Welcome To DWT Listing Theme
In a story unfolding since 2017, Dave’s Hot Chicken exploded from its $900 launch into a 10-figure enterprise. Roark Capital Group had been monitoring the brand since about 2021, according to The Wall Street Journal, which reported that Dave’s executives joked they had a private-equity stalker. Earlier this month, Roark took majority ownership of the spicy fried chicken brand in a deal Reuters reported at approximately $1 billion.
Dave’s growth has been astounding. Three longtime friends – chef Dave Kopushyan, Arman Oganesyan and Tommy Rubenyan – used portable fryers and folding tables to debut Dave’s Hot Chicken in a California parking lot some eight years ago. The concept quickly took off, so the founders, plus Rubenyan’s brother Gary, soon opened an East Hollywood brick-and-mortar restaurant.
For more information visit Dave’s Hot Chicken City Menus.
All Dave’s locations are mind-bending by design: “As soon as you walk through the door of a Dave’s Hot Chicken, you see all the things that make it unlike other restaurant chains,” a Journal writer observed. “The simple menu. The walls covered in murals and splattered with graffiti. The range of spice levels topped by Reaper, which is so hot that it requires a waiver.”
After refining their business, the founders in 2019 began franchising with help from Bill Phelps, Wetzel’s Pretzels co-founder and former CEO. Dave’s had seven restaurants in 2020, Franchise Times reported, but a June news release about Roark’s investment said Los Angeles-based Dave’s has now sold the rights to more than 1,000 franchise locations in Canada, the U.S., Middle East and United Kingdom. More than 300 locations will open during the next two years. “You’ll see us popping up everywhere,” President and Chief Operating Officer Jim Bitticks told Restaurant Business. In the U.S., where it has 315 locations, Dave’s plans to increase via nontraditional sites like airports and college campuses, according to Restaurant Business.
At first, Dave’s 70-plus franchisees concerned about the Roark acquisition, Oganesyan told QSR Magazine, but they relaxed once they learned Phelps, Bitticks, Oganesyan (chief brand officer) and Dave Kopushyan (chief culinary officer) would stick around. Bitticks told Nation’s Restaurant News that “the biggest challenge will be to keep the focus on the food. The foundation of success is the food quality.” That’ll be high priority for the co-founders, who will oversee food quality and menu innovation as well as in-store experience, operations, branding and marketing.
To help retain its team, Dave’s gave transaction bonuses to every employee down to store managers and assistant managers. Phelps told Franchise Times that “we made more than 20 people millionaires in the past two weeks. … People were getting a year’s salary at the low end, and getting three and five years of their salary – and even more than that – which is just insane.” As Bitticks told Restaurant Business: “We’re all staying. Nobody is leaving. The goal is to keep it growing.”
In Nation’s Restaurant News, Phelps stated that “growth is about having a great concept, an incredible team that knows how to grow rapidly, and incredible franchisees. The franchisees provide the capital and get behind it. The unit economics for them are great.”
To expedite global growth, Dave’s Hot Chicken needed a financial infusion. “Roark is the largest restaurant company in the United States,” QSR Magazine quoted Phelps as explaining. “They have the connections, they have the purchasing power, and then they have franchisees around the world with all of these companies, and so we will be going to them and opening up the opportunity for Dave’s all around the world.” Talking with Franchise Times, he said, “You have to have a partner with a lot of horsepower internationally to do that right.”
Dave’s Hot Chicken, which has millions of social media fans, expects to do around $1 billion in system-wide sales in 2025. RestaurantDive.com noted that Dave’s is particularly well-positioned for prosperity, observing: “Many fast-casual and chicken brands are growing faster than the rest of the industry.” CNN cited Datassential Menu Trends research that crispy chicken on fast-food menus has grown 16% since 2021.
Franchises and multi-location businesses comprise much of Roark’s portfolio. Among its restaurant investments are Inspire Brands, which owns Arby’s, Buffalo Wild Wings, Dunkin’, Jimmy John’s and Sonic; Subway; GoTo Foods (formerly called Focus Brands), which owns Auntie Anne’s, Carvel, Cinnabon and Jamba Juice; and CKE Restaurants (Carl’s Jr. and Hardee’s). It also has a stake in The Cheesecake Factory.
Bitticks told Restaurant Business that Los Angeles-based Dave’s did not want to be folded into Inspire Brands or GoTo Foods. “We stand alone within their portfolio, and that was on purpose. We expect to be a super-high performer, like, the new rock star within the portfolio.”
Roark also owns non-restaurant companies such as Driven Brands (automotive repair and maintenance) and Youth Enrichment Brands, which includes School of Rock and i9 Sports. Roark is an investor in Orangetheory Fitness and Anytime Fitness franchises, too.
Copyright © FranchiseWire. All rights reserved.
Congratulation!