The Metrics Behind Dave's Hot Chicken That Led to a $1B Roark Acquisition

Jun 11, 2025 • 15 min read

Dave’s tested a 9% price increase at several stores to gauge customer reaction. The result: a “negligible impact”. Franchisees report no drop in guest counts after the increases, suggesting that diners were willing to pay a bit extra for Dave’s – a strong indication of pricing resilience in the brand’s fan base. It's brand elasticity? Unmatched.

In 2019, Dave’s Hot Chicken was little more than a local curiosity – a Los Angeles pop-up selling fiery tenders in a parking lot. By mid-2025, it has exploded into a national phenomenon with over 300 restaurants across the U.S. and systemwide sales surging past $600 million annually. The brand’s meteoric rise, culminating in a roughly $1 billion acquisition by Roark Capital this year, stems from a formula that has economically differentiated Dave’s in a crowded industry dominated by giants like Chick-fil-A, McDonald’s and KFC. Through breakneck sales growth, deft pricing strategies and exceptional unit-level economics, Dave’s Hot Chicken has managed to outpace and outshine many of its more established peers in the period from 2019 to 2025.

Few restaurant chains have seen their sales climb as swiftly as Dave’s. Even by the standards of the pandemic-fueled chicken craze, Dave’s numbers have been astounding. In 2020, the fledgling chain’s total U.S. system sales were a mere $22 million; by 2024, that figure had leapt to roughly $617 million, according to Technomic data. This translates to compound growth rates that dwarf the broader industry: Dave’s revenues jumped 262% in 2021 (off that small 2020 base) and another 156% in 2022 as the company rapidly opened franchises and built brand awareness. Even as the chain grew larger, momentum remained strong – in 2024, visits per restaurant continued to swell, with CenterCheck retail data showing Dave’s among the top performers in foot traffic growth for chains over 100 units. By contrast, most legacy fast-food brands eked out far smaller gains. Wingstop, another high-flying poultry concept, had a record year in 2024 with about 20% domestic same-store sales growth – impressive, yet still a fraction of Dave’s year-over-year sales increases. Chick-fil-A, the industry leader in per-unit volumes, saw its sales growth slow to just 5.4% in 2024 – the chain’s weakest performance in decades. And McDonald’s, an economic bellwether, has recently begun reporting slight sales declines in U.S. stores as inflation-weary consumers pull back. In this context, Dave’s Hot Chicken’s ability to consistently post double- and even triple-digit annual sales gains from 2019 through 2023 stands out as a remarkable outlier.

One key to Dave’s outperformance has been its pricing power – and the careful way the company wielded it during a period of high inflation. Rather than simply jacking up menu prices in one go (a tactic that risked alienating value-sensitive diners), Dave’s took a more measured approach to protect its margins amid surging labor and food costs. In late 2023, when California mandated a $20 hourly minimum wage for fast-food workers, Dave’s tested a 9% price increase at several stores to gauge customer reaction. The result: a “negligible impact” on sales volumes and customer traffic. Armed with that data, the chain opted to roll out the hike in two stages – roughly 5% in February 2024, then another 4% by April – across its California locations. “Our goal was to maintain the bottom line dollars, not the bottom line margin,” explains Dave’s COO Jim Bitticks, noting that fully preserving profit percentages would have required far steeper hikes. In other words, Dave’s chose to absorb a modest hit to its margins in exchange for keeping prices moderate. “We don’t want to gouge anybody,” Bitticks says, underscoring the brand’s awareness of potential pushback. The strategy appears to have paid off: franchisees report no drop in guest counts after the increases, suggesting that diners were willing to pay a bit extra for Dave’s – a strong indication of pricing resilience in the brand’s fan base.

At the same time, Dave’s has been exceptionally savvy in boosting average ticket size without overtly nickel-and-diming customers. One tactic has been leveraging technology: the chain found that orders placed through self-service kiosks tend to be 7–8% higher in value than those taken by a cashier. When customers browse the digital menu themselves, they often discover additional items or upgrades – extra sauces, sides, or an extra slider – that they might otherwise miss. This organic upselling, driven by curiosity and an engaging menu display, has lifted check averages even apart from any base price changes. Dave’s also introduced a new larger beverage size (a 32-ounce drink, up from the standard 20 oz) at select locations to capitalize on the high margins of fountain drinks. Many guests happily pay a little more for the bigger iced tea or soda, which one executive likened to a voluntary price increase – one that pads revenue but “not because it’s a forced price increase” on the core menu. By expanding optional high-margin offerings and encouraging slightly larger orders, Dave’s managed to offset inflationary pressures and drive per-customer spending without driving away traffic. Indeed, its customer counts kept climbing. In stark relief to some bigger chains that saw patronage soften after aggressive price hikes – Chick-fil-A, for instance, experienced rare softness in traffic as its menu prices climbed, contributing to its unusual growth slowdown – Dave’s Hot Chicken maintained its buzz and customer loyalty even as combo meals grew pricier. The brand’s ability to calibrate price and value, upsell cleverly, and give guests more choice has bolstered its reputation for offering “worth it” indulgence rather than becoming a victim of the inflation crunch.

Perhaps the most compelling element of Dave’s Hot Chicken’s success, however, is found in its unit-level economics – the raw financial performance of its restaurants. For a fast-casual concept with no drive-thrus and a limited menu, Dave’s generates astonishing volumes. The chain’s executives disclosed earlier this year that the average unit now rings up roughly $2.7 million in annual sales. To put that in perspective, a typical McDonald’s in the U.S. does about $3 to $4 million a year in sales, but with a large format and 24-hour drive-thru business. Chick-fil-A’s freestanding units (famous for multi-lane drive-thru queues) average well north of $6 million. Dave’s, with its counter-service model and smaller footprint, is approaching those rarefied per-store sales levels. It also handily eclipses the volumes of most rival chicken chains: Wingstop, despite its banner year, recently reported an average unit volume of about $1.9 million – impressive for a wings takeout concept, but still far shy of Dave’s output. High sales are only half the story. Dave’s restaurants are also efficient, focused operations – the menu is limited to hot chicken tenders and sliders, plus a handful of sides, making kitchen execution relatively straightforward. The stores don’t require armies of staff or expensive culinary infrastructure. As a result, store-level profit margins are robust: industry observers estimate that a Dave’s franchisee can achieve roughly 20–25% cash flow margins, which is unusually high for the restaurant business. Together with the lofty sales, this means a well-run Dave’s can generate on the order of $500,000–$700,000 in annual profit per location. Little surprise, then, that franchise operators have been lining up. According to QSR magazine, many of Dave’s newer restaurants are being opened by existing multi-unit franchisees eager to reinvest, drawn by the promise of an “under two-year” payback period on new units and simplified operations. The initial investment to open a Dave’s – roughly $0.6 million to $1.4 million per store, including build-out and equipment – is relatively modest compared to other fast-food franchises, so recouping that cost in as little as 24 months is an enticing proposition. By contrast, a franchisee of a legacy burger or casual dining brand might wait 4, 5, or more years to break even on a new unit. Dave’s has effectively combined the high throughput of a top-tier chain with the lean cost structure of a scrappy startup, yielding unit economics that are, as one analyst put it, “golden.” This strong financial foundation at the store level has turbocharged Dave’s expansion: franchisees can rapidly reinvest cash flows into opening more locations, creating a self-reinforcing growth cycle that has powered the brand’s rapid march across the country.

All of these factors made Dave’s Hot Chicken a particularly attractive prize for Roark Capital, the Atlanta-based private equity firm that has built a $60 billion empire of restaurant and retail brands. In June 2025, Roark – already owner of household names like Arby’s, Dunkin’ and Buffalo Wild Wings – agreed to acquire Dave’s Hot Chicken in a deal that reportedly values the chain around $1 billion. For Roark, Dave’s checks several strategic boxes. First, it occupies a unique niche in the portfolio: none of Roark’s other major holdings focus on the trendy “Nashville hot chicken” category that Dave’s has mastered. This segment – essentially spicy fried chicken tenders and sandwiches – has proved wildly popular with younger consumers, and relatively few national players aside from Dave’s are in the space. In effect, Dave’s offers category whitespace: a chance to dominate a fast-growing corner of the market without running headlong into a dozen well-established competitors. Second, Dave’s brings stellar unit economics into the fold. Many of Roark’s legacy brands, while profitable, operate in mature categories with lower growth or thinner margins. Dave’s, by contrast, boasts both high margins and a rapid growth trajectory, a combination that is rare. It provides Roark with a high-growth vehicle to complement steadier holdings – akin to adding a rocket ship alongside a fleet of ocean liners. Third, the chain’s growth profile is extraordinary. Dave’s has been opening outlets at a blistering pace – expanding from just 2 units in early 2020 to 118 locations by March 2023, and then leaping into the hundreds by 2025. More than 700 new units are already in the development pipeline via franchise agreements, pointing to several years of continued aggressive expansion. In Roark’s hands, with deep financial resources and franchising expertise, the brand could conceivably grow even faster. Company leaders have openly mused about the global potential: Dave’s could reach 3,000 to 4,000 locations worldwide in the next decade if all goes to plan. Such ambitions may have sounded fanciful a few years ago, but given Dave’s trajectory so far, they carry weight. As one industry observer noted, Roark’s investment “follows a boom for chicken-focused restaurants and a rising tolerance for spice among younger consumers,” highlighting that Dave’s sits at the sweet spot of a broader trend.

Dave’s Hot Chicken’s journey from a humble $900 fryer and a dream to a billion-dollar brand has been as sizzling as its famously spicy Reaper sauce. By delivering exceptional sales growth, exerting smart pricing discipline and offering franchisees an unusually rich economic proposition, the upstart chain carved out a profitable niche and bucked broader headwinds in the dining sector. It has outgrown its cult-favorite beginnings to become a bona fide challenger in American fast food – all in the span of about six years. The true test will be whether Dave’s can sustain this level of performance as it scales into the hundreds and eventually thousands of units. But as of 2025, the verdict from investors and consumers alike is clear: Dave’s Hot Chicken has rewritten the playbook on how a small concept can differentiate itself economically and succeed, even in a market packed with powerful incumbents. It did so by understanding its value, knowing its customer – and never skimping on the heat that made people fall in love with it in the first place.

Sources: Dave’s Hot Chicken franchise disclosure documents and company press releases; interviews with Dave’s Hot Chicken executives in Restaurant Dive and QSR Magazine; Technomic and CenterCheck retail data on restaurant sales and traffic; Forbes, CNBC and Restaurant Business reports on industry comparisons and the Roark Capital acquisition.