Reported 1 day ago
Hooters is headed for bankruptcy, putting pressure on the whole-business securitization model popular among restaurant chains. The $36 billion market, which allows fast-food franchises to raise capital by securing bonds against future cash flows, may face scrutiny as issues like Hooters' declining foot traffic reveal the risks associated with this financial structure. While investors continue to receive interest payments, they might have to allow delayed principal repayments to avoid jeopardizing the company's financial stability. This situation underscores the challenges of treating businesses as asset-backed securities, limiting flexibility when they encounter financial difficulties.
Source: YAHOO