Subway owner acquires popular chicken chain in $1 billion deal

Roark Capital, which owns Subway, has acquired Dave's Hot Chicken in a $1 billion deal that will fuel the chicken chain's restaurant expansion, according to Fox News. Roark Capital is an private equity firm that's been buying up established franchises.

The deal was announced Monday and brings Dave’s into Roark’s growing portfolio of brands that includes Subway, Dunkin’ and Buffalo Wild Wings.

“Our entire organization is excited about the fit between Dave’s Hot Chicken and Roark, and we’re looking forward to continuing to blow our guests’ minds and unlocking growth and value for our franchise partners,” said Dave’s CEO Bill Phelps in a statement.

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Dave’s Hot Chicken began in 2017 as a humble pop-up in a Los Angeles parking lot and has since expanded to over 300 locations. According to Yahoo Finance, the brand has sold licensing rights for more than 1,000 locations across the U.S., Canada, and the Middle East. Approximately 155 new locations are slated to open this year. The four childhood friends who founded the business will remain actively involved in its growth, as reported by the Associated Press. With only $900, the trio launched Dave’s Hot Chicken in a parking lot using portable fryers and folding tables. Shortly after, they opened their first brick-and-mortar restaurant.

Known for its wildly popular Nashville hot chicken, the chain has attracted high-profile investors, including musician and actor Drake, as well as former NFL player and TV personality Michael Strahan.

How did the deal happen?

In 2019, they partnered with former Wetzel’s Pretzels CEO Bill Phelps to launch franchising efforts for the Dave’s Hot Chicken brand.

Since then, the company has sold franchise rights for over 1,000 locations across the U.S., the Middle East, and Canada. Atlanta-based Roark Capital, which manages $40 billion in assets, already has a strong presence in the restaurant industry through its acquisitions of Arby’s, Culver’s, and most recently Subway in 2024. Roark also holds investments in GoTo Foods and Inspire Brands, a major fast-food franchise operator.

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"This is one of the great entrepreneurial journeys of our time, and now we begin the next chapter in the story," said Phelps, now Dave’s Hot Chicken’s CEO.

Inspire Brands is the parent company of Arby’s, Dunkin’, Jimmy John’s, Sonic and Buffalo Wild Wings. GoTo Foods owns Auntie Anne’s, Carvel, Cinnabon and Jamba.