Roark Capital Invests in Dave’s Hot Chicken
Roark Capital seizes a majority stake in DaveS Hot Chicken, valuing the fast-casual chicken chain at approximately $1 billion. This strategic move signals enterprising global expansion plans for Dave’s Hot Chicken, which has seen explosive growth since its 2017 founding. Leveraging Roark’s extensive experience in the restaurant industry—and its international supply chain and franchising acumen—Dave’s Hot Chicken anticipates reaching 4,000 locations globally within a decade. News directory 3 is actively following the story. Considering the chain’s focus on quality and unique brand identity, will Roark’s backing help Dave’s maintain the spirit of the original founders? Discover what’s next for this spicy sensation.
Roark Capital Acquires Majority Stake in Dave’s Hot chicken
Roark Capital, a private equity firm known for its investments in the restaurant industry, has acquired a majority stake in Dave’s Hot Chicken. The fast-casual chain, which has experienced rapid growth since its founding, is now valued at approximately $1 billion, according too Dave’s CEO Bill Phelps.
Founded in a los Angeles parking lot in 2017, Dave’s Hot chicken has expanded to over 300 locations through franchising. The company’s U.S. sales surged by 57% last year, exceeding $600 million, according to Technomic data. this growth reflects the increasing popularity of chicken-focused restaurants and the demand for spicy flavors among younger consumers.
Dave’s Hot Chicken offers a range of spice levels, from mild to “Reaper,” the latter requiring customers to sign a waiver. The chain’s menu focuses on oversized chicken tenders and sliders, designed for easy, one-handed consumption.
Phelps,who previously led Wetzel’s Pretzels,joined Dave’s in 2019. The company’s co-founders, Arman Oganesyan, Dave Kopushyan, and brothers Tommy and Gary Rubenyan, will remain in their roles and retain minority equity stakes.
“The timing was absolutely right,” Phelps said. “We were at an inflection point where we could get an incredible valuation, and yet there was still notable upside for Roark, so that’s the perfect place to be.”
Phelps anticipates that Roark’s international supply chain and franchising expertise will enable Dave’s to expand rapidly, potentially reaching 4,000 locations worldwide within the next decade.
Jim Bitticks, Dave’s COO and president, emphasized that the company intends to maintain its focus on quality and its founders’ original practices, which have been key to its success.
“How did we get to that billion-dollar brand status? We leaned into what they created, rather than adjusting it or changing it based on conventional wisdom,” Bitticks said.
This acquisition marks Roark’s first restaurant deal since its purchase of Subway in 2023. Roark’s portfolio includes Inspire Brands and GoTo Foods, which own numerous restaurant brands such as Arby’s, Dunkin’, and Cinnabon.
Oganesyan noted that Roark had been observing Dave’s Hot Chicken as its early stages, recognizing the brand’s potential.
“They came to our 15-store grand opening,” Oganesyan said. “We’d see them at conferences all the time. They understood the potential of the brand. … When the time came where we needed that new investor to come in, they were some of the only people on our minds.”
As a result of the deal, dozens of Dave’s employees, from support staff to assistant managers, will receive significant bonuses, orchestrated by Phelps.
What’s next
With Roark Capital’s backing, Dave’s Hot Chicken is poised for significant expansion, both domestically and internationally, while maintaining its commitment to quality and its unique brand identity. The company plans to leverage Roark’s resources to optimize its supply chain and support its growing network of franchisees.