Hardship at Hooters: Family Feud Drives CEO to Seek Investment Partners
Widow's Settlement Threatens Livelihood of Hooters Girls
In 1984, Robert Brooks and a group of Atlanta-based businessmen bought Hooters from its founders and turned it into a chain; in 2002, Brooks bought majority control of the company and became chairman. In the able hands of the stolid, churchgoing Brooks, the company thrived, using a combination of liberal licensing, NASCAR sponsorship, and frat-boy humor to build a billion-dollar-per-year business with over 400 locations.
But when Brooks died in 2006, Hooters was suddenly in hot water. His will left 30% to each of his children:38-year-old Coby (pictured), and 8-year-old Boni Bell. Of the rest, 10% went to Clemson University, and the remainder was set aside for various other family members. His second wife, Tami, was to have received $1 million per year for 20 years, an offer that she rejected. Instead, she went to court in search of a larger percentage of her dead husband's estate.
Even though the company is based in Atlanta, the pair lived in South Carolina, which has an interesting inheritance law: according to its "elective share" law, widows and widowers can claim one-third of their dead spouses' estates, instead of any bequest that they may have been left in the will.
After three years of courtroom wrangling and exchanged slurs, Coby and Tami settled in late 2009 for an undisclosed sum, which Coby must now raise. While the company may recapitalize to raise money, it seems more likely that it will bring in some outside investors. It has already employed San Francisco investment bank North Point Investors to help them find interested parties with deep pockets.
According to the New York Post, analysts say the company's value was appraised at between $130 and $150 million a few years ago and predict that any bidding war could reach as high as $250 million. Hooters did not return calls seeking comment by press time.
In the meantime, Coby is still working to keep Hooters in the news while maintaining his position as CEO. This upcoming Sunday, he will appear on CBS's Undercover Boss. In preparation for the show, he donned a disguise and went to work at a Texas Hooters. During his tenure there, he worked as a cook, manager, busboy and promotions person. According to report, he also discovered that Hooters -- gasp -- is sometimes a pretty sexist place.
While Undercover Boss is obviously crafted for a mass market audience, it will offer a tantalizing glimpse of Hooters' future: If Brooks successfully deals with his stepmother's claims and manages to retain his leadership of the company, the chain might have a freshly-energized CEO at the helm. If not, it may well join the ranks of lookalike eateries that clog the interstate, like a PG-13 version of Applebee's. Either way, one thing's for certain: with a billion dollars per year in sales, Hooters isn't going anywhere.