoing fees and the estimated initial investment, and they may differ from older brochures or articles. Here is how the cost categories typically break down for a full-service bar and grill concept, and what to verify for each.
Initial franchise fee. Item 5 states the fee for a single restaurant and any development fees for multiple units. Ask whether the franchisor currently offers any development incentives or fee reductions, and get them in writing.
Real estate and build-out. A full-service restaurant with a bar and large dining room is space-intensive. A ground-up freestanding building means land, site work and construction; a second-generation restaurant space can lower costs if the kitchen, hood, grease trap and bar plumbing are already in place. Our article on first- versus second-generation restaurant space explains how that choice changes the budget.
Equipment. Expect commercial fryers, grills, refrigeration and walk-in coolers, ventilation and fire suppression, bar coolers and draft beer systems, dish machines, point-of-sale systems and a large audio-visual package for sports viewing.
Liquor license. Depending on the state and city, a liquor license can be inexpensive and quickly issued or scarce and costly to transfer. It is often a meaningful line item that lenders treat carefully, since its value and transferability vary by jurisdiction.
Opening costs and working capital. Item 7 typically includes training, opening inventory of food and beverages, uniforms and smallwares, pre-opening payroll and marketing, deposits and additional funds for the first months. A large full-service staff makes pre-opening payroll a significant number.
Total investment. When you request the FDD, compare the Item 7 total with real bids for your site. A Hooters franchise loan budget generally needs to account for:
- Initial franchise fee (Item 5)
- Land and building, or leasehold improvements for a leased space
- Kitchen, bar and beverage equipment
- Furniture, fixtures, signage and decor
- Televisions, audio and other technology
- Liquor license and other permits
- Opening inventory, training and pre-opening payroll
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists the royalty, marketing or brand fund contributions, any local advertising requirement, technology fees, transfer and renewal fees, and audit or late charges. Read each one carefully.
Percentage-of-sales fees. Royalty and marketing fees are typically calculated on gross sales. Because they are paid before rent, labor and debt service, they directly reduce the cash flow a lender can count on.
Alcohol and labor costs. A full bar raises sales per guest but brings insurance, liquor liability coverage and compliance costs. Labor is a large expense in a full-service restaurant, and wage changes in some states can shift margins quickly.
Remodels and reimaging. Many full-service franchise systems require periodic remodels. Ask whether a remodel or reimaging program is planned and build any obligation into the financing plan.
How lenders factor fees in. Lenders build every fee into the projections and then test whether the restaurant’s cash flow covers the loan payment with room to spare. A restaurant with healthy sales can still struggle to qualify if royalty, marketing, rent and labor together leave too thin a margin.
Franchisor Requirements for New Owners
We were not able to verify current minimum net worth or liquidity requirements from the franchisor’s own materials, so confirm them directly with the franchisor and in the FDD. In practice, a full-service bar and grill franchise generally looks for:
- Meaningful liquid capital and net worth, verified through financial statements
- Multi-unit restaurant or hospitality operating experience, especially with full bars
- The ability to obtain and keep a liquor license in the proposed location
- A suitable site approved by the franchisor
- Completion of the franchisor’s training program before opening
Approval to join the system and approval of a loan are separate decisions, so expect both processes to run side by side.
Ways to Own a Hooters
Buying an existing restaurant. With the system now run largely by franchise operators, buying an existing location from an operator may be one of the more practical paths. Lenders can underwrite actual sales and expenses, and the buyer inherits a staff, liquor license (subject to approval) and local following. Our guide to buying a franchise resale covers transfer approval and timing.
Acquiring a restaurant through a franchise group sale. When a multi-unit operator sells some locations, buyers may be able to acquire one or several restaurants at once. See our page on franchise restaurant acquisition financing.
Opening a new restaurant. A new Hooters requires franchisor site approval, a lease or real estate purchase, a full build-out and an extended ramp-up period. Lenders underwrite new units on projections, the operator’s track record and the strength of the site.
Converting an existing restaurant space. A former full-service restaurant or bar can lower build-out costs. The lease, the condition of the kitchen and bar systems and the liquor license transfer all affect the financing.
Financing Options for a Hooters Franchise
Conventional term loans. Because Hooters is not on the SBA Franchise Directory, conventional business loans are the main tool for most buyers. A conventional lender sizes the loan to the restaurant’s cash flow, the borrower’s equity and collateral, and generally requires personal guarantees.
Commercial real estate loans. When an owner buys the building or land, real estate financing can be structured separately from the business loan, often with a longer amortization.
Equipment financing. Kitchen equipment, walk-in coolers, bar and draft systems, televisions and point-of-sale technology can be financed or leased on their own. Learn more about restaurant equipment financing and leasing.
Renovation financing. Buyers of older locations may need to refresh dining rooms, bars and restrooms. Our article on restaurant renovation and remodel financing explains how to fund those projects.
Working capital and lines of credit. Sales at a sports bar can rise and fall with football season, playoffs and big events, while payroll and food costs stay steady. A line of credit helps bridge slower stretches and fund inventory for peak weekends. See our restaurant working capital options.
Seller financing on resales. In some sales, the seller may carry part of the price. Any seller note would need to be acceptable to the senior lender and is typically subordinate to it.
SBA Loans for Hooters Franchisees
SBA lending to franchisees relies on the SBA Franchise Directory, a list of brands whose franchise documents have been reviewed for SBA eligibility. SBA lenders generally require a brand to appear on the directory before making an SBA-guaranteed loan to one of its franchisees.
Hooters is not on the SBA Franchise Directory. In plain terms, SBA 7(a) and 504 loans are generally not available for a Hooters franchise as things stand, so buyers should plan on conventional financing. That is not a judgment about any individual restaurant; it simply means the franchise documents have not been listed. Directory status can change, especially after a change in ownership and a new FDD, so ask your lender to check the current directory when you apply.
If Hooters were added, the SBA 7(a) program could become an option for acquisitions, build-outs and working capital, and the 7(a) program maximum is currently $5 million, though program rules can change.
How Lenders Evaluate a Hooters Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement and typically require a personal guarantee from each significant owner.
Net worth and liquidity. Lenders want a solid equity injection and reserves left after closing. Full-service restaurants with bars carry more operating risk, so liquidity matters.
Industry and management experience. Experience running full-service restaurants and bars, managing large hourly staffs and handling alcohol compliance is often the deciding factor.
Business plan and projections. Projections should reflect sales seasonality tied to sports calendars, the food and beverage mix, labor, liquor liability insurance, royalty and marketing fees, rent and remodel reserves. Our article on preparing a restaurant loan package outlines what lenders expect.
The FDD and franchise agreement. Lenders read the franchise term, renewal and transfer conditions, remodel obligations and any franchisor financing in Item 10. Given the brand’s recent ownership change, lenders may also ask about franchisor support and system stability. Our guide to how lenders read a Franchise Disclosure Document covers the key items.
Site and lease. For leased locations, the lease term and renewal options should cover the loan term, and the landlord’s consent is needed for any assignment.
Historical financials for existing restaurants. Buyers should provide several years of profit and loss statements, sales reports and tax returns, and lenders will compare them with point-of-sale data.
Equipment, Bar and Technology
A Hooters kitchen runs high volumes of fried and grilled food, so fryers, filtration, ventilation and fire suppression are central and wear out on their own schedules. The bar requires coolers, draft systems, ice machines and glass washers. Large-screen televisions and audio systems are part of the guest experience and need periodic replacement. Financing equipment separately can match payments to each item’s useful life and preserve cash for operations.
Multi-Unit Growth and Development
Operators often add restaurants one at a time or acquire several from another franchisee. Once an owner has operating history, lenders can underwrite the existing restaurants’ cash flow alongside the new one. Each additional unit requires franchisor approval and, typically, a separate loan. Development agreements, if offered, set a schedule for opening a number of units, and lenders want to see that the owner can fund each one on time.
Real-World Scenarios
An experienced operator buying a single restaurant. A bar and grill operator buys a Hooters from a franchisee. The lender underwrites the restaurant’s historical results, the buyer’s experience and the liquor license transfer, and finances the purchase with a conventional term loan plus a working capital line.
A multi-unit acquisition. A restaurant group buys several locations from another operator. Financing combines a term loan for the purchase with equipment financing for kitchen and bar upgrades at the older units.
A second-generation conversion. An owner signs a lease on a former sports bar and converts it to the brand. A conventional loan funds the build-out, equipment financing covers the kitchen and audio-visual package, and the owner keeps working capital in reserve for ramp-up.
Common Mistakes to Avoid
- Assuming SBA financing is available for a brand that is not on the SBA Franchise Directory
- Relying on old fee or investment figures instead of the current FDD
- Overlooking liquor license cost and transfer timing
- Underestimating labor, insurance and seasonality in projections
- Signing a lease that is shorter than the loan term
- Skipping questions about franchisor support after the ownership change
For more pitfalls, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Hooters Franchise
Step 1: Request the current FDD. Review Items 5, 6, 7, 10, 17, 19 and 20 with a franchise attorney and accountant.
Step 2: Confirm franchisor requirements. Ask the franchisor about net worth, liquidity, experience and site criteria.
Step 3: Identify the opportunity. Decide whether you will buy an existing restaurant, convert a space or build new.
Step 4: Talk with a financing specialist early. Learn how conventional lenders will size a Hooters franchise loan. Our conventional loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Build projections. Use actual financials for a resale, or a detailed pro forma for a new unit, including seasonality, labor and all fees.
Step 6: Apply and coordinate approvals. Submit the loan package and align it with franchisor approval, the lease and the liquor license transfer.
Hooters Franchise Loan FAQs
How much does it cost to open a Hooters franchise?
The total estimated initial investment appears in Item 7 of the current FDD. Costs depend heavily on whether you build new, convert an existing restaurant or buy an operating location.
What is the Hooters franchise fee and royalty?
The initial franchise fee is disclosed in Item 5 and ongoing fees, including royalty and marketing contributions, in Item 6 of the current FDD. Confirm current amounts there.
Can I get an SBA loan for a Hooters?
Hooters is not listed on the SBA Franchise Directory, so SBA financing is generally not available as things stand. Most buyers use conventional financing. Ask your lender to confirm current directory status.
Does the franchisor offer financing?
Review Item 10 of the current FDD to see whether the franchisor offers any financing. Most owners arrange financing through outside lenders.
Can I buy an existing Hooters restaurant?
Yes, with franchisor approval. Buying an existing location lets lenders underwrite actual results, and the purchase can be financed with a conventional term loan.
Can I finance equipment separately?
Yes. Kitchen, bar and audio-visual equipment can often be financed or leased separately from the main loan.
Is a liquor license included in the financing?
Sometimes. Lenders treat liquor licenses differently depending on the state and how transferable the license is, so discuss it early.
Can a first-time owner get a Hooters franchise loan?
It is harder without restaurant and bar experience. Lenders weigh full-service operating experience heavily, so first-time owners often partner with an experienced operator.
Can I own multiple Hooters locations?
Yes, with franchisor approval. Lenders will look at your existing restaurants’ performance when financing each additional unit.
Does the FDD include financial performance representations?
Review Item 19 of the current FDD to see what it includes. For resales, rely on the restaurant’s actual financial statements.
Final Thoughts
A Hooters restaurant combines a well-known name with the demands of a full-service bar and grill and a franchise system that changed hands recently. Buyers who work from the current FDD, plan on conventional financing, budget for the liquor license and seasonality, and approach lenders with a complete package give themselves the best chance of a smooth closing.
US Professional Funding helps franchise owners and buyers finance acquisitions, build-outs, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
