Dave’s Hot Chicken was born six years ago in a parking lot in East Hollywood and has become a growth leader in the Top 500, posting 67.6% compound annual growth rate from 2021 to 2022 and expanding from its birthplace in Los Angeles to other states, Canada and Dubai.
Compound annual sales for the brand rose 155%, to $203.6 million in 2022 from $79.8 million in 2021, according to Datassential’s survey. Now it has its eyes set on joining the upper echelon of the limited-service chicken segment, which includes players like Chick-fil-A, Popeyes Louisiana Kitchen, Wingstop, Raising Cane’s and Bojangles.
The Los Angeles-based brand plans to open an additional 70 locations this year, according to Bill Phelps, the CEO of Dave’s Hot Chicken who bought into the concept with movie producer John Davis to franchise it.
“Dave’s Hot Chicken is the wildest business I've ever been associated with,” said Phelps, a former cofounder and CEO of Wetzel’s Pretzels. The company has sold franchise rights for more than 700 restaurants and recruited 25 new franchise owners for locations as far ranging as Connecticut, Florida and New Hampshire to Pennsylvania, South Carolina and Washington.
“There's a cool factor about the Dave’s Hot Chicken brand,” Phelps said. “It's really with the [founders] and their story. These were kids with $900 in savings who had a dream and a creativity about them that's hard to describe.
“We have really held on to that,” he continued. “A lot of people like myself would come in and dismiss the founders. We have done the opposite of that. We have kept them very much embraced in the business and into the culture, which makes it seem like a young entrepreneur brand even though we're growing at a pretty good rate.”
Dave’s Hot Chicken specializes in hot-chicken tenders and sliders with such sides as kale slaw, mac ’n’ cheese and French fries. The chicken is offered at seven spice levels, ranging from No Spice to Reaper, which requires a signed waiver.
Celebrity investors include former California First Lady Maria Shriver, actor Samuel L. Jackson, retired NFL player Michael Strahan and singer Drake.
The concept was founded in 2017 by Arman Oganesyan and his best friend, chef Dave Kopushyan, along with brothers Tommy and Gary Rubenyan. They remain involved in the business.
Dave’s units are generally in the 2,000-2,700-square-foot range, with the target being about 2,300 square feet. Units generally seat between 45 and 50.
The young brand has been able to capitalize on digital marketing, Phelps added, especially with the reach of investors like Drake.
“In today's social media world, you can market these concepts incredibly effectively without a lot of money,” Phelps said. “Our primary marketing vehicle for the first few years was Instagram, and we're out there with Instagram telling the stories, doing stories, doing posts, and this viral approach just worked.”
Last October, Drake posted about free chicken for followers on his birthday. “He posts a story that gets 27 million views in 24 hours,” Phelps said. “You just can't buy that kind of exposure.”
Contact Ron Ruggless at [email protected]