Private equity giant Roark Capital has acquired a majority stake in the fast-growing restaurant chain Dave’s Hot Chicken. Although the financial terms were not formally disclosed, CEO Bill Phelps indicated that the valuation, reportedly around $1 billion, is “pretty close.” Founded in 2017 in a Los Angeles parking lot, Dave’s has experienced rapid growth, expanding to over 300 locations through franchising. The brand’s sales surged 57% in the past year, surpassing $600 million, according to Technomic.
Spicy Innovation and Steady Leadership Drive Dave’s Rise Amid Chicken Market Boom
Roark’s investment comes during a golden era for chicken-based fast food, catalyzed by the 2019 “Chicken Sandwich Wars” led by Popeyes. This trend has opened the door for disruptors like Dave’s and Raising Cane’s to challenge traditional players such as KFC. Dave’s spicy offerings—ranging from mild to dangerously hot “Reaper” levels—have resonated with younger consumers who crave bold flavors. Notably, one “Reaper” customer required hospitalization, highlighting the brand’s edgy appeal.
Roark Capital Acquires Majority Stake in Dave’s Hot Chicken Amid $1 Billion Valuation SurgeDespite its rapid expansion, Dave’s has maintained a tight, focused menu centered on oversized chicken tenders and sliders. This simplicity has helped preserve food quality while supporting scalable growth. Leadership continuity remains strong: Co-founders and current CEO Bill Phelps, formerly of Wetzel’s Pretzels, will stay on after the deal, retaining minority stakes. The founders and executives believe that now is the ideal time for an outside investor to step in while preserving the brand’s essence.
Global Growth Plans and Employee Rewards While Preserving Core Brand Identity and Quality Standards
With Roark’s backing, Dave’s aims to scale aggressively, potentially reaching 4,000 global locations within the next decade. Roark’s robust international supply chain and franchise infrastructure are expected to lower costs and enhance growth opportunities. Phelps emphasized that this partnership enables both sides to benefit: Dave’s secures a lucrative valuation, and Roark gains access to a brand with substantial untapped potential. Franchisees are also expected to benefit from reduced costs and global expansion.
Even under new ownership, Dave’s leaders are committed to maintaining the brand’s core principles, resisting shortcuts like cheaper ingredients or faster service at the expense of quality. COO Jim Bitticks noted that staying true to the original vision is key to Dave’s success. The deal is also financially rewarding for employees—thanks to Phelps’ leadership, dozens of team members across various roles will receive substantial bonuses, creating approximately 20 new millionaires within the company.
