Dave’s Hot Chicken’s journey to a billion-dollar valuation

In 2017, a modest food stand in East Hollywood began selling hot chicken out of a parking lot with a budget of just $900. That experiment, born out of a craving and curiosity, evolved into Dave’s Hot Chicken, one of the most compelling growth stories in the fast-casual restaurant sector. The founders, including chef Dave Kopushyan and three friends, had no corporate backing and no roadmap beyond a spicy menu and an Instagram account. Eight years later, the brand caught the attention of Roark Capital, which in June 2025 acquired a 75 percent controlling stake at a valuation of $1 billion.

Bootstrapped beginnings met with overwhelming demand

The $900 that seeded Dave’s Hot Chicken paid for ingredients and a fryer. Within days, the stand was drawing long queues. Their signature Nashville-style hot chicken spread quickly through Instagram and local buzz.

By late 2017, the founders opened their first permanent location. The store’s success was immediate and reinforced by a tight digital strategy. Their approach was not groundbreaking, it was timely, experience-focused, and built around photogenic food.

Turning cult status into a commercial scale

Between 2018 and 2025, Dave’s Hot Chicken expanded to more than 300 stores across the United States and several international markets. The company projects 2025 systemwide sales to reach $1.2 billion. This figure underpins the eight-times revenue multiple used in the $1 billion acquisition valuation.

The previous year alone brought a 57 percent increase in US sales, totaling over $600 million. At a time when many chains struggled with inflation and labor shortages, Dave’s Hot Chicken leaned into franchising to drive expansion. Rights for over 1,000 units have been sold, and more than 150 new sites are scheduled to open this year.

Roark Capital’s bet on scalable spice

Roark Capital’s investment highlights broader trends in private equity interest in franchise-ready restaurant brands. The Atlanta-based firm owns stakes in Arby’s, Buffalo Wild Wings, and Dunkin’. Dave’s Hot Chicken joins this portfolio with a growth runway that includes international opportunities and digital loyalty potential.

At eight times projected sales, the valuation reflects investor confidence in the brand’s long-term profitability. Roark brings operational expertise that could bolster supply chain efficiency, broaden third-party delivery deals, and support co-branded campaigns or ghost kitchen rollouts.

Cultural equity in action

An important part of Dave’s rise is its connection to pop culture. Rapper Drake became an early investor and vocal supporter of the brand. His visibility, along with backing from figures like Samuel L. Jackson and Maria Shriver, expanded the chain’s footprint beyond typical food press.

Rather than traditional endorsements, these were equity investments. Aligning financial incentives with personal branding helped generate trust and consumer appeal, particularly among Gen Z and millennial diners.

Positioning in a growing fast-casual market

The global fast-casual market is forecast to grow from $179.2 million in 2024 to $217.07 million by 2033. That projected 6.6 percent compound annual growth rate places it ahead of many segments in the hospitality sector.

Dave’s Hot Chicken fits well into this narrative. Its menu, chicken tenders, sliders, fries, and shakes, is limited and optimized for speed and cost control. The model emphasizes low waste and high repeatability, ideal for franchising.

Dave’s Hot Chicken is a compelling example of how calculated franchising, operational discipline, and brand equity can converge to create rapid, sustainable growth in the fast-casual sector. Since the 2019 investment from a high-profile group that included industry veterans and celebrities, CEO Bill Phelps has orchestrated an aggressive but controlled expansion strategy. His leadership has taken the brand from a regional player to an international contender, with locations now operating across Canada, the United Kingdom, and the Middle East.

The financials speak volumes: $600 million in systemwide sales in the US last year, up 57 percent, and a projected $1.2 billion for 2025. This trajectory, paired with the company’s reported profitability at both the franchise and corporate levels, positions Dave’s as one of the most efficiently scaling restaurant brands in recent memory.

The acquisition by Roark Capital is a timely move. With the founding team and existing leadership retaining minority stakes and operational roles, the structure ensures brand continuity while unlocking resources for the next growth phase. As Phelps stated, the timing allowed for a strong valuation while preserving meaningful upside for Roark. For investors, franchisors, and foodservice strategists, this deal underscores the power of brand agility and timing in an evolving global food economy.

Sources:
CNBC