Subway-owner Roark Capital buys Dave’s Hot Chicken for $1 billion with rapid expansion plans underway

Fast-growing chicken chain Dave’s Hot Chicken is now owned by the same private equity firm behind Subway and Dunkin’, with Roark Capital on Monday announcing a deal that values Dave’s Hot Chicken at roughly $1 billion as it ramps up its global expansion plans.

Currently, Dave’s Hot Chicken operates 310 locations, but it has sold rights to more than 1,000 franchise locations across the US, Middle East, and Canada. It plans to open more than 155 restaurant locations this year.

CEO Bill Phelps, formerly of Wetzel’s Pretzels and Blaze Pizza, began working with the brand in 2019, investing roughly $2 million into Dave’s Hot Chicken. The brand was started in 2017 by three friends in an East Hollywood parking lot with $900 in savings.

“We timed it really well,” Phelps said in an interview with CNBC on Monday. “The product is insane … but then we have a team that built these other businesses, Wetzel’s Pretzels and Blaze Pizza, … [the] franchisees have done a great job building restaurants really, really fast.”

All the chosen franchisees owned other chains like Dunkin’, Wetzel’s Pretzels, or Blaze Pizza.

A view of a Dave’s Hot Chicken restaurant on Feb. 26, 2025, in Rosemead, Calif. (Mario Tama/Getty Images) · Mario Tama via Getty Images

The brand has a viral social media following with 1.8 million followers on Instagram and 3.6 million on TikTok. Phelps called it a “unicorn,” outperforming its food chain peers as US consumer confidence remains challenged due to uncertainty surrounding tariffs.

The purchase of Dave’s Hot Chicken also comes as Roark Capital continues to bolster its portfolio of food brands.

In August of 2023, Roark Capital bought sandwich chain Subway for about $9.6 billion, and its current investments include Inspire brands — which includes Arby’s, Baskin Robbins, Buffalo Wild Wings, Dunkin’, Jimmy John’s, and Sonic — as well as Focus Brands, which owns Auntie Anne’s Pretzels and Jamba Juice. Other investments include Moe’s and Carl’s Jr.

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Roark Capital currently has $40 billion in assets under management.

Dave’s Hot Chicken’s price point for a meal is above $10 in the New York market, comparable to the rising chicken chain Raising Cane’s and other fast-casual players.

In the first quarter, Mediterranean-inspired chain Cava (CAVA), which currently has 382 locations and went public in June 2023, reported same-store sales growth of 10.8% in the first quarter. Salad chain Sweetgreen (SG), which operates 251 locations in the US, saw same-store sales decline 3.1% in the first quarter. Sweetgreen has 251 locations and is only in the US.

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Burger chain Shake Shack (SHAK) — which has 589 locations worldwide, including 333 in the US, and is planning growth to 1,500 restaurants — saw same-store sales rise 0.2% in the first quarter.

Chipotle (CMG), the market leader in the fast-casual category, operates 3,781 locations across the globe with plans to reach 7,000 restaurants in North America. The company saw same-store sales fall 0.4% in the first quarter.

Mass-market fast food brands like McDonald’s (MCD) and KFC, which is owned by Yum! Brands (YUM), reported same-store sales declines of 3.6% and 2% in the US in their most recent quarters, respectively.

Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at [email protected].

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