FDD Items 3 & 4 · 2026 filing
Hooters litigation history
What Hooters disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- $190K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
Franchisor itself has no pending or concluded litigation. Predecessor/affiliate litigation: (1) HOA Franchising, LLC v. MS Foods, LLC and Mahmood Saifie (N.D. Ga., filed 2023) for breach of contract/trademark infringement after a terminated franchisee continued operating; case administratively closed due to Predecessor's 2025 bankruptcy. (2) Owl's Eyes entities v. Hooters of America, LLC (Cobb County, GA Superior Court, filed 2011) alleging wrongful termination; settled in 2018 for $190,000 with no admission of liability.
Disclosed in the 2026 Franchise Disclosure Document
Item 4: bankruptcy
Predecessor (HOA Franchising, LLC) and numerous affiliates filed voluntary Chapter 11 bankruptcy petitions on March 31, 2025 in the U.S. Bankruptcy Court for the Northern District of Texas (lead case In re Hooters of America, LLC et al., Case No. 25-80078). A restructuring/sale plan was approved October 30, 2025 and became effective October 31, 2025, resulting in sale of some restaurants to Hoot Owl and Hooters, Inc., closure of remaining company-owned restaurants, brand management transferred to Hooters Brand Management, LLC, and discharge of debtor debts. Officer Sal Melilli was an officer of Predecessor/affiliates at time of filing.
Disclosure signals that moved the score
How this shows up in the verdict
- Multiple litigation cases involving breach of contract, abandonment, and financial obligation failures suggest operational and legal instability
- Going Concern status is FALSE, indicating potential financial viability concerns at corporate level
- Litigation pattern includes franchise failures (unauthorized abandonment) indicating franchisee distress
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?