### Roark Capital Secures Majority Stake in Fast-Growing Dave's Hot Chicken

Private equity giant Roark Capital has acquired a controlling interest in Dave's Hot Chicken, a rapidly expanding restaurant chain renowned for its spicy chicken tenders. Although the financial details of the transaction remain undisclosed, Dave's CEO Bill Phelps indicated that the deal’s valuation is "pretty close" to $1 billion during his appearance on CNBC's "Squawk Box."

Founded in a Los Angeles parking lot in 2017, Dave's Hot Chicken has seen explosive growth, now boasting over 300 franchised locations. This rapid expansion is mirrored by the chain's U.S. sales, which surged by 57% last year to exceed $600 million, according to market research firm Technomic.

Roark Capital's investment comes on the heels of an industry-wide boom in chicken-focused restaurants, ignited by the "Chicken Sandwich Wars" of 2019. Brands like Dave's and Raising Cane's continue to challenge established giants such as KFC, a subsidiary of Yum Brands. Younger consumers’ increasing appetite for spicy food has also fueled Dave's rise. The restaurant offers a range of spice levels, including an extremely hot "Reaper" option that requires a waiver due to its intensity.

Leadership at Dave's remains largely unchanged post-acquisition. Phelps, along with co-founders Arman Oganesyan, Dave Kopushyan, and brothers Tommy and Gary Rubenyan, will continue in their roles and maintain minority equity stakes. Notably, Phelps has a track record of leadership, having steered Wetzel's Pretzels for 25 years before joining Dave's in 2019.

Roark's strategic investment is expected to offer significant advantages, including access to an international supply chain and the capability for rapid global expansion, potentially reaching up to 4,000 locations worldwide in the next decade. "The timing was absolutely right," Phelps remarked, emphasizing that both parties stood to gain considerably from the deal.

Despite the fast-paced growth, Dave's Hot Chicken plans to retain its original business practices, such as a streamlined menu and a focus on quality over speed. Jim Bitticks, the chain’s COO and President, affirmed that these principles would remain intact under Roark’s ownership.

Roark Capital's acquisition of Dave's Hot Chicken is their first major restaurant deal following their $9.6 billion purchase of Subway in 2023. The firm’s portfolio already includes well-known brands under Inspire Brands and GoTo Foods, such as Arby's, Dunkin', and Cinnabon.

Celebrating the deal, Phelps announced plans to distribute significant bonuses to dozens of employees, from support center staff to restaurant assistant managers, effectively creating 20 new millionaires within the company, as highlighted by Oganesyan.