Roark Capital’s $1 billion acquisition of Dave’s Hot Chicken gives the private-equity firm another jewel in an increasingly heavy crown.
But it also gives Roark a much-needed injection of growth, particularly after a 2024 that could only be described as difficult.
According to Technomic Top 500 data, total U.S. sales by the 20 chains it owned last year, including the newly acquired Subway, grew just 0.7%. Median sales declined 0.5%.
Of those 20 chains, 12 reported sales declines. And only six chains grew at or above total U.S. chain sales growth of 3%. Dave’s Hot Chicken, by contrast, grew sales by 57% last year. It was created, expanded and sold for $1 billion in just eight years.
We can provide one caveat: Subway, which was purchased last year, was in decline domestically when Roark acquired the chain, and the private-equity firm certainly knew what it was getting into when it made the deal.
As for why the brands struggled last year, at least some of that could be blamed on the environment. Much of Roark’s holdings are in the fast-food space, where growth was difficult to find last year.
Yet many of Roark’s chains declined at rates well below the 2.3% growth of fast-food chains last year—or the 3% growth for total chain sales—suggesting deeper issues with some of its holdings. Let’s look at Roark’s different chains and where they are on the growth spectrum.
Let’s look at Roark’s chains and where they are on the growth spectrum.
Growth brands
Dave’s Hot Chicken, Nothing Bundt Cakes, Culver’s, Jim ‘n Nick’s, Miller’s Ale House.
These five brands are the clear growth brands in the Roark system. Nothing Bundt Cakes has been one of the better-performing restaurant chains for years. It is a stand-alone chain in the Roark system, suggesting a potential exit at some point. But it is growing largely by adding new locations, rather than through organic growth.
We’ve written about Culver’s frequently. But Jim ‘n Nick’s and Miller’s Ale House—two full-service brands—have both easily outperformed in recent years. Maybe Roark should buy more casual-dining chains.
Stable brands
Dunkin’, Auntie Anne’s, Buffalo Wild Wings, Jimmy John’s.
Dunkin’ is a powerhouse and appears to be doing just fine in an era in which major rival Starbucks is struggling. Based on what we’ve heard so far in 2025, that appears to still be the case. Its sales grew 4.6% last year.
Buffalo Wild Wings rebounded after a difficult post-pandemic period. And Auntie Anne’s is one of the more amazing chains in the U.S. We never pass one in a mall without navigating our way around a line of people waiting for pretzels.
While Jimmy John’s lost its status as the second-largest sub sandwich chain to Jersey Mike’s, it has been holding steady despite a competitive threat to its delivery business from the growth of third-party aggregators.
Tough 2024
McAlister’s Deli, Baskin-Robbins, Cinnabon, Moe’s Southwest Grill.
Sales at each of these four chains declined last year, including declines of 0.4% for McAlister’s, 0.5% for Baskin-Robbins and Cinnabon, and 1.5% for Moe’s.
Cinnabon grew unit count 5.4%, so its sales challenges were all rooted in sales declines at existing locations. The same could be said for McAlister’s, which grew units by 3.9%. Baskin-Robbins and Moe’s both closed more restaurants than they opened last year, however.
Turnaround mode
Sonic, Schlotzsky’s, Hardee’s, Jamba, Carl’s Jr., Arby’s, Carvel.
All but one of these brands—Carvel—closed locations last year. And each of them saw sales declines of 2.7% or more, suggesting potentially deeper issues at the different brands.
Maybe the biggest surprise of this group is Arby’s, the roast beef sandwich chain that had for years been one of the fast-food sector’s better performers. But its sales declined 6.3% last year, thanks to a combination of unit closures and weak organic sales.
Its sales declined more than Hardee’s (-5.3%) and Carl’s (-5.7%), which have been in decline for years and struggled with a variety of issues. Jamba (-5.6%) is struggling amid intense competition in the beverage space.
Carvel is an interesting one. It added 10 locations (3.1% unit growth). It is adding a number of cobranded locations along with Cinnabon. But its average-unit volumes fell 7.6% last year.
Subway
We’re putting the sandwich giant into its own category, in part because Roark acquired it in the midst of a long-term unit-count decline, which is why its sales fell 3.8% in the U.S. last year (and 0.6% worldwide). Subway has closed 7,000 restaurants over the past decade.
While Roark has owned many of its brands for years, it can hardly be blamed for the issues that led to that decline. But it did acquire them. Fixing them won’t be easy.
Roark buys and keeps its restaurant chains, which gives it time to put its various holdings on the right track, including Subway. But many of its brands have come out of 2024 with issues that go beyond that which can be blamed on the economic environment.