Atlanta-based Hooters tests China market

SHANGHAI, China — With futuristic skyscrapers towering above the British colonial architecture of its past, Shanghai would never be mistaken for United States. Except, perhaps, inside the American Owl restaurant.

On a recent afternoon, a dozen customers ate Buffalo wings and hamburgers, watched football games and listened to the sound system blaring “Mustang Sally.”

The American Owl - the Chinese name for Hooters - has capitalized on such trademarks of American culture to prosper in China. Since opening the first American Owl in 2004, owner Jim Li has expanded the chain to five restaurants in three cities.

“Hooters has a great market potential in China,” said Li, who plans to expand further in China, Hong Kong and Macao. “As Chinese get richer, they are looking for restaurants with more atmosphere.”

Atlanta-based Hooters of America hopes that prognosis means a bright international future for the franchise.

Since the first Hooters outside the United States opened in Edmonton, Canada in 1996, the number of international locations has grown to 67 in 26 nations including Mexico, Singapore and Australia.

Next year the number of new international locations is likely to surpass new domestic locations for the first time, said Mike McNeil, marketing vice president for Hooters of America. Currently, about 15 percent of all Hooters restaurants are outside the United States.

The shift has been driven partly by constraints on further U.S. growth. There are currently 384 Hooters restaurants in the United States.

But the Hooters concept - including the tight tank tops and hip-hugging orange shorts worn by Hooters waitresses worldwide - “is not going to appeal to every man, woman and child in the country,” McNeil said. “If you’re looking to continue to grow, you have to look outside of the borders.”

Shanghai is a long way from Hooters origins.

The first Hooters restaurant was opened in 1983, “when six businessmen with absolutely no previous restaurant experience got together and decided to open a place they couldn’t get kicked out of,” according to a Web site set up by the original founders.

Domestically, the company attributes much of its success to its sexy waitresses. Worldwide sales are expected to top $1 billion this year.

But outside the United States an interest in American culture may be as important to attracting customers as the company’s stock-in-trade outfits.

In China, about half of all American Owl customers are foreigners who come to watch U.S. sports and eat comfort food, said Li, who grew up in Shanghai, moved to Las Vegas in 1988 and now splits his time between the China and Greensboro, N.C.

But Chinese are patronizing Hooters in increasing numbers.

As Western culture has become more prevalent in China, “Chinese are more and more interested in trying restaurants like Hooters,” said Wang Huili, a food industry consultant in Shanghai.

While management has added local dishes to the menu to attract more Chinese patrons, “we definitely will keep this an American restaurant,” Li, 46, said. “We want people to come here for the atmosphere.”

Younger Chinese have grown up eating Western foods. Kentucky Fried Chicken opened the first American fast-food restaurant in China in 1987 and other chains quickly followed.

“Younger Chinese are pretty open-minded and they want to try new things,” said American Owl manager Xu Fan.

Similar generational changes are driving the growth of the Hooters brand globally, said John Webber, executive vice president for franchise operations at Hooters of America.

Next year, 23 Hooters restaurants are scheduled to open overseas including the first franchises in Thailand, San Salvador and South Africa.

The company is seeking franchise agreements in 20 other countries. Prospective franchisees should have $2 million “in liquid assets” and be willing to pay a fee of $75,000 to the company, according to the company’s Web site.

For American expatriates, the draw is “to have a place like home” while foreigners tend to be attracted by “part of Americana,” Webber said, adding that the Hooters Girls remain important to the company overseas.

At Hooters of America, executives believe foreign sales could one day surpass domestic sales.

As the franchise expands, “it kind of grows geometrically after a point,” Webber said.