Every night, in parking lots across Los Angeles, there are probably countless entrepreneurs attempting to follow the Dave’s Hot Chicken path to success.
The fast-casual chain got its start in 2017, when three friends decided to try making Nashville-style hot chicken as a popup. They scraped together $900 and a couple of portable fryers and coolers. People seemed to like it, so, just a few days in, they invited a writer from Eater Los Angeles out for a taste.
That editor, Farley Elliott, came, and it apparently blew his mind, as told in the video below.
Cut to: This week. It was announced that Dave’s Hot Chicken was acquired by private-equity firm Roark Capital Partners in a deal valued at about $1 billion. While terms were not disclosed, it seems likely those partners would have no trouble scraping up $900 now.
But the eight-year journey since Arman Oganesyan, Dave Kopushyan and Tommy Rubenyan created the brand is not easily replicable.
And now, as Dave’s Hot Chicken moves into a next level of growth, it remains to be seen whether the brand can maintain that certain magic that has propelled the brand so far.
The social media world in which Dave’s has thrived is deeply suspicious of private-equity-owned brands.
But Oganesyan, Dave’s lively chief branding officer—and a high-school dropout who CEO Bill Phelps calls a marketing genius—doesn’t think much about Dave’s will change. In fact, the leadership team will remain in place.
What Roark brings to the table, in addition to capital, is a portfolio of established franchise operators, particularly international franchisees. Dave’s president Jim Bitticks sees a huge opportunity for the brand globally, first in Europe, and later in Asia, where KFC has been embraced.
In addition, Dave’s has only a handful of nontraditional locations domestically. But the simple menu of chicken tenders, sandwiches and sliders at various spice levels seem ideal for airports, college campuses and malls.
Dave’s has 315 units open and another 155 expected to open this year at least—potentially up to 175, Bitticks said. About 1,170 franchise commitments have been sold, mostly domestic.
Dave’s has been one of the fastest growing brands for several years. And that speed has been necessary, in part, because so many other (very similar) hot chicken chains are also racing to plant their flags in various regions, including brands like Angry Chickz, Hot Chicken Takeover, Hangry Joe’s Hot Chicken and many others.
Phelps, the co-founder of Wetzel’s Pretzels who also grew Blaze Pizza with many of the same investors now in Dave’s, got in early (2019) to launch franchising. At the time, people said Dave’s founders had “sold out,” Oganesyan said.
But, in fact, the result was a potent mix of investors (Phelps et al.) who knew how to scale brands, and innovators (Oganesyan et al.) who knew how to reach a young audience.
“What has made Dave’s successful is that the management team didn’t change what the founders created,” said Bitticks. “What we actually did was we leaned into what they created.”
Of course, It didn’t hurt that the investor group included high-caliber celebrities, like Drake, Samuel L. Jackson and Usher. The restaurants themselves are literal pieces of art, with murals that demand social media posting. And, perhaps most importantly, franchisees are seeing a return on their investment.
“I think we proved that the investors and the founders can work really harmoniously together, and actually, I feel, in some ways improved the brand over time,” Oganesyan said in the video.
Now, Oganesyan, Kopushyan and Rubenyan say they have gotten to know the folks at Roark over the years, he added, not only as a business but as people.
“We have that same feeling that, the chemistry between us and them is going to help Dave’s get to that next level. They kind of understand that this brand is special because of the way it’s been run by the people that are behind it. And there certainly won’t be any drops in quality. That’s the number one thing everybody’s been worried about.”
Adds Kopushyan: “We know quality is what got us here, so, we can never change that.”
The three founders, who were joined early on by Gary Rubenyan (Tommy’s brother), are all franchisees of the brand, with several units in Los Angeles. So is Bitticks. They see the brand’s future through the lens of being operators, as well as franchisors.
Bitticks would love to see Dave’s Hot Chicken follow the path of Wingstop, a more than 2,200-unit chain that Roark took public with an initial public offering in 2015, when it had roughly 800 units.
Wingstop has had double-digit sales increases in recent years, in part the result of a shift to boneless chicken sandwiches and, of course, chicken tenders. The Dallas-based chicken brand is also known for strong returns on investment for franchise operators, but Dave’s $3.1 million average unit volume in 2024 was already well ahead of Wingstop’s $2.1 million.
Still, said Bitticks, “We hope we’re the next Wingstop. We hope we’re that story. They sold it when it was at its peak, and it keeps getting bigger and bigger—and better.”
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