Dave's Hot Chicken Sizzles on the Investment Grill

Dave's Hot Chicken, the popular fried-chicken chain partly owned by rapper Drake, is considering a sale potentially valued at $1 billion. The chain, known for its Nashville-style chicken, operates over 250 locations worldwide and is attracting interest from private equity firms amid rising labor and operating costs.

Dave's Hot Chicken, a popular fried-chicken chain with rapper Drake as one of its investors, is weighing a potential sale that could value the company at roughly $1 billion, sources revealed on Tuesday. The Pasadena-based chain has engaged North Point, an investment bank, to assist in the sale process, attracting interest from private equity circles.

The decision comes amid economic challenges as restaurant operators, including Dave's, grapple with escalating labor expenses and heightened inflation pressures, pushing some to raise menu prices as a countermeasure. Despite these hurdles, Dave's has thrived on the rapidly increasing consumer demand for chicken, boasting over 250 locations and approximately $1 billion in annual sales.

Established in 2017 with just $900, Dave's emerged from an East Hollywood parking lot, later enlisting the financial muscle of renowned figures like actor Samuel L. Jackson and Drake. With a franchised business model and a substantial portfolio of over 1,000 franchise rights in the U.S., Middle East, and Canada, the chain's steady royalty streams make it an attractive prospect for private equity. Recent restaurant industry deals highlight the sector's ongoing appeal to investors.

(With inputs from agencies.)