Should You Invest in a Dave's Hot Chicken Franchise?

Did you know that the take-out fried chicken market size is expected to reach $9.85 billion in 2030? This major food trend might get you interested in franchising a fried chicken business. If so, check out Dave’s Hot Chicken. They’re well known fried chicken tenders with different spice levels with the hottest called the Reaper requiring you to sign a waiver when ordering. Dave’s Hot Chicken is popular that they’ve grown to over 70 locations in and outside the United States. This is impressive expansion for a restaurant that’s only been franchising since 2019.

How much does it cost to open Dave’s Hot Chicken? To be able to franchise this fried chicken chain, you’ll need a liquid capital of $2,500,000 and a net worth of $5,000,000. The initial investment for this food chain is $626,300 to $1,413,500 and the franchise fee is $40,000.

Still interested in opening your very own Dave’s Hot Chicken in your area? Read on to learn more about the average profit per unit, detailed costs, or take our 7-minute franchise quiz to be matched with a custom opportunity.

  • Financial Requirements and Fees
  • Average Sales / Revenue per Year
  • Dave’s Hot Chicken Franchise Facts
  • How Much Does Dave’s Hot Chicken Make in Profit?
  • Advantages of a Dave’s Hot Chicken Franchise
  • Challenges of a Dave’s Hot Chicken Franchise

Financial Requirements and Fees

These are the financial requirement and fees you need to know about when opening up a Dave’s Hot Chicken franchise:

Fees / Expenses Financial Amount Liquid Capital $2,500,000 Net Worth $5,000,000 Total Investment $626,300 to $1,413,500 Franchise Fee $40,000

Other fees to note are the royalty fee which is 5% and the ad royalty fee which is 2%. For other expenses, you may check out the list of expenditures below:

Expenditures Low Amount High Amount Method of Payment Initial Franchise Fee $40,000 $40,000 Lump Sum Architect / Engineer $14,800 $44,000 As Incurred Business Licenses & Permits $1,800 $20,000 As Incurred Construction, Remodeling & Leasehold Improvements $275,000 $570,000 As Incurred Equipment $110,000 $250,000 As Incurred Furniture, Fixtures, and Decorations $11,500 $67,000 As Incurred Smallwares $11,000 $14,000 As Incurred Signage $17,000 $58,000 As Incurred Graffiti and Artwork $32,000 $60,000 As Incurred Grand Opening Kit, Menu Boards $12,500 $15,000 As Incurred Drive-Thru, Loop Timers and Signage $0 $40,000 As Incurred Computer Equipment and Information / POS Systems $13,500 $19,500 As Incurred Office Supplies $1,000 $3,000 As Incurred Uniforms $1,500 $2,500 As Incurred Initial Inventory and Supplies $20,000 $40,000 As Incurred Insurance Deposits $1,500 $3,000 As Incurred Liquor Licensing $0 $10,000 As Incurred Pre-Opening Rent $5,000 $10,000 As Incurred Initial Training $10,000 $20,000 As Incurred New Restaurant Opening Fee $15,000 $15,000 As Incurred Pre-Opening Labor Expense $15,000 $50,000 As Incurred Pre-Opening Advertising $1,500 $3,000 As Incurred Miscellaneous Opening Costs $1,000 $5,000 As Incurred Professional Fees $1,000 $10,000 As Incurred Additional Funds – 3 months $16,300 $44,000 As Incurred Total Estimated Initial Investment $626,300 $1,413,500

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Do note that the amount on the table of expenses provided above is subject to change. The franchise is also renewable and the term of agreement is 10 years.

Average Sales / Revenue per Year

According to Restaurant Business Online, Dave’s Hot Chicken reached sales of $79.5 million in 2021.

Dave’s Hot Chicken Franchise Facts

Total Units 70 Incorporated Name Dave’s Hot Chicken Franchising Since 2019 Industry Fast Casual Restaurant Subsector Food and Beverage

Four friends created Dave’s Hot Chicken in May 2017 in an East Hollywood parking lot. Arman Oganesyan, Dave Kopushyan, and Tommy and Gary Rubenyan pooled $900 to start their hot chicken business. The chain’s name was based on co-founder Dave Kopushyan who was a chef that used to work and was trained in Thomas Keller’s French Laundry.

The business started as a pop-up stall with a menu that simply consisted of chicken tenders, sliders, kale slaw, and fries. Dave’s Hot Chicken was a hit and after a year, they grew from a stall to a shop in a strip mall. At present, the business has grown to over 70 locations with branches internationally in the United Arab Emirates, Qatar, and Canada.

The menu at Dave’s Hot Chicken is simple. There are only 4 combo meals you can choose from.

  • 2 Tenders with fries
  • 2 Sliders with fries
  • 1 Tender and 1 slider with fries
  • 1 Slider with fries

Dave’s Hot Chicken is popular for the different levels of spiciness of their chicken. These are:

  • No Spice
  • Lite Mild
  • Mild
  • Medium
  • Hot
  • Extra Hot
  • Reaper

Out of all the spice levels, the Reaper has gotten a lot of attention. It’s allegedly so spicy that you have to sign this waiver when you order it.

Other items on Dave’s Hot Chicken menu are their mac and cheese, kale slaw, regular fries, and cheese fries. They also make chocolate, strawberry, and vanilla milk shakes made with ice cream.

To franchise Dave’s Hot Chicken, fill out the form here. After reviewing your submission, a franchise representative will contact you within 24 hours. Franchise details will be discussed and if you are an ideal match for them, further information such as location, training, and signing of the Franchise Disclosure Document will commence. Do note that Dave’s Hot Chicken is only looking for experienced franchisees as well as those looking to multi-unit restaurant ownership.

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Dave’s is considered as one of the “fastest-growing restaurant chain in the United States” by Restaurant Business Online. At present, the Chief Executive Officer is Bill Phelps, co-founder of Wetzel’s Pretzel’s and an investor of Blaze Pizza. Other well-known investors of the fried chicken chain are Drake, Maria Shriver, and Samuel L. Jackson.

How Much Does Dave’s Hot Chicken Make in Profit?

Dave’s Hot Chicken profits are currently unknown although their sales growth is 262% in 2021 compared to 2020. Dave’s Hot Chicken is riding a broader wave of demand for chicken meals.

Advantages of a Dave’s Hot Chicken Franchise

Dave’s Hot Chicken has seen hockey stick growth over the past 5 years and for several good reasons. Here are a few advantages of this Nashville chicken inspired chain.

Detail Training

Dave’s Hot Chicken offers several training benefits when you franchise with them according to their website:

  • National and local marketing support
  • Gourmet menus and recipes
  • Systems, manuals, and operating procedures
  • Support and Site Selection and many more

By offering a detailed plan like this, operators are able to execute their consistent menu of chicken meals.

Expansion

As mentioned above, Dave’s Hot Chicken is going through a massive expansion. They started with just seven locations in 2020 to having deals of opening around 750 locations. If you franchise with them at this time, then you’ll be a part of their expansion project which means you can be one of the first ones to bring a Dave’s Hot Chicken to your town. First mover advantage like this can be critical in many industries including food.

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Brand

Dave’s Hot Chicken has a cult following. They have over 2 million likes on Tiktok and around 700,000 followers on Instagram. And it’s not just because their fried chicken looks delicious on photo and video. Many claim that the chicken tastes juicy and flavorful so it’s no wonder why the lines are long.

If you franchise Dave’s Hot Chicken, know that what you’re getting is a popular fried chicken name along with delicious tasting fried chicken. You’re also able to leverage a brand name that’s generated plenty of excitement among serious foodies that last couple of years.

Challenges of a Dave’s Hot Chicken Franchise

Before you go ahead and franchise Dave’s Hot Chicken, read through these challenges you might encounter when you franchise with them.

Multi-Unit Franchisees Only

As mentioned above, Dave’s Hot Chicken is only looking to sign multi-unit franchises only. This could be quite a downer if you only have the budget for one unit. Since Dave’s Hot Chicken is a popular brand, I hope they’ll be able to accommodate single unit franchises in the future and support the next generations of entrepreneurs.

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Spice Levels

The different spice levels at Dave’s Hot Chicken are the star of their menu. It makes the whole experience of eating their chicken tenders and sliders enjoyable. But there are some that claim that the Reaper, which is the highest level of spiciness and has garnered attention for having a waiver needed to be signed upon ordering, isn’t all that. A review even claimed that the Reaper was a letdown.

But then again, not everyone has the same spice tolerance or taste preferences. What can be a letdown for some may be more than spicy enough for many.

Competition

Dave’s Hot Chicken isn’t the only fried chicken place out there. There are large fried chicken companies with over hundreds of locations worldwide such as Kentucky Fried Chicken, Buffalo Wild Wings, and Raising Canes. Most of these brands also have an extensive menu that offer a lot of sides as well. While Dave’s Hot Chicken is popular enough with just a simple menu, it has yet to beat big fried chicken brands as of the moment.

Is this a fad?

Ever few years there’s a big food trend that heats up and eventually fizzles out. One concept I always like to think of is frozen yogurt. For a few years, you saw all sorts froyo concepts popping up in cities across America. The question is has the Nashville chicken concept already reached maximum heat? I don’t have an answer for you to this question. Of course, no one on the planet can be accurate at predicting the future of food trends. But it’s something that you should consider before investing.

Is the Dave’s Hot Chicken Franchise Right For You?

There’s no debate that Dave’s Hot Chicken one of the fastest growing franchise brands over the past 5 years. And the demand over fried chicken doesn’t seem like it’s going to die down soon. Dave’s also has a simple menu and a lot of good reviews which can be an ideal franchise from an operational perspective to get in during the early days of a restaurant.

What is an alternative Dave’s Hot Chicken franchise?

If it’s fried chicken with different flavors and spiciness is what you’re after, check out Buffalo Wild Wings. They have over 1,200 locations worldwide and offer flavors such as Teriyaki, Sweet BBQ, Nashville Hot, and their Blazin Carolina Reaper.

To franchise Buffalo Wild Wings, expect investments to be around $2,466,500 to $4,604,800 and the franchise fee is $25,000. To know more about Buffalo Wild Wings, read our full guide on how to franchise them here. With the ever growing demand of fried chicken and growth, Dave’s Hot Chicken is worth a deeper evaluation.