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He's Giving Hooters A Lift


When you're Robert H. Brooks, chairman of Hooters of America Inc., you don't eat a mesclun salad and grilled salmon for lunch. You don't simply greet the waitress and leave it at that. You start out with a half-dozen wings and move on to a large chili dog. You tease, you flirt, you shout through the din of motorcyclists who have descended upon a Hooters in Myrtle Beach, S.C., during Bike Week. When one of Hooters' famously buxom waitresses yells: "Where's your bike?" you wink and say: "Sold it. Couldn't get any pretty girls to ride on back." And when you leave, you put your arm around another and ask: "Hey, how come you didn't come by my table?"

It's not a job for everyone. But the 68-year-old Brooks certainly has taken to it. Since winning control of the privately held company four years ago, Brooks has dedicated himself to making Hooters -- and its 15,000 Hooters girls -- American icons. The first Hooters opened in Clearwater, Fla., in 1983 as a bar. Now the chain boasts 400 full restaurants (Brooks owns 120 of them outright), stretches from San Diego to S?o Paulo to Shanghai, and, Brooks says, attracts a crowd that is about one-third women -- which can be explained only by the spicy wings. Last year the chain brought in $834 million; 24% of that came from sales of beer, a figure about twice as much as at other casual restaurants. Brooks believes there's room for about 1,000 Hooters, including 200 outside America. That may seem like an awful lot of Hooters, but "I wouldn't bet against them," says Ron Paul, president of Technomic Inc., a Chicago restaurant consultant. "They found a formula that works for them."

To its critics, that's just the problem. As Brooks well knows: "Some people are skittish about doing business with us. I can understand that," he says. But he's certainly not apologizing for Hooters' blatant sexism. "We've got 50 million customers, and we continue to grow. We're more mainstream than most of our critics," he boasts. When asked if his minister approves -- Brooks is a regular at an Episcopal church in Myrtle Beach -- Brooks says: "He eats here! In fact, every minister I've ever had ate at Hooters." Brooks makes sure the chain gives to local charities; the company's Community Endowment Fund has donated more than $8 million to causes from the Special Olympics to the Muscular Dystrophy Assn. It may be a ploy, but it seems to be effective: The company has never been boycotted. Brooks even sent nine Hooters girls on a goodwill tour to entertain U.S. soldiers in Afghanistan and Pakistan.

Brooks's plan for spreading the Hooters name goes well beyond 600 additional restaurants. The two-year-old Hooters Air, which he owns, now flies to 11 cities. According to Transportation Dept. filings, however, it lost $750,000 through September of last year on its commercial service, the latest period for which records are available. For his part, Brooks says that by flying private charters for professional and college sports teams and performing maintenance for other airlines, Hooters Air breaks even. Even if it didn't, analysts believe that the airline serves a purpose: promoting the restaurants. "This is no different from what Richard Branson did with Virgin," says Mo Garfinkle, an aviation consultant in Arlington, Va. "For less than $1 million [in losses], they get a tremendous branding tool for the restaurants."

"THE BRAND HAS LEGS"

That's the idea behind a new hotel and casino in Las Vegas, owned by franchisees who licensed the Hooters name earlier this year. Ditto a line of potato chips, a Maxim-like young men's magazine, and a Hooters-branded credit card. One day, Brooks and his executives would love to start a Hooters cable channel, too, to broadcast everything from his Hooters Girls swimsuit pageants to footage from the various Hooters-sponsored racing circuits. "We clearly think the brand has legs," says Mike McNeil, the chain's vice-president for marketing. Pun intended.

As early as next year, Brooks may move to take part of his empire public. Several top Hooters' franchisees are pushing Brooks to pool some of his restaurants with the 130 they control in a public offering with Oppenheimer & Co. (OPY). "I'm still waiting to see what the numbers look like," he says.

Brooks grew up on a tobacco farm near Myrtle Beach with no running water or electricity. (He still commutes to Atlanta headquarters from Myrtle Beach each week.) After earning a degree in dairy science at Clemson University, he got into the food business: He invented a milkshake formula used by Burger King, and at 30 used $10,000 in savings to form Eastern Foods Inc., which sold nondairy coffee creamer to the airlines. "I picked a big-sounding name because if people had realized how little we were, they wouldn't have bought from us," he jokes. Over the decades, Brooks built Eastern into a $150 million company, now known as Naturally Fresh Foods Inc.

When a friend approached him in 1984 about teaming up to acquire the franchising rights for what was then a small operation in Florida, Brooks wasn't interested. But after enough badgering, he relented. It was only later, he says, that he came to see the potential in Hooters, though he swears it took him longer to realize that the name -- and logo of a wide-eyed owl -- was a double entendre.

Brooks made sweeping changes at the dozens of franchises he came to own, including adding a full menu. But his tinkering put him on a collision course with Hooters' founders. Relations became so acrimonious that by the late 1990s, the founders had sued Brooks not once, but twice. The last suit was eventually settled in 2001 after Brooks paid $60 million for the trademark, which gave him full control over the chain. Now Brooks is determined that his Hooters girls become this generation's Playboy Bunnies. Wings, anyone?

By Dean Foust in Myrtle Beach, S.C.


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