Monday, July 15, 2024

NYC’s Sticky’s Finger Joint Files for Chapter 11 Amid Pandemic Pressures and Inflation


NYC-based Sticky’s Finger Joint files for Chapter 11

Sticky’s Finger Joint, a well-known fast-casual chicken tender concept, has filed for Chapter 11 bankruptcy protection. The chain, which originated in New York City, cited the pandemic and inflation as pivotal factors behind its financial struggles. The filing occurred on April 25 in the United States Bankruptcy Court for the District of Delaware, signaling a move to reorganize its financial structure in hopes of securing a more prosperous future.

Since its inception in 2012, Sticky’s Finger Joint has established a substantial presence in the region, with nine locations in New York and three in New Jersey. According to Chief Executive Officer Jamie Greer’s affidavit of support, the company is determined to keep its operations running. It seeks court approval to continue paying its employees and maintain specific customer-oriented programs, despite its financial setbacks.

Branded as “New York City’s finest gourmet chicken finger restaurant,” Sticky’s Finger Joint has experienced significant growth over the past decade, with sales escalating from $500,000 in 2013 to approximately $22 million by 2023. However, the financial climate has been less than favorable recently, with rising costs for chicken and potatoes leading to menu price increases and negatively affecting the business.

The challenges have been compounded by a reliance on third-party delivery services, which tend to be less profitable, and reduced in-person work weeks in key office districts within New York City. Furthermore, the company has been entangled in legal battles that have further drained its finances.

Among its legal struggles, Sticky’s Finger Joint faced a significant lawsuit from the landlord of its former New York corporate headquarters in 2021, resulting in a $600,000 judgment for breaching its lease agreement. Additionally, the chain was sued by South Carolina-based barbecue chain Sticky Fingers over trademark infringement in 2022. These legal issues have only added to the company‚Äôs financial burden.

In a bid to revive its business, Sticky’s has experimented with various growth strategies in recent years. This includes the introduction of a ghost kitchen in Philadelphia and an attempt to expand through franchising, which ultimately did not meet expectations. The company made its debut in New Jersey five years ago, expanding to locations in Paramus, Hoboken, Bridgewater, and Union.

Despite previously operating 16 outlets across the metropolitan region, Sticky’s had to close four locations since 2021 due to financial struggles. These closures included two venues in New York City, the Philadelphia ghost kitchen, and the Bridgewater store.

CEO Jamie Greer noted that the chain’s cash flow has seen steady improvement but acknowledged that the business is still grappling with “the financial burdens and new business realities” brought on by the COVID-19 pandemic. To alleviate immediate financial pressures, Sticky’s secured around $2.4 million through equity financing and converted notes in February.

In its Chapter 11 petition, the company reported having $500,000 to $1 million in assets against liabilities of up to $10 million. Among its largest creditors are distributor U.S. Foods, alongside various real estate and law firms.

In his statement, Greer expressed optimism about Sticky’s future, “The Debtors look forward to working with their creditors, vendors and other parties in interest as they chart a path to restructuring their balance sheet, realizing their full economic potential for the future, and continuing to provide their customers with the delicious meals they desire for years to come.” Despite the financial hurdles, the silence from Sticky’s representatives on the matter leaves room for speculation on the future steps and strategies the chain might employ as it navigates through its bankruptcy proceedings.

Natalie Kimura
Natalie Kimura
Natalie Kimura is a business correspondent known for her in-depth interviews and feature articles. With a background in International Business and a passion for global economic affairs, Natalie has traveled extensively, providing her with a unique perspective on international trade and global market dynamics. She started her career in Tokyo, contributing to various financial journals, and later moved to London to expand her expertise in European markets. Natalie's expertise lies in international trade agreements, foreign investment patterns, and economic policy analysis.

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