Has Hooters found its wingman?

November 24, 2010, 3:16 AM UTC

Private equity firm Wellspring Capital Management is in talks to buy Hooters of America Inc., franchiser of more than 400 beer, boobs and wings establishments throughout the world.

Fortune has learned that the process began nearly a year ago, with North Point Advisors representing the Atlanta-based company. No info yet on financial terms, although the company is believed to generate around $1 billion in annual revenue.

“It’s a very tricky deal,” says a private equity investor whose firm took at least an initial look. “I’m not saying it can’t be done, just that it isn’t cut-and-dry.”

One of the complications is that Hooters of America doesn’t actually oversee all current Hooter’s locations. A small handful of stores — including one in Manhattan — are owned by a Clearwater, Fla.-based company called Hooters Inc. Same goes for the eponymous hotel and casino in Las Vegas.

Another is that the selling party would be a disputed estate, rather than an individual or other financial sponsor. Hooters of America was formed in 1984 when a man named Robert Brooks bought franchising rights from the Clearwater, Fla.-based founders, and quickly expanded it into a global casual dining empire. As he told Fortune back in 2003, “Good food, cold beer and pretty girls never go out of style.”

But Brooks died in 2006, soon after which began a battle over his estate.

On one side was Brooks’ wife Tami, who wanted one-third of the estate and argued that she has been denied information and monthly payments. On the other was Brooks’ son from a previous marriage, Coby, who serves as both estate administrator and Hooters CEO (you might have seen him earlier this year on Undercover Boss). As part of their settlement earlier this year, the two sides agreed to solicit bids for Hooters of America.

It is unclear if Wellspring would keep Brooks in charge, or bring in its own management (my guess is the former, but it’s only a guess).

Wellspring declined comment, while Hooters did not return our calls.

Here’s how Hooters got its start:

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