Dave’s Hot ChickenFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Dave’s Hot Chicken franchise requires a total initial investment of $620K – $2.0M, including a $40K franchise fee and an ongoing 6.0% royalty[2]. The 2024 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: D. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $620K – $2.0M
- 37th pct Service Resta…
- Avg gross sales
- N/A
- 28th pct Service Resta…
- Royalty
- 6.0%
- 26th pct Service Resta…
- Units
- 169
- 44th pct Service Resta…
- SBA default
- N/A
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
The system grew 87% year-over-year. Fast growth means demand, but can strain support.
Bottom line
- Total investment $620K – $2.0M including a $40K franchise fee, 6.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict D (Below Average) with a risk score of 77/100.
- System growing at 563.6% CAGR over 3 years with 169 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Dave’s Hot Chicken Franchise Co., LLC
- Predecessor
- or parent entities
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 600 Playhouse Alley, Unit 504, Pasadena, CA 91101
- Auditor
- Baker Tilly US, LLP
- Audited financials
- Franchisor revenue
- $46.6M
- vs $27.8M prior year
Overview
About
Franchisees operate quick-service chicken restaurants featuring Nashville-style hot chicken sandwiches and sides. Day-to-day operations include food preparation, inventory management, point-of-sale transactions, staff scheduling, and quality control across breakfast-to-dinner service models, with growing delivery/third-party platform integration.
- CEO
- William L. Phelps
- Headquarters
- CA
- Founded
- 2018
- FDD year
- 2024
- States available
- 31
FDD Item 7 · 2024 filing · 25 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Architect / Engineernot refundable | $14K | $50K | |
| Business Licenses and Permitsnot refundable | $1K | $30K | |
| Construction, Remodeling and Leasehold Improvementsnot refundable | $275K | $875K | |
| Equipmentnot refundable | $110K | $315K | |
| Furniture, Fixtures and Decorationsnot refundable | $12K | $100K | |
| Smallwaresnot refundable | $11K | $18K | |
| Signagenot refundable | $17K | $110K | |
| Graffiti and Artworknot refundable | $30K | $70K | |
| Grand Opening Kit, Menu Boardsnot refundable | $13K | $15K | |
| Drive-Thru, Loop Timers and Signagenot refundable | $0 | $35K | |
| Computer Equipment and Information / POS Systemsnot refundable | $14K | $40K | |
| Office Suppliesnot refundable | $1K | $3K | |
| Uniformsnot refundable | $2K | $5K | |
| Initial Inventory and Suppliesnot refundable | $20K | $50K | |
| Insurance Deposits | $2K | $4K | |
| Liquor Licensingnot refundable | $0 | $10K | |
| Pre-Opening Rentnot refundable | $5K | $20K | |
| Initial Trainingnot refundable | $12K | $23K | |
| New Restaurant Opening Feenot refundable | $0 | $15K | |
| Total initial investment | $620K | $2.0M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $620K – $2.0M
- Better than avg vs category
- Liquid capital req'd
- $16K – $48K
- Better than avg vs category
- Franchise fee
- $40K
- Better than avg vs category
- Royalty
- 6.0%
- Gross Sales · typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 10.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Technology fee | $500 |
| Transfer fee | $20K |
| Renewal fee | $20K |
| Inventory (initial) | $20K – $50K |
| Total fee load | 10.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Full-Service Restaurants averages
How Dave’s Hot Chicken Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 169
- Opened
- 69
- Last reporting year
- Closed
- 1
- Turnover rate
- 0.6%
- Company-owned
- 23
- Corporate units in the system
- % franchised
- 86%
- vs corporate-owned
- Net growth (yr3)
- +87.2%
- Net unit change last year
3-year detail · Item 20
- Opened (3yr)
- 68
- Transfers (3yr)
- 1
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 10
- Loan volume
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Dave’s Hot Chicken's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 4 lenders with concentration factor
- Per-state charge-off rates across 4 states
- Startup risk premium and job creation velocity
- 3-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Aggressive growth-stage franchise with material financial transparency gaps, undefined unit economics, and expansion velocity that outpaces typical market maturation.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Largest disclosed settlement: $40,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Baker Tilly US, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: No
Score breakdown · what drove the 77 / 100 rating
- 01MEDNo Item 19 (Average Unit Volume) disclosed — impossible to assess ROI or payback period against $619,800–$1,963,000 investment range
- 02MINORExtremely wide investment range ($1,343,200 spread) suggests highly variable unit economics or undefined buildout standards
- 03MINORRapid expansion (87.2% YoY growth) at 169 units creates saturation risk and may indicate franchisee cannibalization in key markets
- 04MED6% royalty on undisclosed revenues provides no transparency on actual franchisee profitability or franchisor sustainability
- 05MEDHigh initial investment with no disclosed average net income creates severe visibility gap for ROI analysis
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 2 |
| Territory type | radius, zip codes, or other written description |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | laws of the state where the Franchisee’s Dave’s Hot Chicken Restaurant is located |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 18 hrs
- On-the-job training
- 48 hrs
- Training location
- On-site and corporate
- Site selection
- franchisee
- POS system
- approved POS system
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: approved POS system
Item 20 · call current owners
Franchisee Contacts
62 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Dave’s Hot Chicken · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Dave’s Hot Chicken franchise?
The total investment to open a Dave’s Hot Chicken franchise ranges from $620K – $2.0M, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Dave’s Hot Chicken franchise owners earn?
Dave’s Hot Chicken does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Dave’s Hot Chicken's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Dave’s Hot Chicken (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Dave’s Hot Chicken franchise locations are there?
As of their most recent FDD filing, Dave’s Hot Chicken has 169 total units in the United States, including 22 franchised units and 23 company-owned units. 69 new units were opened in the latest reporting year.
Is Dave’s Hot Chicken a good franchise to buy?
FranchiseVerdict rates Dave’s Hot Chicken as a D-grade franchise with a risk score of 77 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.