Roark Capital Takes Majority Ownership in Dave’s Hot Chicken Amidst Accelerated Growth
A Transformative Phase for the Emerging Chicken franchise
Roark Capital, a leading private equity powerhouse, has acquired a controlling stake in Dave’s Hot Chicken, marking a pivotal moment for the rapidly expanding brand. Although financial specifics remain undisclosed, CEO Bill Phelps revealed that the company’s valuation approaches $1 billion.
Rapid Rise from Modest Origins to National Presence
Originating in 2017 from a modest Los Angeles parking lot setup, dave’s hot Chicken has swiftly grown through franchising efforts and now operates over 300 outlets across the United States.In just the past year, U.S. sales soared by 57%, exceeding $600 million according to recent industry analytics.
The Growing Popularity of Spicy Chicken Offerings
This investment aligns with an ongoing surge in chicken-focused dining experiences fueled by what experts term the “Chicken Sandwich wars,” which began after Popeyes’ viral triumph in 2019. Newcomers like Dave’s and Raising Cane’s have disrupted established players such as yum Brands’ KFC, driving remarkable expansion within this culinary niche.
Catering to Adventurous Taste Buds with Distinct Heat Levels
The younger demographic’s appetite for bold spice profiles is expertly met by Dave’s tiered heat system-from mild flavors up to their notorious “Reaper” level. This extreme spice intensity even requires customers to sign waivers before ordering; one notable incident involved a diner hospitalized after sharing a bite with her partner who was unprepared for its fiery kick.
A Streamlined Menu Emphasizing Quality and Convenience
The menu remains deliberately focused on oversized chicken tenders that can be enjoyed alone or converted into sliders designed for effortless one-handed eating-ideal for busy patrons who want flavorful food alongside multitasking activities like smartphone use.
Experienced Leadership Steering Through Expansion Stages
Phelps took on the CEO role in 2019 following his two-decade leadership at Wetzel’s Pretzels. The original founders-Arman Oganesyan, Dave Kopushyan, Tommy Rubenyan, and Gary Rubenyan-continue active operational roles post-acquisition while maintaining minority ownership alongside Phelps.
“the timing was perfect,” stated Phelps. “We reached an inflection point enabling us to secure an notable valuation while still offering Roark significant growth opportunities.”
Utilizing roark’s Global Network to Accelerate Growth
Phelps emphasized Roark Capital’s vast international supply chain infrastructure as crucial advantages that will lower costs and boost franchisee profitability worldwide. Leveraging these resources aims at scaling from hundreds of current locations toward nearly 4,000 globally within ten years.
Sustaining Brand authenticity During Rapid Scaling Efforts
Despite common fast-food industry challenges such as sacrificing quality or oversimplifying menus during rapid growth phases,Dave’s remains dedicated to preserving its original recipes and high operational standards.COO Jim Bitticks highlighted this commitment as essential for maintaining product excellence amid expansion pressures.
“Our billion-dollar achievement comes from doubling down on our founders’ vision rather than conforming blindly to industry trends,” Bitticks explained.
An Important Addition Within Roark Capital’s Restaurant Holdings
This acquisition represents Roark Capital’s first restaurant investment since purchasing Subway last year for nearly $10 billion-a strategic move complementing their portfolio including Inspire Brands and GoTo Foods which oversee well-known chains like Arby’s and Dunkin’. The firm had closely tracked Dave’s advancement since early stages; Oganesyan recalled how Roark representatives attended initial multi-location openings and engaged consistently at trade events recognizing long-term potential well before formal talks commenced.
Employee Rewards Reflecting Company success Story
The transaction also delivers benefits beyond investors: under Phelps’ leadership many employees-from corporate staff members to assistant managers at restaurants-are set to receive significant bonuses tied directly to this deal.
Oganesyan proudly noted that these incentives have created “20 millionaires” among team members alone through company success participation programs.
