Salvadorans who like to order chicken wings from a busty woman in a skin-tight tank top top will now have to go to Pollo Campero and hope for the best. That's because Hooters, the "delightfully tacky" chicken-and-boob joint, has boarded up its El Salvador restaurant due to concerns about violence and insecurity.
By closing its franchise in San Salvador, Hooters becomes the first U.S. chain to pull out of El Salvador over concerns about lawlessness. Violence has been spiking in recent months as a failed truce devolves into open war between gangs and the government. Though it's not exactly clear what triggered Hooters' decision to pull up stakes, the head of the country's largest business chamber suspects the restaurant was being extorted by gangs.
Hooters, for its part, was intentionally vague in its hasty goodbye note to clients. "We wish to inform the Salvadoran population that for reasons beyond our control, as a consequence of the situation of violence and insecurity, they have asked us to temporarily close the operations of Hooters El Salvador," the restaurant's management said in short message posted to Facebook. They, supposedly, refers to Hooters corporate.
The restaurant chain promised to pay severance to all its employees, thanked its clients for their patronage, and added —with a touch of strange cheer—"come visit us in Guatemala." Then they turned off the fryolator and bolted for the airport.
Fusion asked Hooters headquarters if the decision to close the El Salvador restaurant was due to gang extortion, or if there's ever been another case of the franchise shuttering one of its 400 restaurants worldwide due to security concerns. Hooters' thought about it for 24 hours, then replied with no comment. Phone calls to the closed San Salvador restaurant rang unanswered.
The whole situation smells suspiciously familiar to Luis Cardenal, president of El Salvador's largest business chamber, known as CAMERASAL by its Spanish acronym. Cardenal says he suspects extortion.
And he should know. Cardenal says racketeering has become so widespread in El Salvador that his business chamber loses an average of two companies per week due to gang extortion.
The smaller the business, the more vulnerable it is to criminal activity. A total 90 percent of small and medium-sized businesses in El Salvador pay extortion to the Mara Salvatrucha or Barrio 18 gangs, according to the National Small Business Council. That comes out to $18 million in annual "war tax" payments, just from from the pockets of small business owners.
"In El Salvador, impunity rules," Cardenal told Fusion in a phone interview from San Salvador. And in a country where more than 90 percent of murders go unsolved, "it makes you wonder what is the real impunity rate is for extortion" and other lesser crimes, he said. In many cases, he added, businesses don't even bother reporting instances of extortion due to fear of reprisal and a mistrust of police.
The anti-extortion unit of El Salvador's National Civil Police (PNC) says it has no record of Hooters ever filing a complaint with police.
"I don't know why they made the decision to close, but I don't think it was due to violence and insecurity because the zone where the restaurant was located doesn't have much crime. Plus, there are other foreign businesses in that area that are not being extorted," police inspector Ricardo Antonio Ruballo, deputy director of the PNC's anti-extortion unit, told Fusion in an email.
Ruballo says very few foreign companies have filed complaints of extortion, and he estimates the real number of small and medium-sized Salvadoran businesses that are being extorted is closer to 75 percent.
"It's not true that every business is closing because of extortion; there are only sporadic cases of that happening," said Inspector Ruballo. He added that the police's Special Anti-Extortion Unit is working closely with the U.S. Embassy to combat racketeering.
Cardenal remains suspicious. He says Hooters' "discreet" and hasty exit suggests extortion.
Violence and insecurity, Cardenal says, usually means one of two things in El Salvador: either a company is being robbed, or extorted. In Hooters' case, he says robbery seems unlikely; it was never something the restaurant complained about to police or the business chamber, Cardenal says. That leaves extortion, which is often an underreported and silent crime because companies are afraid to squeal, Cardenal explained.
The business chamber boss says the modus operandi of gang extortion is evolving, and has almost become normalized. He says a few years ago the gangs would arrange for businesses to do money drops in remote areas, then pick up the duffle bag when no one was looking. Then gang members started visiting businesses to make their collections in person. Now, he says, it's become common for business owners to make weekly extortion payments digitally in the form of mobile phone minutes.
What's novel about the Hooters' hoopla is that it suggests the gangs are now feeling emboldened enough to target international chains, not just the small mom-and-pop operations that represent the traditional prey for extortionists. It also suggests that the gangs' are venturing out of their hoods to target businesses operating in upscale commercial areas that were once considered "safe" zones, rather than just hitting up vendors and transportation companies that pass through gang-controlled territories.
Cardenal says the takeaway from Hooters' abrupt departure is that the issue of insecurity in El Salvador has become "a serious problem that requires an urgent solution because it's an issue that now affects everyone."
"Clearly the problem is more intense in certain sectors where the gangs have territorial control, but no one is free from the possibility of something like this happening at any moment," Cardenal lamented. "The economy is a living organism. If something has a negative effect on one part of the economy, it can have a negative impact on the entire system. If I stub my big toe, it doesn't just affect my foot, it affects the way I walk. And if the toe gets infected and is not cured, it could kill me. It's the same with the economy."
For a guy whose job is to promote El Salvador's business climate, Cardenal says, that's a painful thing to admit.