Full-service brands like Hooters were already seeing the potential in counter-service prototypes. Then came COVID-19.

Full-service restaurants have been familiar with the potential in limited-service prototypes for some time. Major names like Cracker Barrel, Applebee’s, and IHOP have even tried their hand at the segment over the past few years, developing fast-casual spinoffs.

But COVID-19 especially proved the potential in a limited-service, and particularly off-premises, business model. And now full-service brands are doubling down on fast-casual prototypes that can especially fulfill on-the-go and delivery orders.

That includes wings concept Hooters, which started thinking about the quick-serve segment six years ago. “The idea was propagated and worked on for a couple of years,” says Neil Kiefer, CEO of Hooters Management Corporation, a licensee based in Clearwater, Florida.

“One of the things we noticed in our Chicago landmark—we had 12 Hooters there at the time—[is that] several of those stores had an excess of 20 percent of revenue as to-go, and these were very high-volume casual restaurants. So we saw there was a real market for to-go.” He adds that across the system’s 28 stores, the licensee was averaging about 14 percent takeout business.

As Hooters Management Corporation saw the possibility for the brand to exist in the fast-casual space, it offered Hooters of America—the parent group that operates most of Hooters’ brick-and-mortars—a deal. Hooters Management Corporation would debut a small-scale version of Hooters, which Hooters of America could implement if the venture was successful. The groups came to an agreement, and in 2017, the first Hoots Wings opened in Chicago.

To bring Hoots Wings to life, the group applied the top 14 items to a counter-service format, with the focus remaining on Hooters’ wings served in all four of its styles—naked, breaded, smoked, and fried. Hoots’ storefront also shrunk, with a footprint goal of 1,300–1,800 square feet per location. It optimized the kitchen space by utilizing only two primary pieces of equipment to operate the restaurant, and it partnered with third-party platforms early on to make the brand delivery-friendly.

The Hoots Wings experiment seemed to work, as the initial Chicago location saw sales climb every year. Kiefer estimates about a 10 percent growth average in the last three years, with the original location bringing in $2.2 million in revenue last year.

“The initial thought back at that time was trying to get the fast-casual format, which we could expand,” he says. “We knew we’d attract some people that hadn’t been familiar with Hooters. But we also knew that our loyalists to our food product would also like it. So it was really in part to expand the target market.”

Hooters Management Corporation had two Hoots Wings locations open by the time COVID-19 hit, and the pandemic created an even bigger boom in delivery sales. Kiefer says takeout across the licensee’s Hooters locations ballooned to about 70 percent of sales even when dine-in was open—a statistic that encouraged the group to open two more Hoots during the pandemic.

Though Hooters and Hoots Wings offer similar menus, Kiefer says each has its own advantages. While the lower cost of investment is a big draw for Hoots, Hooters rakes in better sales when at full dine-in capacity. Still, Hooters Management Corporation plans to open two to four Hoots locations per year in the foreseeable future.

The numbers back up this strategy. According to data from The NPD Group, off-premises consumption at full-service restaurants shot up 91 percent between June of 2019 and 2020, just as dine-in business fell 62 percent. And to Hoots’ benefit, chicken wings have proved fertile ground; GrubHub estimates chicken-wing sales grew 287 percent last year.

Hoots now has seven storefronts open between corporate and franchisee. And at the end of last year, Hooters of America announced plans to franchise the counter-service model, with close to 80 units under letter of intent.

“Once we did that first test model, it became evident that it matched up with what the consumer was seeking,” says Hooters of America CEO Sal Melilli.

Since opening Hoots up for franchising, Melilli says there has been significant interest, especially among multiunit operators with experience in other food brands who are looking to add chicken wings to their portfolio.

Melilli hopes to open 17 Hoots locations by the end of 2021, but says the number may be a moving target.

“Coming out of the pandemic, we’ve been able to be more nimble—whether that’s on the Hooters side or the Hoots side,” Melilli says.

Casual Dining, Chain Restaurants, Feature, NextGen Casual, Hooter's