Hooters Franchise Agreement In Brazil Expanded

Tuesday, December 03, 2013

Spring opening expected in Rio de Janeiro

Chanticleer Holdings Inc. (NASDAQ:HOTR), an operator of international Hooters restaurants, has expanded its franchise agreement in Brazil and set its sights on a spring opening for a location in Rio de Janeiro, the Charlotte-based company said Wednesday.

The 300-seat Rio de Janeiro store is slated to open in April 2014 and is expected to become one of the highest-grossing Hooters restaurants outside the U.S., according to a news release from the local holding company.

"The sports events that will take place in 2014 (World Cup) and 2016 (Olympic Games) will considerably drive the market, including the food and beverages sector," says Marcel Gholmieh, a partner in all Hooters units in Brazil. "Furthermore, the (Rio de Janeiro) store's profile has everything to do with the 'cariocas' lifestyle." Three Hooters stores are already in operation in Sao Paulo, with the Hooters Vila Ol�mpia in that market being one of the top-grossing overseas Hooters in 2012.

The Rio de Janeiro store will be Brazil's first outside of Sao Paulo and is the first to be developed under Chanticleer's newly expanded franchise agreement with Hooters of America Inc., the privately held parent company of the Hooters brand.

That agreement between Chanticleer & Wings Brasil Foods Participacoes Ltda., a newly formed joint venture of which Chanticleer owns 60 percent, and Hooters of America expands the footprint for potential restaurant locations from three states in Brazil -- Rio de Janeiro, Minas Gerais and Espirito Santo -- to five states, including GOIAS and Curitiba-Parana. It also raises the number of units to be developed from five to seven.

"The new franchise agreement displays confidence in our ability to expand the Hooters brand in Brazil," says Mike Pruitt, president and CEO of Chanticleer. "We look forward to opening the Rio de Janeiro location in time for the 2014 FIFA World Cup." Chanticleer's rapid expansion overseas is part of a strategy laid out last year, when it raised $11.2 million in a public stock offering. The company already operates Hooters restaurants and holds rights for expansion in several international markets, including South Africa, Hungary, Australia and the United Kingdom.

Pruitt recently told the Charlotte Business Journal that Chanticleer needs to have 10 to 12 restaurants up and running in order to be profitable, and that the firm will likely turn its first profit next year.

Aside from its Hooters ventures, Chanticleer operates the local American Roadside Burgers chain and owns a majority stake in Just Fresh restaurants. Earlier this week, the company announced it has obtained a minority stake in Beacher's Madhouse, a performance theater and nightclub facility that's opening soon in the MGM Grand Hotel & Casino in Las Vegas.

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