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Attributes give Hooters a sporting chance in emerging markets


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Hooters restaurant

A new Hooters restaurant in South Africa has a grander feel than those in the U.S.

Hooters has a head start when it goes into emerging markets—name recognition, thanks to TV and movies; good-paying server jobs; and a wide world of sports.

There’s a good reason why an iconic brand like Hooters does well in emerging markets like South Africa, and even in Brazil. No, it’s not the curvaceous Hooters girls, it’s the flat-screen TVs. 

While Americans take their personal plasma television sets for granted, the rest of the emerging world doesn’t always have the luxury of staying home to watch sporting events. Which is why Hooters in these markets are more than just a pretty face. For instance, in one market: “Here’s a guy in his mid-40s, a CFO (with an) MBA, who was blown away he could watch four soccer games at one time,” says Michael Pruitt, CEO of Chanticleer Holdings, an international franchisee of Hooters of America, with rights to develop the brand in four emerging international markets. 

Sports on TV is just one reason Hooters is hot in emerging markets. Some of the changes they’ve made to accommodate the local market are: better wine selection; steak on the menu in Brazil; and kids eat free on Sundays in South Africa. Plus, the tip money is good. In one market, an employment ad posted on Facebook garnered 300 applications for three positions. 

A down side is security becomes an additional line item to your P&L. In locales where crime is an issue, location becomes even more important, and restaurants need to be inside shopping centers and casinos—areas where people feel safe, Pruitt says.

Chanticleer owns and operates four Hooters in South Africa and one in both Australia and Hungary. They expect the number of restaurants to be 10 by the end of 2013. The company also has exclusive rights to parts of Brazil, and has entered into a joint venture with the company with exclusive rights to Australia. 

Brazil will be a particularly fertile territory for Hooters, since it’s hosting the World Cup in the summer of 2014 and the Olympics two years later.

Finding qualified, financially viable partners overseas is always a challenge. Another source to add to your due diligence, Pruitt suggests, is the local vendors, who will be able to tell you whether the restaurant group you’re thinking about partnering with pays its bills on time and takes care of its restaurants and employees.

Beer and liquor distributors also are invaluable when it comes to researching a market. “They have great data,” he adds.

It’s a matter of looking for “good businesses run by good people you like.” 

And it doesn’t hurt to have 17,000 Hooters girl worldwide, sports such as soccer and rugby on the telly and brand awareness thanks to TV shows and movies with characters visiting Hooters. Having an actual restaurant to promote the concept in these emerging markets is like adding color to a B&W TV.

 

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