Walking the edge Featured

2:12pm EDT October 24, 2004
Hooters.

Sure, the name has a naughty side, but that is just what Robert Brooks likes about it. It's also what forces the chairman of Hooters of America Inc. to spend much of his time defending the company against less broadminded individuals, and its brand against unscrupulous would-be trademark infringers.

"We understand the name and (its) double entendre meaning," says Brooks. "People ask and talk about it. Do we walk the edge? Yes, we do."

So much so that Hooters' Web site makes this comparison: "The element of female sex appeal is prevalent in the restaurants, and the company believes the Hooters Girl is as socially acceptable as a Dallas Cowboy cheerleader, Sports Illustrated swimsuit model or Radio City Rockette."

And, Brooks adds, "As long as you can do it successfully and with the spirit with which it was intended, we feel pretty comfortable with it."

For those who simply can't get past the "sex appeal" aspect of the restaurant chain, its theme and the name, Brooks offers nothing to try to change their minds. Speaking with a Southern drawl that belies his upbringing in the tiny farm town of Loris, S.C., during the late 1930s and '40s, Brooks has assumed a polished, common sense approach to answering his detractors.

"You can make something good or something bad out of anything you want to," he says. "Most of the people take my side and say it's all in fun. If someone doesn't like what we are, we understand that. But anybody that's ever come into Hooters has been happy with us. You can't please everybody. When you start trying to, you please nobody."

And that's the way it's been since Brooks' association with Hooters began back in 1984. A friend, Hugh Connerty, owned restaurant development rights after buying them from the "Hooters Six," a group of investors that billed themselves as "six fun-loving businessmen, with no experience in the restaurant industry."

At the time, Hooters was in financial straights. Brooks, a successful entrepreneur who'd scored a hit in the food industry, dipped into his pockets to help out a pal. Beyond that, he saw potential in the chain and, a few years later, bought Connerty out.

Under Brooks, from 1990 to 1995, sales quadrupled. In April 2001, he acquired the trademark from its founders and assumed total control of the company. The successful growth notwithstanding, Brooks has not lost sight of the challenges he continues to face.

"We're politically incorrect," he says bluntly then adds, "(But) I don't care who you are, if you can't laugh at yourself a little bit, you've got a problem. We try to portray that, and if someone wants to make fun of that, that's their business."

These days, fun is what it is all about for Brooks. He's in the midst of building a formidable empire by taking the Hooters brand and imprinting it on a vast array of less controversial entities -- including an airline.

The logo, an owl with the Hooters name in bright orange letters, has been seared into the minds of consumers because it is emblazoned across the torsos of the chain's well, busty, waitresses.

But Hooters' name and logo can also be found in more mainstream places, such as the National Golf Association Hooters ProGolf Tour, the United Speed Alliance Hooters ProCup racing series and the Hooters IHRA racing series. There's also Formula One powerboat racing and an AMA Motorcycle Team, and the Hooters Casino Hotel opens next fall.

Brooks' Atlanta-based company boasts more than 375 Hooters locations in 46 states, Argentina, Aruba, Austria, Brazil, Canada, Chile, Guatemala, Mexico, Singapore, Switzerland, Taiwan, Taipei, the United Kingdom, Venezuela and, most recently, Trinidad and Tobago. Of those, his privately held corporation owns 118.

The Hooters system employs more than 25,000 people worldwide, and while Brooks does not release sales figures -- estimates put annual revenue in excess of $350 million -- the company's Web site says that systemwide, the restaurants generate an average 72 percent of their revenue from food, 5 percent from merchandise and 23 percent from beer and wine.

Throw in the fact that Brooks has accomplished all of this while fending off the critics and proving he can make the brand a part of more mainstream America, and it's not hard to see he's hit on a successful, highly scalable formula with continued growth potential.

Friendly flier
Brooks' foray into the struggling airlines industry began last year after he acquired Pace Airlines, a small North Carolina charter company that owned 17 Boeing jets, employed 350 people and specialized in corporate shuttles and business jets, catering to sports teams, VIP business travelers and vacation charters.

Hooters Air is pretty much what you would expect when you hear the name. It features "Club Class" seating and food service, and two of the world-famous Hooter Girls accompany the pilots and flight attendants on every flight.

"So far, it (the airline) has been a lot of hard work," Brooks says. "But it's something I wanted to do. I thought the brand would transcend; we're a known name, a recognized name. The opportunity presented itself, and we thought this was a good time to promote our brand. Our demographic travels a lot, and it's been good. (We got) a lot of notoriety, as we expected."

In fact, Brooks says, he counted on a surge of publicity. Even so, he never assumed the venture would be a success.

"(It was) probably a bit more expensive than we anticipated," Brooks says. "But we've been able to work with it pretty well. We've had a fair amount of fun, and we're flying all over the world."

While Brooks is quick to say he doesn't know much about the airlines industry, it's not much of a stretch to guess that he picked up a thing or two during an earlier venture, Eastern Foods, which provided nondairy creamer to the airline industry.

"All in all, I haven't seen anything that was earthshaking or a surprise," he says. "It's like any other business so far, very predictable."

Then, with a bit of self-deprecation and, one might say, a hedge of his bet, Brooks says, "We're not the smartest people in the world. We don't claim to be that knowledgeable about the airline business. If we don't do too good, we knew we might not."

Savvy entrepreneur
Whether it's restaurants, the airline or one of the many ventures that continue to carry the Hooters brand, Brooks sticks to a consistent belief -- maintaining the control and quality of his products and services is the key to the operations' success.

"It's always a challenge to keep up with everything," he says. "Your brand, the value of it, is the effort you put into maintaining your quality control, whether it's your name, the way it's seen or used, or quality ingredients that go into your product."

Brooks learned that lesson nearly 40 years ago, when he first ventured into the food business. After serving in the Army during the Berlin Crisis (a Cold War tension that ran from 1947 to 1950), Brooks went to work for Germantown Manufacturing Co., a Philadelphia food formula company. He saved $10,000 over a five-year period and used the money to start Eastern Foods, which eventually morphed into Naturally Fresh. Naturally Fresh provides dressings, sauces and dips to consumers and commercial operations, including Hooters restaurants.

Brooks remains chairman and CEO of the $107 million enterprise he founded in 1966 and has major holdings outside the restaurant business, including the USA International Speedway in Lakeland, Fla., and the Whitewater Country Club in Fayetteville. Additionally, he owns a sports merchandising company that produces promotional items for his various ventures.

Today, with the U.S. market well under the spell of Hooters, Brooks has cast his eye to the international market. With restaurants in more than a dozen countries, Brooks says he's careful to work within the nuances of culture that permeate foreign operations. For that reason, he hires local experts to run the restaurants in each country and brings those people to the United States to train them.

"We bring them over here and try to Hooterize them the best we can," he says. "But we will allow them to put 20 percent to 25 percent of their local menu into the menu if it's necessary. "

Opportunity seeker
There is far more to the Hooters brand than restaurants and sporting events. Earlier this year, Brooks launched a line of snack chips with the restaurant's signature hot wings flavoring. The chips are found in vending machines around the country, and more than 1 million bags were sold in the first week, he says.

Brooks also plans to launch a Hooters branded credit card.

"We're always working on something," he says. "There's some television stuff that we're looking at; we don't know what all we'll be doing. We just try to keep our ears to the ground and monitor what's going on."

Of course, having such a recognizable logo does have its downside. Beyond the critics, Brooks says he remains vigilant against those who illegally capitalize on the brand's popularity.

"This is a never-ending problem," he says. "Everybody has rip-offs, I don't care what kind of brand you've got. We are diligent every day and try to control as much as we can. (But) you can't catch them all."

So Brooks does what he can to prevent trademark infringement and tries not to worry too much about the pretenders. Instead, he focuses on the customer. And just looking at the spreadsheets and tallying the sales figures isn't the best gauge of what's truly going on with the company.

"Probably the best gauge is to walk into a restaurant and see how many people are smiling," he says. "As long as people are happy, we're happy. That's the mantra -- 'Hooters makes you happy.' And that's one thing we see. When you walk into Hooters, (you see) smiles on people's faces. We're happy; business is good."

And that, Brooks recognizes, translates into a powerful brand.

"The brand is sort of a culture that we're building," he says. "We're not trying to be anything that we're not. People work hard and they play hard. We just try to capture some of that."

Good corporate citizen
Despite the criticism that his brand attracts, Brooks hasn't forgotten the communities that support his ventures. Accordingly, he makes sure that his company gives something back.

The company operates the Hooters Community Endowment Fund, which raises money for local and national charities such as the Jimmy V Foundation for Cancer Research, Make-A-Wish Foundation, the USO, Special Olympics, Juvenile Diabetes Foundation and Muscular Dystrophy Association.

Since 1992, the foundation has raised and distributed more than $8 million to needy organizations.

"Neighborhood Restaurants is part of our name," Brooks says. "We made the name change about 20 years ago. We're involved in neighborhoods; we try to be very neighborly; we try to be good people."

It's an approach Brooks has emphasized since he took control of the operation.

And Brooks is careful not to tinker with a proven commodity. Anyone visiting the restaurant for the first time in two decades would feel right at home. The atmosphere and menu at Hooters has changed very little since the first restaurant opened this month 20 years ago in Clearwater, Fla.

If Brooks' calculating business style is any indication, it's unlikely that the ambiance of the restaurants will change any time soon. Says Brooks, "I guess if hot chicken wings and good looking girls who serve with a friendly smile at a good price and a good atmosphere goes out of style, then I guess (we) can go out of style."

Until then, he'll continue to walk that fine line between controversy and success the same way he has for more than two decades.

HOW TO REACH: Hooters of America Inc., www.hooters.com