The Rise of Dave's Hot Chicken: From Pop-Up to Billion-Dollar Brand

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Jemima McEvoy

In a remarkable journey that began in a parking lot in East Hollywood, Dave's Hot Chicken has transformed from a humble pop-up into a billion-dollar enterprise, capturing the attention of investors and food enthusiasts alike. Founded in 2017 by four high school dropouts Arman Oganesyan, Dave Kopushyan, and brothers Tommy and Gary Rubenyan the brand quickly gained a cult following for its Nashville-style hot chicken, which comes in six spice levels, including the infamous "The Reaper."

The turning point for Dave's came with its recent sale of 70% of the business to Roark Capital, a private equity firm known for its investments in major restaurant chains like Subway and Dunkin'. This deal, valued at $1 billion, marks a significant milestone for the founders, who each owned approximately 10% of the company prior to the sale. With the transaction, they are set to receive around $80 million each, a far cry from the $900 they initially pooled together to launch their first pop-up.

The founders' success can be attributed to a combination of savvy marketing, strategic partnerships, and a keen understanding of consumer trends. Social media played a crucial role in building the brand's visibility, with millions of views generated weekly on platforms like TikTok. Celebrity endorsements, including support from rapper Drake, further propelled the brand into the spotlight.

Despite the rapid growth, Dave's leadership remains cautious about the potential pitfalls of scaling too quickly. The company plans to expand from 80 new restaurant openings last year to nearly 170 in the coming year, confident in its ability to maintain quality and customer satisfaction. Bill Phelps, the CEO, emphasizes the importance of understanding the business and the market dynamics, stating, "We’re going to go from opening 80 restaurants last year to roughly 155 this year, to almost 165 or 170 next year. That's the kind of growth we can maintain."

As Dave's Hot Chicken continues to expand its footprint across the U.S. and internationally, the founders and executives are committed to preserving the brand's core values and quality. They believe that as long as the original team remains involved, the essence of Dave's will endure, ensuring that customers can continue to enjoy their beloved hot chicken for years to come.