From a modest start in a parking lot, Dave’s Hot Chicken has now entered the billion-dollar club. The restaurant chain, which has experienced remarkable growth since its inception in 2017, recently sealed a billion-dollar deal.

What Happened: The story of Dave’s Hot Chicken began with a $900 investment by three friends in Los Angeles. The business started by selling Nashville-style hot chicken and has since expanded to 315 locations worldwide, with plans for an additional 150 locations in the U.S., Europe, and the Middle East.

Over the past two years, the company’s sales have tripled, surpassing $600 million, as per data from Technomic, a research firm.

As reported by the Wall Street Journal, the restaurant chain was bought by a private-equity firm. Dave’s Hot Chicken has been lauded for its unique business model, which includes a simple menu, a lively ambiance, and a variety of spice levels, with the “Reaper” being the spiciest, requiring a waiver to eat.

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The company’s swift expansion is credited to its niche market, robust social media presence, and the growing popularity of chicken. In the U.S., sales of chicken at chain restaurants grew by 9% last year, with fast-casual chicken chains witnessing a 24% increase.

The private equity firm Roark Capital is the new owner of Dave’s Hot Chicken. Roark Capital, which owns several major restaurant brands, had been interested in the chain since 2021, making its presence felt at the opening of the 15th store.

Why It Matters: The success of Dave’s Hot Chicken underscores the potential of unique, niche food concepts. The company’s rapid growth, despite its humble beginnings, demonstrates the power of a strong brand, a focused menu, and effective use of social media.

The rising popularity of chicken, particularly in the fast-casual dining segment, also played a significant role in the chain’s success.

The acquisition by Roark Capital, known for its portfolio of successful restaurant brands, further validates the company’s business model and growth potential.

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