Fortune offers a case study in its August 11 issue of Hooters, the tacky restaurant chain that has shown unexpected legs in its growth over the past two decades. It is, after all, America's tenth-largest full-service restaurant chain, with 2003 revenues estimated at $750 million.
"How on earth, in such a politically correct age, in such a failure-prone business, could Hooters have reached age 20 and still be busting out all over?," Fortune asks. "From a single Florida beach bar, Hooters has expanded to 342 locations (27 of them, ahem, abroad), four lines of retail food, one golf tour, and two car-racing circuits (stock and drag). If you laid out the 30 million pounds of Hooters wings served each year, they'd encircle the globe at the equator. If you piled up the 15,000 current Hooters Girls ... well, they'd really be stacked.
"Even the sky is no longer the limit: Hooters Air started flying in March. It provides service from Newark, N.J., Baltimore, and Atlanta to Myrtle Beach, S.C. Painted in the corporate colors of orange and white, the four 112-seat jets are airborne billboards, with the trademark Hooters owl roosting on their tails. Two Hooters Girls are aboard each flight, emceeing trivia games, hawking Hooters merchandise, and on the whole acting a lot perkier than flight attendants on other airlines who've just taken 20% pay cuts."
There even are plans for a Hooters hotel and casino in Las Vegas, and - we kid you not - "Hooters: The Movie."
In some ways, simplicity is the key to the company's success. "Good food, cold beer, and pretty girls never go out of style," says Bob Brooks, Hooters' CEO.
There's also the issue of creating a differential advantage. The only two companies that are comparable to Hooters are Chili's and Applebee's, the magazine notes, and they both cater to families. While Hooters focuses relentlessly on young (and even not so young) males, a strategy that would tend to limit its customer base, it also sets the company apart.
"How on earth, in such a politically correct age, in such a failure-prone business, could Hooters have reached age 20 and still be busting out all over?," Fortune asks. "From a single Florida beach bar, Hooters has expanded to 342 locations (27 of them, ahem, abroad), four lines of retail food, one golf tour, and two car-racing circuits (stock and drag). If you laid out the 30 million pounds of Hooters wings served each year, they'd encircle the globe at the equator. If you piled up the 15,000 current Hooters Girls ... well, they'd really be stacked.
"Even the sky is no longer the limit: Hooters Air started flying in March. It provides service from Newark, N.J., Baltimore, and Atlanta to Myrtle Beach, S.C. Painted in the corporate colors of orange and white, the four 112-seat jets are airborne billboards, with the trademark Hooters owl roosting on their tails. Two Hooters Girls are aboard each flight, emceeing trivia games, hawking Hooters merchandise, and on the whole acting a lot perkier than flight attendants on other airlines who've just taken 20% pay cuts."
There even are plans for a Hooters hotel and casino in Las Vegas, and - we kid you not - "Hooters: The Movie."
In some ways, simplicity is the key to the company's success. "Good food, cold beer, and pretty girls never go out of style," says Bob Brooks, Hooters' CEO.
There's also the issue of creating a differential advantage. The only two companies that are comparable to Hooters are Chili's and Applebee's, the magazine notes, and they both cater to families. While Hooters focuses relentlessly on young (and even not so young) males, a strategy that would tend to limit its customer base, it also sets the company apart.
- KC's View:
- While the Fortune piece also takes a look at the various management/ownership disputes that have plagued the company, we think the main lesson to be taken from the story (aside from the fact that even Fortune will use sex to sell issues in the dog days of August) is that sometimes limiting the customer demographic has the result of focusing the business - which can be a good thing, especially if you attract customers who aren't being enticed by the competition.
