Hooters of America, Inc. - Company Profile, Information, Business Description, History, Background Information on Hooters of America, Inc.

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History of Hooters of America, Inc.

Hooters of America, Inc. operates and franchises a chain of casual restaurants that feature waitresses known as Hooters Girls. The first Hooters Restaurant opened in Clearwater, Florida, in 1983. The concept was licensed in 1984 to Hooters of America, and by 1996, there were nearly 200 Hooters restaurants nationwide and systemwide sales had reached more than $300 million.

The first Hooters restaurant was opened on April Fools' Day in 1983 in Clearwater, Florida, by six friends and businessmen, none of whom had any experience in the restaurant industry. As Gil DiGiannantonio, one of the partners, told Florida Trend magazine three years later, after Hooters had become a roaring success, they were "a bunch of guys who got tired of going to fern bars." Apocryphally, the six combed Clearwater Beach searching for attractive young women who were interested in becoming the first Hooters Girls.

In addition to DiGiannantonio, a sales representative for a liquor distributor, the other founding partners were: L.D. Stewart and Dennis Johnson, also partners in a general contracting business; Kenneth Wimmer, who had worked for Stewart and Johnson before starting his own paint business; Ed Droste, owner and chief executive of a resort development business, and William Ranieri, a former service-station owner who had retired to Florida. Stewart was the majority owner.

Free Publicity Launches the Concept, 1984

The restaurant struggled for almost a year before receiving a fortuitous break in the form of free publicity. In January 1984, Tampa hosted the National Football League Super Bowl between the Los Angeles Raiders and the Washington Redskins. John Riggens, then a star running back for the Redskins, ate lunch at Hooters the day before the game. After the Super Bowl, he returned with several teammates for a midnight snack. With the resulting media attention, Hooters quickly went from grossing $2,000 a night to nearly $4,000.

In 1984 the original owners, who had formed Hooters of Clearwater, Inc., sold expansion and franchise rights to Neighborhood Restaurants of America, a group of Atlanta investors, who formed Hooters of America, Inc. Hooters of Clearwater received 10 percent of Hooters of America and 3 percent royalties on all Hooters sales. Hooters of Clearwater also retained the final say on restaurant design and menu, and the right to build Hooters restaurants in Pinellas and Hillsborough counties in Florida.

Within two years, Hooters had become a $16 million chain with nine restaurants in Florida and two in Atlanta. By 1991, there were more than 50 Hooters restaurants and Hooters of America had revenues of more than $100 million. The chain had reached more than 100 restaurants and $200 million in revenues by the end of 1993.

Hooters continued to thrive on free publicity. When the Soviet national boxing team was in Tampa to fight the Americans in the summer of 1986, the Soviets ate dinner at Hooters. The next day, the Tampa Tribune ran a full color picture of a Russian boxer eating chicken wings with a Hooters Girl, wearing a tight-fitting Hooters T-shirt, standing next to him. In July 1986, the first Hooters girl, Lynne Austin, was Playboy magazine's Playmate of the Month. The men's magazine also included a small article about Hooters and some of the pictures showed Austin in a Hooters outfit. Droste told Florida Trend, "We were already doing well at that point, but (the Playboy article) was important because it gave us our first national exposure."

But probably the greatest marketing coup came in 1995 when Hooters of America hired a hairy male actor and dressed him in a Hooters waitress outfit to poke fun at allegations that Hooters restaurants discriminated against men. Hooters of America ran full-page advertisements showing "Vince" in USA Today and the Washington Post. But more importantly, according to then vice president of marketing Michael McNeil, television camera crews showed up at every Hooters restaurant in the U.S. the same day to do local stories.

Hooters Girls: The Real Secret to Success

Hooters of America liked to boast that "Hooters is to chicken wings what McDonald's is to hamburgers." But the Hooters Girls, not the restaurants' food or drink, were always the essence of the Hooters concept. Hooters restaurants hired young, attractive women as waitresses and dressed them in orange running shorts--"sized to fix comfortably," according to corporate literature--and white tank tops or T-shirts. Hooters of America readily acknowledged that "the concept relies on natural female sex appeal" and the waitresses were encouraged to sit down and chat with the predominately male clientele.

Hooters Girls also made celebrity appearances at sporting events and charity functions, and were pictured on billboards, trading cards, and calendars. Hooters of America published a glossy Hooters Magazine that featured Hooters Girls in everything from swimsuits to evening wear. According to the corporate literature, Hooters Girls were expected to "always maintain a prom-like appearance with hair, make-up and nails done neatly. Hooters Girls should project a positive attitude with a bubbling personality and the prettiest smile in the world."

Although the founders of the original Hooters in Clearwater always insisted the name referred to an owl in the restaurant's logo, they did so tongue-in-cheek, and it was a claim that few people accepted. "Obviously the name is a double entendre," McNeil told Business First, a Columbus, Ohio, business newspaper in 1994. "Hooters is an innocuous slang expression for a part of the female anatomy. We don't deny that. We also realize that most people believe that that is the case." Critics of the name and concept dubbed Hooters the nation's first "breastaurant."

The 1990s and Battles with the EEOC

In 1996, the American Spectator noted that Hooters featured "socially adept and lightly dressed young women who delight a generally beefier crowd of male patrons by simply feeding them from a reasonably priced menu. It is a simple but successful concept, one that would offend only the worst sort of prig." But offend it did.

Women's groups expressed outrage at the skimpy Hooters Girls uniforms. Hooters restaurants were also forced with some regularity to defend themselves against allegations of sexual harassment. In the most high profile case, three former waitresses at a Hooters franchise operated by Bloomington Hooters Inc. at the Mall of America in Minnesota filed suit in 1993, claiming they had been fondled and verbally abused by male employees at the restaurant. Representing the waitresses, attorney Lori C. Peterson, who also sued the Stroh Brewery Co. over its controversial Swedish Bikini Team commercials, went on television talk shows to denounce the Hooters concept. Among her demands were that Hooters change its name and uniforms.

But in an interview with Corporate Report Minnesota, attorney Lisa A. Gray, hired by the restaurant, countered, "For me to deny that sex appeal is part of the concept, part of what's happening at Hooters, would be ludicrous. But I've always thought feminism is all about choice. If people are offended by Hooters, they should vote with their feet. Don't go to the restaurant to eat. Don't apply to work at it." Hooters of America also denied that Hooters restaurants fostered a "hostile environment" for women and publicly stressed a strict corporate policy against any form of sexual harassment. The suit was eventually settled out of court.

Hooters restaurants also attracted the attention of the Equal Employment Opportunity Commission (EEOC), which launched an investigation in 1991 into alleged discrimination because Hooters refused to hire male waiters. In an 80-page finding released in 1994, the EEOC determined that "no physical trait unique to women is required to service food and drink to customers in a restaurant." The EEOC demanded that Hooters of America pay $22 million to men who could show they had been denied jobs because of their gender. The agency also demanded that Hooters establish a scholastic fund "to enhance the skills, employment opportunities or education of males."

The EEOC findings were generally ridiculed by the news media and a public that had grown skeptical of government interference, especially since the EEOC had a backlog of seemingly more serious cases. Bureaucracy watchdog James Bovard, writing in the Washington Post, responded, "What sort of education program did the EEOC have in mind? Teaching the new male hirees how to flirt with burly construction workers without getting punched in the nose?"

Hooters of America argued that Hooters Girls, in addition to food service, provided entertainment, which entitled the restaurants to an exemption from equal employment laws under the "Bona Fide Occupational Qualification" section of the Civil Rights Act. Forcing Hooters to hire men as waiters, the restaurant chain said, would be like forcing Radio City Music Hall to hire male Rockettes for its famed chorus line.

In a more serious vein, McNeil explained that "Hooters Girls have been the essence of our business since the first store opened in 1983," and pointed out that Hooters employed men as cooks and in management positions. Hooters fought back with a $1 million publicity campaign, featuring "Vince," the hirsute waiter in a skimpy Hooter's outfit, designed to ridicule the EEOC. Under the headline "What's wrong with this picture," the newspaper ads complained, "The Equal Employment Opportunity Commission is wasting taxpayers dollars, ignoring its mission, and setting aside the interests of individuals with real discrimination claims in an effort to force Hooters Restaurants to hire men to be Hooters Girls. This excessive government interference threatens Hooters business and the jobs of more that 13,000 employees. Taking away jobs from Hooters gals to hire men is unfair and it's just plain ridiculous."

Tad Dixon, then public relations manager for Hooters of America, told Nation's Restaurant News that his office received more than 500 telephone calls the day the campaign broke. Hooters of America also coordinated a "March on Washington" with a rally at Freedom Park in Washington, D.C., where more than a hundred Hooters Girls carried placards with such slogans as "Men as Hooter Guys--What a Drag."

In addition to the newspaper ads, Hooters used "Vince" on billboards, other print materials, and even on its radio commercials. In a brief statement, the EEOC called the public relations campaign an effort "to intimidate a federal law enforcement agency, and, more importantly, individuals whose rights may have been violated." But, eventually, the EEOC dropped its demands and the investigation. In 1996 Gilbert F. Casellas, then chairman of the EEOC, sent a letter to the U.S. House subcommittee on employment in which he concluded "it is wiser for the EEOC to devote its scarce litigation resources to other cases."

In 1996 the privately owned Hooters of America operated 57 Hooters restaurants and franchised 135. Of the more than $300 million in revenue generated systemwide, Hooters of America said 65 percent came from the sale of food, 30 percent from the sale of beer and wine, and 5 percent from Hooters merchandise, including Hooters Girls trading cards. Restaurant & Institutions ranked Hooters as the 75th largest food-service chain in the United States, and 11th among casual, dinner-house restaurant concepts.

Additional Details

Further Reference

Brovard, James, "The EEOC's War on Hooters," Wall Street Journal, November 17, 1995, p. A18."EEOC's Politically Correct Crusade Against Hooters a Wasted Effort," Nation's Restaurant News, December 4, 1995, p. x.Grimsley, Kristin Downey, "Hooters Plays Hardball with the EEOC," Washington Post, December 10, 1995, p. H1.Hagy, James, "How Big Can Hooters Get?" Florida Trend, September 1987, p. 80.Hayes, Jack, "Hooters Comes Out Against EEOC's Sex-Bias Suit," Nation's Restaurant News, November 27, 1995, p. 3."Hooters Vs. the EEOC, Seattle Times, May 6, 1996, p. B4.Prewitt, Milford, "Hooters Unit Sued for Harassment," Nation's Restaurant News, May 3, 1993, p. 3.Segal, David, "Hooters Vows to Decide Where the Boys Aren't," Washington Post, November 16, 1995, p. B11.Shiflett, Dave, "Hooters Gals," American Spectator, July 1996, p. 48.Wieffering, Eric J., "Defending Hooters," Corporate Report Minnesota, September 1991, p. 52.Wright, J. Nils, "Hooters Eatery is Coming to Town with Controversial Fare," Business Journal (Sacramento, California), April 25, 1994, p. 8.

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