Arman Oganesyan, once a struggling stand-up comedian making just $50 a night, embarked on an extraordinary journey to build a billion-dollar business with his two childhood friends, Dave Kopushyan and Tommy Rubenyan.
In 2017, they pooled together $900 in savings to launch Dave’s Hot Chicken as a pop-up venture in a Los Angeles parking lot, focusing on Nashville hot chicken.
Fast forward to 2023, private equity firm Roark Capital purchased a majority stake in the rapidly growing franchise, now boasting over 300 locations, for nearly $1 billion, according to the company’s CEO Bill Phelps.
“It’s insane what we did,” Phelps told CNBC’s “Squawk Box,” praising Oganesyan’s visionary approach despite his high school dropout status.
The road to success, however, was not without its challenges. Kopushyan, a seasoned chef with experience at Michelin-starred restaurants, initially expressed skepticism about the idea, stating, “‘Chicken? First of all, I don’t even like chicken.'” After some persuasion, he joined the team, allowing them to seek additional investors, though they faced rejection from many friends until Rubenyan stepped in.
With their combined efforts, the group developed their signature Nashville hot chicken recipe, inspired by the popular Howlin’ Ray’s in Los Angeles.
Months were spent sampling various chicken establishments, watching documentaries, and experimenting in Kopushyan’s kitchen.
While some unconventional ideas, like incorporating gummy bears, were dismissed, unexpected culinary discoveries emerged, such as using pickle juice after some chicken was tossed into a nearly-empty pickle jar, leading to delightful results.
As Oganesyan noted, “It was a lot of belief with a lot of doubt.”
Once they were ready to sell, financial constraints prevented them from acquiring a food truck. Instead, they set up shop in a parking lot in East Hollywood, equipped only with a $150 fryer, borrowed tables, and a heat lamp.
Their first night was modest, with only four meals sold, earning them $40 from Oganesyan’s girlfriend and her friends. However, within just five days of operating, word of mouth led them to catch the attention of former Eater Los Angeles food critic Farley Elliott.
This exposure led to a rapid increase in business, with Oganesyan recounting how they began selling out and generating several thousand dollars in revenue each night within months.
By the end of their second month, the trio finally paid themselves, each taking home approximately $10,000, a significant amount for Oganesyan who remarked, “It was the most money I’d ever seen in my life.”
A year after launching, they expanded their team by bringing in Rubenyan’s brother, Gary, to assist in opening their first storefront.
The company’s growth caught the attention of investors in 2019, including notable figures like actor Samuel L. Jackson and television personality Michael Strahan, who recognized the potential of franchising the brand.
Bill Phelps, appointed as CEO in the same year, has overseen the expansion of Dave’s Hot Chicken into several states across the U.S. and international locations in Canada, the U.K., and the Middle East.
In the U.S. alone, the company reported over $600 million in systemwide sales last year, experiencing a remarkable 57% growth compared to the previous year.
Looking ahead, Dave’s Hot Chicken is expecting to achieve $1.2 billion in sales this year while being deemed “extremely” profitable at both franchise and corporate levels, as stated by Jim Bitticks, the company’s president and COO.
Although the details of the recent deal with Roark Capital remain undisclosed, Phelps confirmed that Oganesyan, Kopushyan, the Rubenyan brothers, and Phelps himself will retain minority stakes and continue their roles within the company.
Phelps reflected on the timing of the deal, noting, “We were at an inflection point where we could get an incredible valuation, and yet there was still significant upside for Roark—so that’s the perfect place to be.”
In an era where entrepreneurship often appears daunting, the story of Dave’s Hot Chicken serves as an inspiring reminder that with belief, perseverance, and a touch of culinary creativity, remarkable success is achievable.
image source from：https://www.nbclosangeles.com/news/business/money-report/3-friends-launched-chicken-finger-stand-in-la-parking-lot-with-900-it-just-sold-in-deal-worth-close-to-1-billion/3715506/
