One of the fastest-growing fast-casual chicken chains may be for sale.
Reuters on Tuesday reported that the investors behind Dave’s Hot Chicken are exploring a sale and have hired the investment bank North Point to run the process.
Dave’s officials declined to comment.
If true, the move comes as Pasadena, California-based Dave’s is nearing 300 units, and has become a clear leader of the crowded Nashville hot chicken niche, which focuses on crispy fried tenders (and sliders) doused in sauce and dusted with spices of varying levels of heat.
Dave’s was launched in 2017 as a popup in a Los Angeles parking lot by four friends: Dave Kopushyan, brothers Tom and Gary Rubenyan and Arman Oganesyan. They opened their first brick-and-mortar restaurant the following year, and quickly built a following.
In 2019, the founders partnered with Bill Phelps, who had co-founded Wetzel’s Pretzels and later was an investor in Blaze Pizza, to expand the brand through franchising.
Now CEO, Phelps brought many of the same investors that had backed Blaze Pizza’s early growth, including Hollywood producer John Davis and former California First Lady Maria Shriver.
But Dave’s investors also include a celebrity lineup that includes the rapper and musician Drake, who also serves as a brand ambassador of the brand, as well as the singer/songwriter Usher, who is a partner with an Atlanta franchisee. Actor Samuel L. Jackson is also an investor, as is Michael Strahan.
The celebrity backing has helped fuel a particularly rabid fan base. The restaurants are also known for their colorful, graffiti-inspired murals that have become a signature design.
Dave’s has more than 270 units, almost all of them franchised, with another 80 expected to open this year. The brand has locations in Canada, the Middle East and the United Kingdom.
Sales nearly doubled for Dave’s in fiscal 2023, topping $406 million, which was an increase of nearly 100% after adding 169 units that year, according to Restaurant Business sister brand Technomic’s Top 500 Chain Restaurant Report.
Jim Bitticks, president and chief operating officer of Dave's Hot Chicken, told Restaurant Business that sales are projected to reach $1 billion this year.
Mergers and acquisitions in the franchise space have taken off over the past year, following deals for chains like Tropical Smoothie and the sandwich brand Jersey Mike's. A pair of other fast-growing franchised brands are also reportedly exploring a sale, including the cookie concept Crumbl and the burger chain Freddy's.
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