The recent acquisition of Dave’s Hot Chicken by Roark Capital for a staggering $1 billion has made headlines, especially due to the unique backgrounds of its cofounders. This article delves into the inspiring journey of four high school dropouts—Arman Oganesyan, Dave Kopushyan, and brothers Tommy and Gary Rubenyan—who turned a humble pop-up fried chicken venture into a multi-million dollar business.
In 2017, Oganesyan, Kopushyan, and the Rubenyan brothers came together to make their vision a reality. With only $900 pooled together to start their pop-up in a parking lot in East Hollywood, they initially faced financial hurdles. Their Nashville-style hot chicken became an overnight sensation, heavily promoted through social media platforms like Instagram and TikTok, which resulted in a cult following. Celebrities, including rapper Drake, also joined as early investors. The rapid trajectory laid the groundwork for the company, leading to systemwide sales projected at $620 million for 2024 and over 300 locations worldwide.
Given their backgrounds—being children of Armenian immigrants and high school dropouts—their trajectory is remarkable. They started with very little and overcame challenges through perseverance and innovation. Phelps, the CEO of Dave’s Hot Chicken, shared that these new millionaires—who once struggled financially—are now celebrating the success of their labor. The deal allowed each cofounder to sell around 80% of their stakes, resulting in gains estimated at $80 million (pre-tax).
The cofounders had previously sold half the business for $2 million in 2018. Their foresight and ability to attract a strong management team, including experienced investors like John Davis, helped them expand rapidly. Davis saw the potential in the brand from early on, claiming the company had the makings of a billion-dollar business.
One of the pivotal moments that led to their success was the founders’ well-timed foray into the chicken restaurant market. The demand for chicken in the U.S. has surged, with chicken overtaking beef as the preferred meat. The intense competition they face from established brands like Chick-fil-A and Popeyes doesn’t seem to faze them. Instead, Phelps expressed confidence in their strategy, highlighting the brand’s unique appeal.
Soon after its founding, Dave’s Hot Chicken gained traction in the market, with their first restaurant opening within a year of launching. Fueled by favorable reviews and social media hype, sales skyrocketed. Their marketing efforts focusing on visually enticing content contributed to a two-hour wait for customers during peak hours.
Despite their swift success, worries about rapid growth are common in the restaurant industry. Phelps and his team acknowledge the pressure but express confidence in their strategy: “We understand this business really well,” Bitticks said, noting their plans to continue aggressive expansion.
Now, with the backing of Roark Capital, they anticipate an increase in franchise opportunities, aiming for over 1,000 franchise locations across several countries in the next five years. The founders continue to be hands-on, maintaining stakes and roles within the company to preserve the quality that has propelled them to greatness.
While celebrating their success, they also stress their commitment to preserving the brand. Concerns from customers about potential dilution in quality post-acquisition are met with reassurance. Oganesyan emphasized that as long as they remain involved, quality would never be compromised.
Ultimately, the journey of Dave’s Hot Chicken serves as an inspiring case study in entrepreneurship and the importance of resilience. From their humble beginnings as broke dropouts to their current status as successful business owners, the cofounders highlight the transformative power of entrepreneurship. Their story resonates not just with aspiring restaurateurs but also with anyone who believes in pursuing dreams against the odds.
As they continue to expand their footprint in the culinary world, one thing is clear: Dave’s Hot Chicken is more than just a restaurant chain—it’s a testament to what hard work and a little bit of creativity can accomplish. The success of Dave’s is a heartening reminder that with vision and tenacity, extraordinary achievements are possible.
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