Nashville-based hot chicken concept Party Fowl, founded in 2014 and counting six brick-and-mortar locations, filed for bankruptcy protection last week, citing continuing pressures from Covid and “a snowball of debt,” according to The Nashville Post. The company’s owners, Austin Smith and Nick Jacobson, are hoping to use the financial restructuring to return to operational health, the Tennessean reported.
Party Fowl restaurants are located in Nashville, Murfreesboro, Donelson, Franklin, and Chattanooga, Tenn., as well as Destin, Fla. The company also has licensed locations at the Nashville International Airport and Nissan Stadium, as well as a catering and private events business. It specializes in Nashville Hot Chicken, gumbos and salads, boozy slushes, and local beers.
The company’s filling comes despite the rising popularity of Hot Chicken and meteoric growth of concepts such as Dave’s Hot Chicken, Hot Chicken Takeover, and Houston TX Hot Chicken. Hot chicken menu offerings have nearly doubled since 2018, according to Technomic Ignite data.
As Fitch Ratings senior directors cautioned during last week’s ICR Conference, brands with strong and healthy balance sheets are best positioned for 2024, but those without will be challenged by lingering post-Covid bumpiness. Bankruptcy filings reached the highest annual total on record for private equity and venture capital-backed companies in the U.S. in 2023, according to S&P Global Market Intelligence data. Overall, U.S. corporate bankruptcy filings reached a 13-year peak last year. Among the filings were franchisees for Wendy’s, Burger King and Hardee’s.
With such a backdrop, Party Fowl won’t likely be the last filing this year. It may not even be the last one this month as cracks start to grow elsewhere. Analysts have predicted continued bankruptcies this year due to lingering inflation and stubbornly high interest rates. That said, those challenges are expected to ease by the latter part of the year.
Contact Alicia Kelso at [email protected]