According to sources familiar with the matter, Dave’s Hot Chicken, backed by rapper Drake as an investor, is considering a potential sale that could value the popular restaurant chain at around $1 billion, including debt. Located in Pasadena, California, the fried-chicken chain is collaborating with investment bank North Point on the sales process. Private equity firms have shown interest in the sale and are in discussions under confidentiality.
Dave’s, renowned for its Nashville-style hot chicken, has seized on the growing demand for chicken among consumers. With over 250 global locations, the chain reportedly generates approximately $1 billion in annual sales. Dave's and North Point have refrained from commenting on the matter.
Majority-owned by its founders Dave Kopushyan, Arman Oganesyan, Tommy Rubenyan, and Gary Rubenyan, Dave’s welcomed Drake as an investor in 2021 and has received support from notable figures like actor Samuel L. Jackson.
Established with a humble $900 investment in a parking lot in East Hollywood in 2017, Dave's appointed Bill Phelps, co-founder of Wetzel’s Pretzels, as CEO in 2019. Under a franchised business model, Dave's has traded franchise rights for over 1,000 locations across the U.S., the Middle East, and Canada.
Restaurant franchises have traditionally been appealing to private equity firms due to their consistent royalty fees and operational cost-efficiency. The U.S. restaurant industry has recently seen heightened deal activity, with reports of Blackstone's transactions from the previous year and ongoing negotiations for the sale of other restaurant chains.