Dave’s Hot Chicken is an Outstanding Operator.
It is no mystery why Dave’s Hot Chicken is so attractive to private-equity firm Roark Capital, which announced last week its intentions to purchase it for roughly $1 billion. This is a franchise that in only its seventh year experienced nearly 100 percent sales growth, climbing to $406 million in systemwide revenues, while operating 260 units. It’s franchise with evidently no ceiling. The only surprise is it took Roark this long.
The brand’s secret operational sauce is hot all right, a blend of data analysis and contrarian strategy.
Jim Bitticks, president and chief operating officer of Dave’s Hot Chicken
“I’m anti-first-party delivery,” said Jim Bitticks, president and chief operating officer of Dave’s Hot Chicken, in an interview, noting that about 37 percent of its overall sales comes from off-premise. “The third-party delivery providers specialize in it and we allow them to be the delivery people and we stay in our lanes of in-person and pick-up experiences.”
The art of labeling orders accurately
Those are busy lanes these days. It emulates the strategies of two of America’s largest brands in managing and fulfilling mobile orders.
“We label every single product that comes out of the kitchen with its own individual label, so it looks like FedEx and Starbucks combined,” he said. “We put a label on the item at the beginning and it stays on the product all the way until it gets to the guest, so it’s less likely to get mixed up or served incorrectly.”
The process runs smoothly, thanks to a POS from Qu, a KDS from QSR Automations, and integrations from Olo, who have all helped the brand evolve its operations.
Moving away from tablet hell
“We used to have three tablets in every store, back when we only had four restaurants,” he said. “That was a challenge because you would have to take what’s on the table and input it into the POS, which is problem when you don’t have it integrated.” If you don’t input the orders in the right way you’re upside down. And that can impact how sales are reported. Olo has been transformative.”
As has Loop AI, a new partner proving a steady hand.
“It’s a third-party management platform that we started working with about a year and a half ago,” he said. “It’s helped us recover refunds. It’s cut them more than in half. Our refund number used to be 1.1 percent of third-party sales and now it’s down to under half a percent.”
Growth areas
Now that the brand is getting larger it’s thinking bigger.
“Large orders is big initiative for us in 2025,” he said, noting that last month it launched a systemwide initiative with EZCater. “We see catering as a big opportunity for growth.”
Doing more with loyalty
The brand has a mobile app and a loyalty program in place, which were established back in its rapid growth days. Bitticks notes that the brand intends to do more with rewards.
“We launched our app a couple years ago solely to improve the ordering experience for heavy users,” he said. “At the time we had maybe 80 restaurants open and we were sort of in the mode of not worrying a lot about loyalty but just improving the ordering experience. To this day our loyalty program is skewed generously in favor of the guest, which is fine, as our overriding thought is always make the value better for the guest and not necessarily for us. But we’re starting to test out messages we send to consumers about new products through the data that we get off the app.”
Steadfast in its delivery approach
Even under potentially new owners, the brand isn’t likely to alter its approach to delivery. “We won’t be doing first-party delivery anytime soon,” he said.
It’s a philosophy that emerged during the pandemic.
“Back in the middle of Covid, when we had only four restaurant opens, we were all single-makeline restaurants, which meant we had high wait times for both in-person guests and delivery guests,” he said. “We started putting in second makelines as we built out our system. And we put a lot of effort into improving operations around our pick-up windows. In a lot of ways that was a result of all the third-party delivery we had. Third-party has been good for us. A lot of our demographic are young consumers and that’s where they order.”
The Outstanding Operators Program highlights 20 innovative brands taking creative paths to success with all things off-premises. Each winner receives a $1,000 charitable donation to its organization of choice and will be recognized on-stage at the 2025 Food On Demand Conference. Register today!
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