Dave’s Hot Chicken Franchise Cost, Profit & Payback Period 2024

Dave’s Hot Chicken franchise is a fast-food restaurant that specializes in delicious, spicy fried chicken.

In just a few short years, Dave’s Hot Chicken has become one of the most popular quick-serve restaurants in America.

The chain is known for its generous portions, affordable prices, and commitment to quality, fresh ingredients.

If you’re passionate about food, have an entrepreneurial spirit, and are looking for a profitable business opportunity, opening a Dave’s Hot Chicken franchise could be the perfect fit.

As an aspiring franchisee, you’ll benefit from their established brand identity and proven operating system designed to maximize profits.

In this article, we’ll cover everything you need to know about opening a Dave’s Hot Chicken franchise, including its history, cost structure, and requirements. Read on to find out more.

Dave's Hot Chicken Franchise
Dave’s Hot Chicken Franchise

About Dave’s Hot Chicken Franchise

Dave’s Hot Chicken is the brainchild of four childhood friends who wanted to share their passion for spicy chicken with the world, transforming it from a niche, local food to an all-American favorite.

Since then, the chain has experienced tremendous success and continues to expand across the country.

Dave’s Hot Chicken is committed to making delicious, high-quality fried chicken that satisfies everyone’s craving for heat and flavor.

At Dave’s Hot Chicken, customers can choose from various options ranging from classic fried chicken tenders to Nashville hots, as well as salads, sides, sandwiches, desserts, wings, and more.

Dave’s Hot Chicken prides itself on being an affordable fast-food alternative, offering generous portions at an unbeatable price.


Dave’s Hot Chicken Franchise History

Dave's Hot Chicken Franchise History

Dave’s Hot Chicken started as a humble street food stands in Los Angeles.

In 2017, friends Dave Kopushyan, Arman Oganesyan, and Gary and Tommy Rubenyan pooled $900 to open a small food stand.

Little did they know that the venture would become one of the most popular fast-food chains in the country.

Dave’s Hot Chicken quickly gained traction after being featured on Eater Los Angeles. Encouraged by their success, Dave and his team opened their first restaurant in late 2017.

The following year saw even more growth, with new restaurants popping up around the city as well as further afield.

By 2019, Dave’s Hot Chicken had attracted celebrity investors such as Drake, Samuel L. Jackson, and others who wanted a share of the action.

This helped to fuel the chain’s growth, and Dave’s Hot Chicken started franchising in late 2019.

Now, there are over 100 Dave’s Hot Chicken locations across four countries, with no signs of slowing down anytime soon.


Franchise Model Table

Cost Or FeesAmount
Initial Investment$626,300–$1,413,500
FranchiseYES
Franchise Fee$40,000
Royalty Fee3%
Estimated Outlets100+

How Much Does It Cost To Open A Dave’s Hot Chicken Franchise?

Opening a Dave’s Hot Chicken franchise is an exciting business opportunity with great potential for success.

However, it is vital to understand the associated costs involved when opening a franchise of this kind.

The initial franchise fee is set at $40,000. This cost needs to be paid upfront and covers the rights to use the Dave’s Hot Chicken brand name and logo as well as access to their established operating system.

It also includes training and support from the company staff throughout the process.

The total initial investment required can range anywhere from $626,300 to $1,413,500, depending on a variety of factors such as the specific location chosen for your restaurant, local market conditions, and more.

This amount covers all expenses related to starting up your restaurant, including rent, construction costs, equipment purchases, inventory supplies, and more.

In addition to the initial costs outlined above, there are ongoing fees that must be taken into consideration each year you remain in business.

These include a 3% royalty fee and a 2% advertising fee that is used to help with marketing the Dave’s Hot Chicken brand.


Dave’s Hot Chicken Franchise Requirements

Dave's Hot Chicken Franchise Requirements

Owning and operating a Dave’s Hot Chicken franchise requires a commitment to quality service, high standards of customer satisfaction, and dedication to delivering the best hot chicken experience possible.

Besides the financial requirements outlined above, prospective franchisees must also meet certain operational requirements.

These include having experience in the restaurant business and a commitment to upholding the company’s values when it comes to customer service and quality food.

Prospective franchisees must choose a location that is easily accessible to customers, has adequate parking and seating for customers, and is appropriate for the company’s image.

Dave’s Hot Chicken also requires that all locations have at least two full-time managers plus additional part-time employees as needed.

Employees must complete an approved training program before they can start working, and franchisees must ensure that all employees receive regular ongoing training to maintain the highest standards of customer service.

Finally, franchisees should adhere to all state laws when it comes to health inspections, marketing strategies, and other regulations in order to prevent any legal issues from arising.


Dave’s Hot Chicken Franchise Revenue & Profit

The revenue and profit of Dave’s Hot Chicken franchise outlets can vary depending on the foot traffic, location, outlet size, labor cost, etc.

Also, the company has not revealed any information regarding the financials of its franchises.

However, we estimate that a Dave’s Hot Chicken franchise owner makes $1,490,000 in annual revenue on average, and with a profit margin of 15%, they make nearly $223,500 in annual profits.

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1490000.00
Rent10.63%(158312.50)
Insurance5.31%(79156.25)
Salaries21.25%(316625.00)
Franchise Royalty Fees5.31%(79156.25)
Utilities2.13%(31662.50)
Cost of Goods Sold (COGS)26.56%(395781.25)
Labor (Variable)13.81%(205806.25)
Total (Expenses)85.00%(1266500.00)
Net Profit15.00%223500.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Payback Period Of Dave’s Hot Chicken

With an investment of $1,413,500 and an estimated 15% profit on the average net revenue, the yearly profit would be $223,500.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $1,413,500 / $223,500 = 6.32 years

Based on these figures, it will take approximately 7 years to pay back the initial investment for Dave’s Hot Chicken. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Dave’s Hot Chicken Franchise Training And Support

Dave’s Hot Chicken Franchise offers comprehensive training and support to its franchise owners.

The team consists of experienced professionals with the skills and knowledge to help each owner succeed in running their business.

Franchisees receive dedicated guidance on all aspects of the business, from marketing and operations to customer service and financials. 

Dave’s Hot Chicken also provides franchisees with numerous resources for success, beginning with an initial training program that focuses on the overall operations and customer service of the franchise.

Franchisees also have access to ongoing webinars and seminars, a comprehensive library of materials, and personalized support from the company staff.


Dave’s Hot Chicken Franchise Terms Of Agreement & Renewal

When signing up as a Dave’s Hot Chicken franchisee, the initial term of the agreement will be 10 years.

Throughout this time, all established requirements and fees must be met in order to ensure that the franchise remains in good standing.

At the end of the 10-year period, the franchisee can choose to extend their agreement with Dave’s Hot Chicken by renewing their contract.

In order to do so, franchisees must demonstrate that they have been successfully meeting all requirements of the agreement and pay a renewal fee.

The exact amount for this fee depends on various factors, such as the length of time since the last renewal, location, and more. Generally, the renewal fee is 50% of the initial franchise fee.

It is important to note that any unresolved disputes or non-compliance issues must be addressed before a new agreement can be put into place.


Dave’s Hot Chicken Franchise Obligations And Restrictions

Dave's Hot Chicken Franchise Obligations And Restrictions

When considering starting a Dave’s Hot Chicken franchise, it is important to be aware of the obligations and restrictions that come along with being part of this chain.

As a Dave’s Hot Chicken franchisee, you will be expected to adhere to certain standards and expectations.

For instance, all locations must maintain the same menu and services offered at other Dave’s Hot Chicken franchises throughout the US, Canada, UAE, and Qatar (as well as any future locations).

Additionally, franchisees must use approved advertising and promotional materials, as well as designated suppliers for food items.

In addition to these requirements of the business itself, franchisees are also obligated to follow all relevant laws and regulations in their state or country.

Furthermore, certain restrictions may be imposed if a franchisee wishes to sell their business in the future.


Dave’s Hot Chicken Franchise Financial Assistance

Dave’s Hot Chicken does not provide direct financing to their franchisees, but they do offer several third-party financing options that can be beneficial to prospective business owners.

By leveraging relationships with partner organizations and external lenders, Dave’s Hot Chicken provides access to loans and other financial assistance options that can help budding entrepreneurs launch their businesses.

These loan programs may feature flexible repayment terms, low down payments, and favorable interest rates, depending on the lender.

SBA loans are another option for those seeking financial assistance to open a Dave’s Hot Chicken franchise, as the company has been approved by the United States Small Business Administration.


Dave’s Hot Chicken Comparison

CompanyDave’s Hot Chicken Raising Cane’s
Year Founded20171996
Franchise Fee$40,000$45,000
Initial Investment$626,300–$1,413,500$768,100–$1,937,500
Number of Outlets100+600+

Conclusion

Dave’s Hot Chicken is a popular and rapidly growing franchise with locations across the United States, Canada, UAE, and Qatar.

With its unique menu offerings, dedicated support network, and financial assistance options, anyone looking to start their own business can find success in a Dave’s Hot Chicken Franchise.

Now that you know the basics of opening a Dave’s Hot Chicken franchise, you can make informed decisions about whether or not this is the right business opportunity for you.


FAQs

When Did Dave's Hot Chicken Start Franchising?

Dave’s Hot Chicken began franchising in late 2019, opening 2 locations in Los Angeles’ Koreatown and North Hollywood neighborhoods.

Who Is Dave's Hot Chicken Owned By?

Childhood best friends Dave Kopushyan, Arman Oganesyan, and Gary and Tommy Rubenyan are the four owners of Dave’s Hot Chicken.

How Many Dave's Hot Chicken Locations Are There?

There are currently over 100 Dave’s Hot Chicken locations across 4 countries, including the US, Canada, UAE, and Qatar.

Is Dave's Hot Chicken Franchise Worth It?

If you’re passionate about food and providing a great customer experience, then a Dave’s Hot Chicken franchise may be worth considering.

The brand offers generous support to its franchisees and is widely popular.

Who founded Dave's Hot Chicken?

Dave’s Hot Chicken was founded by Armenian-American friends Dave Kopushyan, Arman Oganeshyan, Tommy Rubenyan, and Gary Rubenyan.

Where is Dave's Hot Chicken headquartered?

Dave’s Hot Chicken is headquartered in Pasadena, California.

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