Dave’s Hot Chicken Grows From $900 Investment To $1 Billion Empire

Dave’s Hot Chicken, a fried chicken chain, has seen remarkable growth since its inception in 2017. The company, founded by high school dropout Arman Oganesyan and his friend Dave Kopushyan, started with a mere $900 investment and a tent in a dirty parking lot in East Hollywood. On their first day, they sold just $40 worth of food. However, their perseverance and a bit of luck turned the small business into a $1 billion empire, recently acquired by private equity firm Roark Capital.

Oganesyan and Kopushyan had dreamed of building a business together since their middle school days. After working with renowned chefs in Los Angeles and deciding to become a vegetarian, Kopushyan quit his job to start cooking fried chicken. They pooled their resources with two more friends, Tommy and Gary Rubenyan, to set up shop. Despite the harsh conditions, they managed to turn their business around. A local bar owner noticed their stand and alerted a popular food critic, who wrote a glowing review. The next day, they arrived to find roughly 80 people already waiting in line, and soon they were doing about $60,000 in sales per month.

CEO Bill Phelps credits Dave’s rise to a classic combination of perseverance and grit. He recalls that the founders would take shifts in the car to warm their hands during the winter months. The parking lot was dirty, smelled bad, and had stray cats milling about. However, their decision to open almost every day allowed them to quickly take advantage of opportunities. Initially, they planned on getting the necessary health permit and other approvals before setting up shop. However, Tommy Rubenyan insisted they had to open right away, as they didn’t have the money for these permits anyway. Eventually, a representative from the city’s health department showed up to chastise the team but ended up bonding with the founders over their shared Armenian heritage and offered his help.

Dave’s Hot Chicken now has over 300 locations and continues to meet new challenges with the same persistent, optimistic spirit. Dealing with tariffs and the shock of the COVID-19 pandemic, the company managed to go from doing just 8% to three-quarters of the company’s sales online during the pandemic. The company is now tasting American pickles to avoid levies on Mexican goods. Phelps cites the problem-solving ability of “workaholics” like Bitticks, and the resilience of people as key factors in their success.

Before dealing with the issues of a multinational corporation, Dave’s founders needed to manage their funds without a bank account. Initially, they packaged their daily earnings in a leftover Styrofoam box. One night, all four men drove home without the box. Realizing they had accidentally thrown away the cash, they went back to the parking lot and began digging through dumpsters. Oganesyan, still in his apron, found the money mixed in with discarded oil and peppers. Just as he raised his hand triumphantly, red oil dripping down his arm in the night, a man exited the bar across the street to relieve himself—and freaked out, thinking he had witnessed a murder. Now, it’s fair to say Oganesyan has made a killing.