How I Built This with Guy Raz - Dave’s Hot Chicken: Arman Oganesyan

Episode Date: June 10, 2024

Dave’s Hot Chicken began as a tiny pop-up, selling spicy chicken tenders and fries from a tent in East Hollywood. Their homemade take on Nashville Hot Chicken was an overnight sensation in a city that had barely heard of it, and within days, co-founder Arman Oganesyan and his partners were working frantically to serve the long lines out front. Since launching seven years ago, the pop-up has grown into a chain of 200 stores, with franchises across the country, and a beloved rubber chicken mascot.This episode was produced by Sam Paulson with music by Ramtin Arablouei.It was edited by Neva Grant with research help from Katherine Sypher. Our audio engineers were Robert Rodriguez and Patrick Murray.You can follow HIBT on X & Instagram, and email us at [e-mail] sign up for Guy’s free newsletter at guyraz.comSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place with all of its personal touches and its amazing location could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Hey, really quick before we start the show, we have an announcement about a really exciting new thing we're launching. A newsletter. And like our show, the newsletter is designed to be interesting, informative, inspiring, and most importantly, fun. It's 100% free. And to sign up, just visit guyraz.com. That's g-u-y-r-r-z.com. I heard that at some point you guys actually threw away your cash. Like you had a bag of cash and you threw it in a dumpster.

We did it. Dude, so when we finish every night? Because it wasn't the best neighborhood, right? And throughout the night, what we do is we put our cash away in like a styrofoam container, like one of our to-go containers. So one of the nights, we're cleaning up, and then we get to Tommy's house, and we're like, okay, we're like, who has the cash so we can count it? And then Tommy's like, I think Dave has it. And I'm like, hey, Dave, do you have it? He's like, no, I thought you had it. And we kind of realized pretty early on that we probably threw it away with the other sour foam containers. So we had to go across the street to our main dumpster, this big dumpster. And I jump in the dumpster, and the funniest thing is the money happened to be in the bag that we threw away our oil mix in.

So the money was covered in, like, red oil. I mean, we were spending red money. It looked like we had robbed the bank. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how a pop-up chicken stand in a parking lot grew into one of the most celebrated fast food joints in the country, Dave's Hot Chicken. I really hate standing in line. I'm just wired that way. I'd rather have a good enough cookie than wait two hours for the world's greatest cookie.

It's just not worth a time to me. But I admit, I'm kind of an outlier. And how do I know that? Because every single day, I pass people willing to wait for over an hour to eat that special thing. A cupcake, a croissant, a burger, boba tea, gelato, whatever it is. These are people who are essentially telling you and me, if you're not waiting, you're crazy, you're missing out. Now, the thing is, if you have the power to generate this kind of line with your product,

it better live up to the hype because after two hours of standing, that cookie better blow our minds. If not, your business probably won't last that long beyond the hype. So the key is to figure out how to build hype and keep people coming back without getting frustrated. Now, this is actually an interesting business strategy, a way to think about the kind of brand you want to build. And it's precisely how the founders of Dave's Hot Chicken thought of their brand,

even before they fried up their first batch of chicken. The company was founded in 2017 by four friends who met his kids. But Dave and Dave's Hot is Dave Capuchian. He's a chef who worked on the line at some of the top restaurants in California. and Dave came up with a recipe for their Nashville-style hot chicken tenders and sandwiches. But the idea for the business came from Dave's best friend, Armand Ogenessian. Armand was the hype man. He was the guy who came up with the plan to build the buzz.

Dave's hot chicken started with the kind of supplies you buy at Home Depot, a plastic fold-out table, a simple accordion canopy tent, a few propane tanks, and they set it up in a parking lot in East Hollywood. But within days of opening, the wait for Dave's Hot Chicken could sometimes stretch for hours. And not just that, but those same people were willing to come back and wait again. So how did they do it? How did they expand from a parking lot pop-up in 2017 to a chain of more than 200 restaurants in six countries today? Well, a big part of it was the product, of course, but the other side was execution.

Armando Ganesian, who you'll hear in this interview, was born in Armenia and came to the U.S. as a toddler. His parents settled in Los Angeles into the tight-knit Armenian community there. His dad worked as an auto mechanic and made sure that his kids spoke Armenian in the house. So my dad used to always say that, like, you live in America, so you can learn English at any time. But if you forget how to speak Armenian or if you don't learn it, it's going to be really hard to learn it, like, as you're older. So growing up, we were only allowed to speak Armenian inside the house. I love that. Yeah, it was cool.

I mean, I'm, I used to not like it so much, but as I grew up, I realized how that really helped me. And, you know, if it wasn't for that, I might not be so fluent in Armenian. Yeah. I mean, not a super useful language, like, outside of Armenia, but super useful if you're, like, somewhere stranded and there's another Armenian. and you can connect right away. And you know what's actually really interesting about it is because Armin is such an old language and it has so many different sounds.

And growing up, I did like acting and comedy. So it really helped me with like learning different accents and learning like different impressions because I was so used to pronouncing different sounds, you know? So it kind of like came in really handy as I got older. Yeah. And I guess you really got into acting as you got older. I think you even left high school.

I guess you dropped out. in your junior year to pursue acting full time. Yeah. So right after I got out of high school, I went to a local acting school. And then through the acting school, the teacher, like, I think immediately noticed that I was pretty good.

So she recommended me to an agent. So, you know, I started doing little auditions here and there. But I realized it was a lot harder than I thought it was. Yeah. I think everybody assumes as soon as you start, you're going to get discovered. And it's obviously the reality is not like that. And so it was like a, it was like a nice awakening.

So like, all right, you start to take some acting classes and you start to audition. Did you get any hits? Did you get any gigs in the first couple years? No. So by the time I started auditioning, I was like 17 and a half. Yeah. And for like a couple of years, I did auditions up until like maybe like 20. And then I was like, you know what?

I'm like, I don't think I want to do acting. I think I want to do comedy. So I started making Vine videos. And it really actually blew up like, I got a lot of like, Armenian followers and you know I was kind of popular and people really like the videos and what were you what were the videos like can you give me like a so I was getting yeah I was getting creative with mine so I started making mine out of the box and I was like oh it's an Armenian superhero problems and Armenians have a problem of being late so the superhero was always late to whatever

he needed to save so he never got to save the so it's like little like the crime happened and then the Armenian superiors like oh I'm late yeah exactly so there was like episodes like that yeah so people were there was more creative than what people were making so it got it got some followers. And then I kind of like leverage that into like doing some live shows, you know, like doing sketches and stuff. You know, I eventually transitioned from that doing stand-up comedy. I just, I didn't have like a direct path.

I didn't, at the time, I didn't understand how I can go from stand-up to making money. And I was making no money. I was making like 50 bucks a night doing stand-up. All right. So you, you essentially are trying to figure this out. but it's not necessarily clicking. And meantime, I mean, you're one of your best friends, this guy Dave, right? Yeah.

Dave Capuchian. He goes off to study culinary. He goes to culinary school. He basically decides, I want to be a chef. But I guess, from what I understand, you guys had always kind of talked and dreamed about maybe one day doing something together. Yeah. Later on. So when we initially met, we met right around like middle school.

And he was already very into food. And I remember like obviously me and Dave Hungat throughout the years and, you know, every time I'd see him, he'd have like a bunch of cookbooks with him and he was like learning recipes and he'd work at a restaurant for like six months and he'd kind of like master the type of food and he'd move on to the next one and then he'd move on to the night. And he was so passionate about food. So he was putting all of his effort into it. And I guess at a certain point he even did a stint at French Laundry, probably the most famous restaurant in the United States. Yep, yep, yep, yep, he did. I mean, that is a high pressure environment. So Dave is doing all this stuff.

And in your mind, thought of Dave as somebody you might do something with one day. Yeah. So clearly around food. Yeah. Well, it wasn't originally around food. So obviously, as we were getting older and as comedy wasn't paying so well, and obviously as Dave realized being a chef doesn't pay that well. So funny enough, restaurants were never something we thought about.

I had no knowledge in restaurants. Yeah. But I think also because Dave, Dave and me, I kind of talked about how, especially the types of restaurants that he was working in, the profit margins were probably very small because of the type, you know, the type of prep that went into it and the quality of food that went into it. So it didn't seem like a, and again, me being a person that had no experience in food, I didn't think that like I had any knowledge of like how to help out Dave in any way, shape, or form. Yeah. And so, I mean, how is your just state of mind at that time? I mean, you're like, you know, 24, haven't really yet kind of figured out what you want to do, which is fine, totally normal. Nothing wrong with that if you're listening to your 24, but it can create anxiety and you watch your friends and they seem like they have it all figured out even though they don't. I remember that time in my life. How are you feeling at that time? Were you anxious? I mean, obviously we had our parents that weren't putting pressure on us, but we can kind of. of see that they can't work as hard as they used to, right? So you have that pressure on you.

You're obviously have a little bit of self-regrret. You're like, should I have studied? Should I have stayed in school? Would it have been easier to do something? You know, you start thinking to yourself, like, okay, what life skills do I have? How could I? You know, so you have, you do have a lot of anxiety. You have a lot of self-doubt. But at the same time, what's, what's interesting is me and Dave always kind of had in the back of our heads that something is going to click for us one day. So it was like a mixed mindset, you know. There was a lot of, like, belief with a lot of doubt. Yeah.

All right. The story that I, from what I understand, but it seems too simple. So it's probably more complex is that around 2016, you go to this place called Howland Raised Hot Chicken, which is a Nashville hot chicken restaurant based in L.A. Yeah. You have a sandwich there, hot chicken sandwich, which is basically a fried chicken sandwich just bathed in spices, like fiery flaming. chili spices. And it just blows your mind. Is that the story? Tell me the story. It's really close. So I was, I loved fried chicken. That was like my favorite food, right? So one day one of my friends, Andy, is like, hey, he's like, there's this really good hot chicken place. We should go try it out.

So we get there and there's like a four hour line. It was a huge line. Yeah. And I'm like, dude, this is all for a chicken sandwich? Nothing's worth four hours. I know. And I was like, dude, This is all for a chicken sandwich, and he's like, yeah. And then as we, you know, got closer and we tried it, it was one of the best sandwiches I've ever had. You know, being a fried chicken fanatic, it was a great sandwich. So naturally, I went back a few times, and I feel like they had too much on their menu for the line they had. And I felt there was too many options because me and 95% of the people I knew in the line were just getting the sandwich. And I've been in the situation where you're like in line, and you're like, I know what I want.

And you're like five people. It's like six people deep. And you're like, oh, my God, are you kidding me? And then they bring the family members up. And then everybody looks at the menu and their time. Which, by the way, I have Stodian a line at In-N-Out Burger that seems so insurmountable. It was like 15 people deep. And it moves so fast.

You are in the front line in five minutes because there's only a couple things order. Yeah. And when people, so like now these people will always tell us like, oh, you guys should check out this place. They have a huge line. Check out this piece. I have a huge line. And what I always say is like, I'm like, it's not that hard to have a huge line. You can artificially have a long line.

You can take orders slower. You can give them out slower until more and more people pile up. What shows like a true quality of a restaurant is having a long line but getting through it really fast. Because that means you have, besides having a lot of customers, you have really good operations. You're able to get all these customers there are food in a reasonable amount of time versus people waiting three hours for, you know, a sandwich. Yeah. So I feel like even though they had a long line, I felt like there were some things they weren't doing that right. You know what I mean?

And on top of that, I was like, yeah, fried chicken is its own category, but hot chicken is not. That's a pretty new category. It existed in Nashville. In 2016, it was a new category. Brand new, yeah. I mean, it existed in Nashville and Johnny had tried it, the chef of Hall & Ray's, and he liked it enough to bring it to L.A. And then we tried it. So by the time we had tried it, it was really only in two places.

Yeah. Right. And we saw how people, how much people love this food. Like the, I mean, hot chicken is a great food. I mean, the mixture of all those spices, it's kind of hard to top that flavor. Right. Yeah. So over time, as I saw it, I'm like, that's when the restaurant thing kind of kicked in. And it was so funny because I was like, dude, I'm like, I'm like, I'm like, I'm like, Dave is a chef, dude. I'm like, and it was funny that you said that. I was like, why haven't we, like, thought of anything like a restaurant necessarily? But that's why I clicked that we had him because there was never like a food or like a. a genre of food that me and Dave, because me and Dave have completely opposite pallets, right? I'm like fast food. I like fast food, like Big Macs and things like that and junk food. He's caviar and foie gras. Exactly.

He's like, I see notes of this and that, and I'm like, I think it's bad. So we had, and it's funny Dave will say, he's like, Armand is never somebody I thought I'd get into a restaurant business with because our palettes were so opposite, you know? But you wanted him to try this fried chicken, with hot chicken? Yeah, I remember when I told him, I'm like, hey, dude, I'm like, wouldn't it be interesting if we opened up a chicken restaurant? And I remember he's like, chicken.

He's like, first of all, I was like, I don't even like chicken. He's like, I don't even eat chicken. And he's like, I'm so close to being a sous chef at my restaurant. And he's like, why would I give that up? Yeah. And I think what really convinced him is I remember telling him. And I told him I was dead honest when I told him. I'm like, look, dude, I'm like, you're an amazing chef.

You know, the guy that started Hallamade is a great chef. And look at the line he has when he made, with the sandwich he made. I'm like, if there's anybody in the world that can make a better chicken sandwich and have a bigger line, it's you. And I kind of saw a little flame in his eye. He's like, okay, he's like, let's try it out. So we eventually, obviously, went to Helen. We tried it out. And again, he was like mind-blown.

Like, as a chef, I'm sure to him, it was even crazier, like the flavor profiles and, you know, all the different peppers. So he was in it. He's like, I love it. He's like, I'm in it. Let's do it. And it was like traditional, like two pickles, sauce, hot chicken. Yeah. It's a great fried chicken sandwich.

I mean, it's really hard to eat and not like it. So you start to, so basically you say to him, let's kind of brainstorm this thing. Let's just start talking about what this could be. Is that kind of how it started? This is, I guess, in late November of 2016. So Dave was on board. And then what we kind of talked about is like, okay, well, we don't have too much money. but what we could probably do is ask a bunch of our friends and see if anybody is down.

And we can gather up like, you know, our initial idea was get like seven friends or eight friends and all of us invest whatever money we have and we buy a food truck. But as we kind of started asking all of our friends, nobody was like, everybody's like, no, why would I do that? I don't want to do that. Tommy was like, immediately is like, I'm down. I'm down with you guys. Like whatever you guys want, I'm with it.

Let's do this. And just to remind people, you met Dave, Dave Capuchian, back in middle school. And I think Tommy, Tommy Rubinian, I think that, that you guys met even before then. Like, you guys became friends in grade school, right? Yeah. I met Tommy in kindergarten, literally like the first day of kindergarten. So what's funny is the first day of kindergarten, we fought. And the second day of kindergarten, we were like best friends. And we've been friends literally ever since then. So in the end, it was pretty much me, Dave, Tommy, and Tommy's older brother, Gary that were kind of like on board to try this out.

A food truck. Okay. And this is like the height of food truck mania in America. I mean, so this is a great idea by food truck. Okay. So what happened? Okay. So when we realized before anything, we kind of needed like obviously a recipe and we

needed a foundation for the restaurant. So we kind of, again, talk to ourselves like, well, what are the problems that we thought we saw with talent raised? One of it was a really big menu, right? But the reason their sandwich was so good is because they cooked it right before they gave it to you. It wasn't pre-cooked sitting in a heated area. And we realized people either like to eat chicken by hand, you know, kind of like grab it with bread and eat it by hand, or they like to eat it in a sandwich. So we're like, what's one piece of chicken besides the breast?

Because we kind of didn't want to do the same thing, Holland raised was doing, you know? We didn't want to, as much as we were inspired by them, we didn't want to copy them. We wanted to do our own version of hot chicken, right? So we thought to ourselves, okay, what's the one menu item that they don't have? That's a piece of chicken that could be eaten both ways, and that was the chicken tender. It's part of the breast, but it's not the breast. It's separated with like this, sort of the tendon or whatever, right? Yeah.

You just cut it off and that's the tender. Yeah. Exactly, because the breast is a lot bigger, and the tendons, you kind of have like two little strips, right? Yeah. So we kind of eventually decided on the chicken tender. So it's really cool. When I think about it, that was so fun. But what our days would consist of is, you know, Dave would wake up, he'd go to work.

I wasn't working at the time, so I'd kind of hang out. And when he was done with work, like midday, we'd meet up. And we'd go eat at a local chicken place that we'd find that we'd maybe haven't tried before, whether it was like a popular one or non-popular one. And we saw what we liked about their chicken, what we didn't. And then we'd go back to his house and we'd just start cooking our own, you know, and like working on a recipe. And then after we'd cook, we'd sit and watch documentary about chicken.

You know, what could we learn from these dogs? We're watching people giving tours of their, you know, kitchens and how they cook their fried chicken and things like that. And then we take some of those ideas and go back and make another one. And we pretty much did this like every day for months. You know, I remember I had a stupid ideas all the time. I was like, what if we put like gummy bears in the – I don't know where it came from. But it was like – first of all, I was like you can't put gummy bears in oil because it's going to burn and separate. And it was like – so there was a lot of – and that was the dumbest one.

But there was a lot of ideas I had that I thought could work. Deep fried gummy bears. I know, man. It was so bad. It was so bad. Oh, I don't know about that. And I feel like what worked really well with Dave's is we both had ideas that were kind of crazy, but we had each other to kind of bring us back down to earth. Like I'd have like the fried gummy bears idea and he'd bring it down to earth. And then Dave had more like gourmet ideas.

He's like, oh, well, what if we made our own bread and pickled our own cucumbers? And I'd be like, yeah, but if we're going to be a franchise concept, you know, you can't ask your franchise. You're talking about a franchise concept? Oh, yeah. Oh, yeah, dude. That's a lofty goal. at the time? I know, man. And the way we were thinking about is like,

we wanted it to be a franchise and we wanted to be this thing. And we were trying to develop it from the ground up as a foundational restaurant to be very franchisable yet maintain very high quality. So we were like thinking all these things as we were in the house. I mean, think big,

right? I mean, you're 25. You don't even have you haven't sold a single chicken sandwich. You guys are talking about a national chain already. Zero dollars. I mean, it's kind of crazy and a little in over your head, but at the same time, like, if that's how you were thinking, that was probably getting you out of bed every morning, keeping you excited about this thing, because you're, right? Because you're like, okay, we've got to keep experimenting.

And did you just have, like, a big vat of oil, like, in a pot, and you would just, you know, fried chicken every day? Yeah. And what's funny is Dave's roommate John was a vegetarian. So we'd go to, like, Dave's house with, like, a bunch of chicken, and he would see us, and he was like, are you guys going to cook more chicken? And we're like, yeah, he's like, all right, just please clean up, dude. And we just, like, have, like, a bunch of chicken all over the place, like, raw chicken.

It was, it was really fun. Tell me about how you were, like, what you were searching for. I mean, as you were, like, just making the chicken, you were, like, at what point would you know it's right? You know, what's funny is before that, we would have a lot of people try the chicken. So obviously, Dave had a lot of roommates. There was tons of people to try it and kind of give us feedback. So we had like a really good like almost like a testing group that we'd work with. And then we make this joke that once our parents liked it because Armenian parents hate everything.

I did not know that. Is that true? They're very strict with food. Like you don't like outside. They have high standards. They do. So once they liked it, we're like, they like it, this is going to be great. You know what I mean? If an Armenian parent likes your food, you are a Michelin Star restaurant.

If an Armenian woman likes your food, you've got something going on. You're good to go. That's really valuable in, in the American. I'm going to remember that if I ever open a restaurant. I'm going to recruit Armenian mothers to try my food before I open. That's so funny when you think about it. Yeah, we did a lot of experiments. You know, like we're very spiritual people and we kind of always believe that the universe is helping us and guiding us. And, you know, a lot of weird things would happen like our logo, for instance. You know, I remember we went to swap me to buy like, you know, I think like a container for oil or something like that. Yeah. And we're just like in a store that sells kitchen equipment. And there's one rubber chicken for sale there. And I was like, Dave, I'm like, what are the chances that there's a rubber chicken for sale at a store that sells kitchen equipment and swap meat? And there's only one of them.

I'm like, I feel like this is kind of meant to be. Let's buy it. So we bought that chicken. And obviously, that's eventually what ended up becoming our logo was that rubber chicken. You're like mascot. Yeah. So there was a lot of things like that, like our brine. Like we spent weeks trying to figure out a brine, right?

And, you know, Dave had like milk brine and this. And nothing was right. And one day we were really tired and, you know, we're like, we're like, we're done with cooking today. And we had a few pieces of chicken left over. And I was like, yo, Dave, where should I put this? And there was like a Velastic pickle jar that was pretty much empty. And he dumped out the rest of the pickle juice and he's like, put it in here. And I'm like, oh, that's nasty, dude.

I'm like, there's pickle juice in there. He's like, oh, no, he's like, it's fine. It's like chicken and pickle juice is not a big deal. So we put it in there and we left it in there. And when we came back like a few hours later and we took it out, it looked like the, like the salts had almost worn away. at the chicken and opened up all the muscles and made it so tender. So we're, and then when we cooked it and we tried it, we're like, dude, this tastes so good. We're like, why don't we just use this?

And then obviously we added a little bit more recipes to the pickle juice, but the pickle juice eventually became our brine. And it was like accidental discovery. All right. So you guys are working on this recipe meantime trying to figure out how to get a food truck. What's the status of the food truck? So obviously, again, just like everything else, we realize we're pretty and over our heads when it comes to being able to afford a food truck. So as we were getting closer to having, you know, the recipe more or less finalized, you know, we started kind of like looking into what a food truck actually costs. It was way, way, way, way over budget.

Like, there's no way we could afford it. Yeah. So I remember I was having to talk with one of my friends, Ed, and he used to, because he used to own a chicken wing place. And I was just kind of trying to ask him for advice, like what he would suggest. And he's like, well, have you guys ever considered doing like a pop-up? So we're like, well, that's not a bad idea. We could probably start a pop-up a lot faster. We could save some money through it.

And maybe within a year of working this pop-up, we get a Ford Food Truck. Yeah. So that kind of became our goal now. It was like, okay, now we're doing a pop-up. That was our thing. You know, we planned a lot of different things around it. Like Farley. Farley is the reporter from Eater, L.A.

For Eater, L.A. Yeah. I mean, we used to go to all the restaurants he would suggest, right? So he had a very big pool on people in L.A. Like, when he would recommend a place, like people would go there. And you followed him, this reporter specifically. Yeah, we really wanted him to try Dave. Like that was one, even way before we were in the pop-up or anything, as we were still talking about like the foundational stuff, one of the things were like, okay, once we're ready, we need to have Farley come and try the food and write an article about it. Because we're like, that's what's really going to blast us off to the next level. we saw what he had done for other restaurants and we kind of understood that

like if our food was good and we had good operations and we can kind of get that little boost from him where people know us then we can kind of ride that wave. All right, so you had him in sights but you're not going to get to him yet. First, you have to figure out how you can do this pop-up thing.

Yep. So how are you going to do it? Okay, so Tommy's parents had a little flower shop in Hollywood in like this little plaza. And Tommy's like, well, I could potentially maybe talk to the landlord to see if he'll, you know, give us a little space there. And we asked him

about it. And so he's like, I can give you guys a little parking lot space across the street in this parking lot plaza where we eventually ended up. And it's funny because we didn't like it. We're like, dude, we're like, it's not visible. We're like, it's dirty. We're like, it's a parking lot. Like, this place isn't right at all. You know, we're like, this is not going to work here. And this was, by the way, where was this part? Where is this parking lot in? This is in Hollywood Boulevard, East Hollywood Boulevard. So it's East Hollywood. Yeah. And he's like, you guys can have a pop-up. And was he going to charge you? At first he said no

He's like, you guys could have it for free He's like, you guys have one spot for free Yeah And then Tommy was like, let's just do it And he's like, and funny enough It was like early morning He's like let's do it tomorrow And we're like what do you mean tomorrow?

He's like okay He's like we have the spot right We're like yeah He's like we have the recipe We're like yeah He's like so why don't we do it tomorrow And we're like we have no equipment We have no nothing

He said okay how much money do we kind of have And we all kind of like I had like a few hundred bucks That I had saved up Dave's like well I'm getting my paycheck In like a day or two And he was going to quit anyway So he's like, I'll have like a few hundred bucks.

And then Tommy's like, okay, I'll cover whatever's left, you know? So we had like a budget of like $900 that we set. We had 900 bucks. And did you apply for permits and stuff like that? No. No, okay. He and Dave wanted to. We're like, because once we got the official location of the pop-up, right?

Yeah. Me and Dave were like, oh, we should apply for like all of our like paperwork before we get started. And then Tommy was like, he's like, we're not going to get paperwork. He's like, nobody's going to give us paperwork to. open up on a street. He's like, we either do it or we don't. It was just like, let's do this and ask for forgiveness later. Yeah, exactly. When we come back in just a moment, how the pop-up begins to pull in hundreds and then thousands of dollars. And how a chunk of that change winds up in a dumpster. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built

This. I'm Guy Raz. So it's May of 2017. and Armand and his partners have set up a tent and a friar in a parking lot in East Hollywood to sell their spicy fried chicken tenders and fries. The first day, we had literally like a few tables that we got from our parents, a $150 friar, an easy-up. We had a heating lamp for the fries, and pretty much that was it besides, like, you know, all the, like, sheet trays and stuff were, like, spicing. And so, all right, so you have, you bring all this stuff to the parking lot and you open up.

What time of day did you open up? So, look, we did an initial test run the day before. It was on the first. And we posted that we're going to open up at seven, but we really opened up at like eight. Obviously, nobody showed up because, you know, it was on IG with like 50 followers. And my girlfriend was there, Lola, with three of her friends. And they were our only customers for the night. And they bought four meals.

and we made $40 that night. So $10 for a meal? Yeah, yeah. What would you get for $10? You'd get two tenders, fries and slaw. Nice. Okay. Yeah, it wasn't bad at all.

It was pretty affordable, I think. So you sold four meals and what was the verdict? Were they like, oh, they loved it? Yeah. But the second day when we went back, we're like, oh, hey, we have to get more serious. So we got back and we obviously didn't have that many customers. So the first thing we did is we, cooked like three chicken tenders. We cut them up into little pieces and me and Tommy kind of like walked around the block and you know there was like a few there was like jumbo's clown room which is a pretty popular like burlesque part down the street and they had a long line. So we went and we kind of started handing out a piece of chicken to people in the line whoever would take it. And what was really cool is a lot of the people came back like a couple hours later. You know that second day we might have made like $80 or something like that. But we were like wow like dude and they were all real people like nobody was like girlfriends or

friend. There were just real people that came in from either trying a sample or just passing by. You know, and then the third, again, the third day, even more people came by. People, you know, would bring a friend and be like, this is the place I tried yesterday and it was really good. Meantime, you had this strategy to get this guy, Farley, this eater critic, to come to the restaurant. How were you even going to do that? So here's the interesting thing. We wanted him to come, but we knew we didn't want him to come really early on. We knew as much as a Farley article would help us, if it came at the wrong time where we weren't ready for it and we got an influx of customers

and we couldn't serve them, then it was actually going to be detrimental to us and not help us. So we knew that we needed him to come when we were a little more familiar with our operations and when we felt like we could actually serve people in like a speedy pace. So how are you going to get his attention? So funny enough, Farley contacted us on Instagram.

Like I remember I saw the message and it was Farley and he was like, hey, I heard about what you guys are doing and I really want to come check out the food. And I was like, oh, man, I'm like, that's crazy. But it was pretty early on. This was like five days in. So to us, it was still early because we wanted at least like a few weeks or a month under our belt, you know? Yeah.

And he came on like day five or six. Did you know that he was there? Did you recognize him? Yeah, I talked to him. And, you know, me and him had like a conversation. I was like, yeah, you know, he's like, I'll come around. And sure enough, like, he showed up and he was, he did, I don't think he realized, like, what a small operation it was. Yeah.

Because he kind of looked at it and he's like, he's like, this is what you guys are doing. He's like, he's like, he's like, why? And he was really curious, like, why do it like this? And, you know, we kind of explained, like, we have no money and we just had a recipe and we felt like the recipe was good. And this is the only way that we could sell into people was just kind of setting up in the middle of the street and just, you know, bootstrapping it. And, I mean, you must have been pretty nervous. when he finally tried the food. So what happened? How did he react? So he had a tender and he didn't give an overwhelming reaction. So we couldn't gauge whether he loved it or not. He was like,

he was like interesting. He was kind of like more like that and just he wanted to kind of get to know us, right? And I remember mentioning to him, I'm like, hey, if you're going to write an article and I'm like, I don't know if you are. I'm like, but please, if you are, please make sure to mention that we're like a week in, we have a very small friar, and if anybody comes, they should expect very, very, very long wait times, which is funny enough when he wrote his article and he wrote late night Chickasand, will blow your mind. Down on the bottom, he had written, you know, get ready to wait because they're a very new operation.

So what happened the next day? It was like, it was kind of like we made it, dude. Like everybody that had doubted us was like, dude, you guys got an article. And it was so weird to us. We'd never been a part of anything like that, like somebody writing about something we did. You know, reading the article and the things he said was, it was so overwhelming to us because he was saying so many nice things. So the next, the day after that piece, that night, that night, what happens? So we obviously get to our pop-up late, knowing us.

We're supposed to be open at 7. That's what it says in the article. We get there like 7.15, and there's maybe like 90 people in line at the pop-up late. Wow. At your little tent, pop-up. And it's not set up. And it takes us like maybe 15 minutes to set up or 20 minutes to set up. Wow. And our dads were there too.

And they were like, they were like, what are all these people doing here? And you had like people from the other businesses were coming out. And, you know, because they'd seen us for four or five days there just cooking. And then the six day, there's like 100 people in line. Did you have enough food to feed everybody? No, no, we didn't. What's funny is like as we got there, we were really nervous and we kind of didn't know what to do. And then our dads kind of gave us a little courage like, don't worry, you guys got this.

And we're like, hey, we got this. And as we started setting up, I kind of like walked everybody in line. I said, hey, thank you guys so much for coming. We're a very new operation. So it's going to take us a long time to set up. And I'm like, our friar makes about four orders every 20 minutes. We might not be able to serve everybody. And that first day was hectic, dude.

It was hectic. But we adapted quick. So after that night, me Tommy and Dave, we kind of got together. We're like, hey, we need to adjust our system, dude, because this is not going to work. And we had just enough to buy another friar. So we went and we bought a bigger friar that made like 18 orders every like 10 minutes. So now we were ahead of the curve. So now even though we had this long line, we were actually producing orders really fast.

So here's a thing, right? One article can have a massive impact. But oftentimes that impact can be very short term. Like, you know, you could have, okay, 80 people come and then 100 people come and then, you know, for a couple weeks, it's like a line of 80. But then eventually it kind of tapers off, right? And there are very few restaurants anywhere that can sustain long lines. So how are you going to kind of sustain them? I mean, now you've got this thing and it's still two tenders, right?

Chicken tenders and it's not sandwiches yet. No, that was part of our strategy too. Okay. We did tenders at first because we knew that if a month later we added sliders, then we can get a whole new wave of media. You know what I mean? So you start off with tenders. You get all the media coverage you can.

Then you add sandwiches to your menu and kind of get another lapse of, you know. And then people like, now they've got sandwiches. Now they've got sandwiches. Yeah, exactly. And could people get their spice level or was, did that, would that come later? Yeah. That time we had, I think, mild, hot and extra hot. Okay.

So, and probably a lot of people coming, certainly in this early days, are going for extra hot. Because these are Nashville hot chicken freaks. Yep, yep, yep. Obviously, because we only had a limited amount of time, right? The chicken took like 16 minutes to cook, so you'd have to set up 18 plates. You'd have to put bread in all of them. If it was sliders, you'd have to start toasting the buns. And then you'd have to, so it took a while to set everything up.

And then once the chicken came out, you needed to spice it and get it on the bread one second earlier. So it could be piping hot. And then the fries would go on it and it would go out. So it was very clockwork. If you missed the second, you could ruin the next batch. So in a matter of months, you guys are probably pulling in a thousand bucks a day. A little more than that. A lot more?

We're doing like a few thousand a day. So I mean, okay, what about the guy who let you this a parking lot for free? That's the thing. He's like, dude, he came in like a month in and he saw it. He's like, what is this? Dude, he's like, the guy's got a whole restaurant over here because there was like a hundred people. He's like, I thought this was a hot dog. He's like, I'm going to have to start charging it.

And every month he charged just a little bit. more until we eventually got out of there. But he was a great guy and we kind of understood that allowing three kids to do a pop-up in your parking lot is taking all the liability if anything happens that's on you to your property. So we kind of appreciated that he was taking that risk for us. And we kind of understood that paying him rent was just part of business. So we were happy. We were just happy to be there.

Yeah, it was really nice of him. Yeah. And tell me about just like your day-to-day life. Is that whole summer of 2017 just a grind, like every day, like tens, hundreds of people in line? Yeah. It was really cool, actually. So me and Dave would have to wake up early to go shopping for the food. So we'd wake up at like maybe 7 or 8 o'clock.

And we'd kind of, you know, go to Restaurant Depot. We'd buy our chicken there. We'd buy fries. Obviously, the spice mixes, you know, all the different peppers to make the spice mix with. you know, just all the, like, food stuff. And then we kind of, you know, come back. So we would do our prep at Tommy's house. Yes.

Because Tommy had, like, the biggest backyard out of all of us. And Tommy's grandparents would actually help us. So, like, his grandpa would pour out all of the sauces into, like, the containers for us, into, like, the little boxes. And his grandma would help us make the lemonade every morning. And then from literally, like, 10 or 11 until, like, 5 o'clock, we were just prepping the food. But yeah, it was a lot of food. prep because obviously each individual tender, you know, you got to wash it, you have to

brine it, you have to spice it, you have to put it into flour. So it was like a long process. So we'd barely finish in time. What time did the pop-up close? Like, what time do you stop serving sandwiches? Like, I mean, we would sell out fast, but by the time we got through all the orders, it'd be close to midnight. So midnight, then you've got another hour or so of cleanup. Like two hours of cleanup. All right, home at 2 a.m. and then up again at 7, 8 a.m. Six days a week. Took Sunday off? We took Sunday off and all we could do is sleep.

And for six months, that's what it was. So, all right. I mean, if you guys were doing a couple thousand bucks a night on good nights, I mean, it was just a matter of time before you're doing, you're bringing in like 50 grand a month. Yeah. Maybe more. Yeah. I mean, I remember, like, obviously the first month, we started in the middle of it. We were still getting, you know, all of our operations and stuff down.

And, you know, our parents as proud as they were of us, we're like, well, are you guys? making any money, like it has been doing it for a month and there's all these people, but where's the money? And obviously at the time, we were just kind of reinvesting most of it back into the pop-up, you know. But the second month was the first month that we actually paid ourselves. And at the end of the month, we had each made like, I think it was like 10 or 11 in cash. Thousand. Yeah. Wow. And it was the most money I'd ever seen in my life at the time. Wow, you guys made 40 grand in profit. You could distribute that to each of you. That's in a month.

That's amazing. And it was the second month. Dude, I was sitting outside of my house that night looking at the money and I was like, dude, what did we do? I'm like from a parking, from a pop up in a parking lot selling chicken, I'm like, we made this much cash. And I remember I went home and we had all these like overdue bills and I put all the money in every single bill and I put a couple thousand on each of my parents' nightstands. And the next day they woke up and they're like, where did you get all this money in? I was like pretty much like don't worry about the bills from now on. Like we got everything covered from now on. So it was like that was probably like one of the best nights.

of my life. It was just like everything like coming together, you know. Yeah. I heard that at some point you guys actually threw away your cash. Like you had a bag of cash and you threw it in a dumpster. We did it. Dude, so when we finish every night? Because it wasn't the best neighborhood, right? And we were always kind of afraid that like somebody might try to rob us or something like that. All cash business, yeah. All cash business. So at night or throughout the night, what we do is we put our cash away in like a styrofoam container, like one of our to-go containers. At the end of night we take that home with us so it was like inconspicuous so one of the nights you know laid into the pop-up again very tired it's been a whole week and you know we're cleaning up and then we get to to tommy's house

and we're like okay we're like who has the cash so we can count it and then Tommy's like I think Dave has it and I'm like hey Dave do you have it he's like no I thought you had it and I'm like dude what do you mean I'm like where where's I'm like we kind of started panicking because it's a lot of money especially for us at the time because we're like you know saving up so we started looking around everywhere it's not on the car we're like okay we go back to the pop up and we kind of realized pretty early on that we probably threw it away with the other styrofoam containers. But what sucks is we'd throw away like 150 styrofoam containers a night.

We would throw away maybe 10 bags of trash a day. So we had to go across the street to our main dumpster, this big dumpster. And I had to, and I told Tommy, I'm like, keep lookout. I jump in the dumpster. And the funniest thing is the money happened to be in the bag that we threw away our oil mix in. So we make an oil mix and we put spices in there when it's boiling and we mix it up and it becomes like this red oil mix and we throw that away at the end of the night. And that's where the money was.

So the money was covered in like red oil. And I remember I got the money and I was really happy. So I got out of the dumpster and I was like, Tommy, I got the money. And there was a guy there that was using the bathroom because there was a bar right there. And he looked at me and there's a guy like and I think about it now. I was wearing like an apron and I had this like red dripping money and I was in a dumpster. and he saw me and he freaked out and he ran away. And I'm sure till today, that guy thinks he, like, witnessed the murder or something like that.

So we found the money and we were spending red money. It looked like we had robbed the bank because we had, like, money with, like, red dye on it. So, you know, we'd have to, like, slip it in as we were shopping. You know, we'd give, like, five greens and then one red in there. So, all right, you launched this thing in the parking lot on May 2, 2017. By January 1st, 2018, your break and mortar opens. Before we talk about that, how did you guys, I mean, now you're bringing in serious money. So you presumably, you had the money to take out a lease on a location.

Yeah, kind of. So the first couple months, obviously, because we weren't that used to money, we just kept paying ourselves. Yeah. And I think by the fourth month, we realized, like, hey, if we're ever going to get to a store fast, we have to stop paying ourselves. and, you know, kind of put the money towards the store. And then that's kind of also where Gary came in, Tommy's older brother, because he was the oldest one. He had a little bit of experience with business.

And did he have any money? Did he have a little bit of money to invest? He had money. Like, he was the one that actually invested 60% of the first store's funds, and then we put up the rest of it. Got it. And obviously he was seeing how big Dave's was getting. And, I mean, at the time, the pop-up was falling apart

because we were seeing so many people. Our friar was almost, like, it was bad. Like it was we weren't able to handle the amount of people coming in. Every night we were turning away a couple hundred people because we were sold out. So we were like we really need to get to a store. So Gary was very on board. So we kind of started like store hunting. And what's funny is like Gary was like, well first we need to like, he's like we need to get at least a little bit legal.

Right. So like you guys need to at least establish Dave's as like a business. You know what I mean? So he sent us to a friend of ours Rafi Bubayan who was a lawyer. So he kind of started helping us out on the legal end a lot. Even till today, he's actually partners with us on our stores. Wow. And he helped, dude, he helped us so much.

Like, him and Gary were kind of the ones that came in and helped us a lot, like getting us to like a mature state. How did you guys divide the business up? Did you just split it evenly between the four of you? Evenly, yeah, evenly. And even in the parking lot, it was evenly between the three of us. And then... You brought Gary in and then... Yeah.

Yeah. We felt it's the most fair way to go. If everybody has an equal portion, then everybody puts an equal effort. I mean, it's kind of remarkable because as businesses get more successful, that can tear even friends apart. But that clearly didn't happen. No. You know, what's funny is we had this understanding of like you would rather own, let's say, 10% of a cow than 100% of a grape. So, you know, you would rather own 25% of a store than 30% of.

percent of a pop-up. So to us, it wasn't how much, what was the percentage we owned? It was, what did we own the percentage of, you know? How big was that pie? How big was that pie that we own the percentage of? So a store was obviously much more valuable than a pop-up. One of the things that I think is really important is where you were, right? Because, you know, seven, eight months in, you have a brick and mortar. And the first brick and mortar is, was in East Hollywood as well, right? Yeah. And I think had you done this in like Birmingham, Alabama or, you know, Boise, Idaho,

it wouldn't have, even if with the quality of what you're doing, it wouldn't have scale so quickly because L.A. is a media capital of certainly the United States and one of the media capital's in the world. And being in L.A., there's a critical mass, right? Like, how important do you think L.A. was to just the, just the, rapid success of this brand. Very important. Very important. And I think Los Angeles not only played a big role in Dave's Hot Chicken, but Hot Chicken in

general. Because if you think about it, the second place that Hot Chicken really came after Nashville was Los Angeles. And Los Angeles is kind of what helped it really blow up into this nationwide thing. Everybody in the U.S. wants Hot Chicken now. So, all right, so you guys have this first store in Hollywood in 2018. Tell me about the design, because there's a look. I mean, it's like sort of the stylized graffiti on the wall, and you've got the rubber chicken, and tell me about how you were thinking about the design. It all goes back to when we were working on the recipe.

So Splatterhouse, the guys that do our art, Demkin art, they're really close friends of mine from before Dave's, when I used to stand-up comedy. And they do amazing artwork. So I remember as we were working on the recipe, and I talked to him like, hey, I'm like, we're doing this chicken thing and blah, blah, blah. I'm like, one day if we have a store,

like, would you guys be down to do art on the inside? And like, yeah, of course we would. You know, like, why wouldn't we? So as the store obviously came, they're the first people we called. So we kind of like, you know, came up with the first design just together. And it was, I mean, I should mention,

every single location is different. Yeah, and it's hand done. same artists. And every single store has their own mascot Dave. So every store will have a Dave after like a pop culture figure. You have like Muhammad Ali Dave, like Bruce Lee Dave or Darth Vader Dave. So you have all of these. Every store has like their graffiti wall, their white walls, their neon lights, and then their particular Dave. All right. In that first store, how did you figure out how to, you know, how to run an operation. The store is different, an efficient operation to get enough orders out at a time and to meet the demand.

And was it, you know, how did you guys start to figure that out? We, it's actually really funny. As we were getting like kind of closer to opening, we watched the movie The Founder, the one about McDonald's. Oh yeah, great movie. So good with Michael Keaton. Yeah, and we saw that scene that how they were kind of like developing their kitchen system like with chalkboards and stuff.

And we kind of took that inspiration and we went into our kitchen and we kind of tried to like understand like how we. we could set things up to have the fastest possible operations within the restaurant. And we eventually came up with this island system where there was like a table in the middle that everything would be put on, chicken, fries and stuff. And then from there, you'd kind of spice them up and then categorize them into mild, medium hots, and then the person on the line would just turn around. So we kind of like using the inspiration from the founder, developed our little island system

in our kitchen that we felt was like the most efficient for getting food out. That is so cool. That movie inspired you guys. Yeah, it was really fun, dude. It was really fun. Because you guys had ambitions even before you had the tent to have a franchise business. So by the time you opened a break and mortar, you knew that it was just a matter of time before you could figure out a second location. Yeah, we know we were close.

And what's funny is even during the pop-up and up until now, we had so many people that would come and be like, oh, let me invest and make you as a franchise. Let me do it like, oh, I got. So we had a lot of offers going into it. Wow. But I think we kind of realized, one, it's too early. To we realize that like the right partner is probably the most essential piece of the puzzle. So we were very careful with who we even consider as partners. But most of the people kind of didn't pass that energy check right away.

So we were just we didn't want to work with them. But you were open to this idea of having a franchise partner because you felt like the four of you guys were not even at the capital and even have the experience to do it on your own. Yeah. Well, at the time, we were a little, yeah, we were a little naive. So we felt like if we really tried, we maybe might be able to do it on our own. But looking back to it, there's no way. The amount of like overhead you need, the training, the scaling, it's almost impossible to do, I think, if you haven't done it before or have people with you that have done it before. It can be really easy to mess it up.

When we come back in just a moment, the business gets a boost from two new partners and some big-name celebrities. Stay with us. I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2018, and Armand, Dave, Tommy, and Gary have opened one chicken restaurant and are about to open another. And they're starting to think about finding franchise partners. And then, almost on cue, someone leaves them a mysterious message. So I remember that we were in our office.

And one of our friends that worked for us, us and is one of our partners in Alva'i, he came into our office like, hey, somebody left a post-it note for you guys. And we're like, post-it note. And the post-it note said, founders of Dave's, please call John Davis. And we're like, who's John Davis? We're like, this is really weird. And Tommy's like, yo, guys, I have a really good feeling about this one. He's like, we should probably call. And we're literally going to throw it away if Tommy hadn't said that he has a feeling about it, you know? So we call and they go, Davis Entertainment, how may we help you? And me and the guys looked at her. She was like, he doesn't even pick up his own

phone, this guy must be big, you know what I mean? So, and then he picked up the phone and he was a really super cool guy and he's like, hey guys, like, you know, I heard, you know, you guys have a really popular restaurant. I really want to come out there and I want to like meet you guys and talk to you guys. We kind of did research on him and we found out like, you know, all the things he had done and we saw that he had a lot of experience in growing restaurants. So fast forward he comes in. Again, really nice guy. He meets all the founders. We give him a little bit of a tour of the restaurant and, you know, the kitchen, and we bring him out some food and he eats it. And I'll never forget, dude, like, he was like, he was eating this food and he was saying

things. So it's like, this is, this is, this is, this is going to be huge guys. I'm going to get the rock. I'm going to get Kevin. He was like throwing out all these celebrity names and stuff like that. And again, I remember thinking either this guy is exactly who we need in life or he's just really crazy and this is just too good to be true. Yeah. Right. And then after he finished, like, look, guys, like, I want you guys to meet Bill. He's like he's, you know, he's like he's a guy I've worked with. He's very experienced in restaurants. He's like, why don't you guys meet with them tomorrow? He's like, I'd be really interested to see what he has to say about it, right? And this guy, Bill Phelps, this is the guy who co-founded Wetzels, pretzels, and Blaze Pizza. So clearly super experienced, deep experience in franchise businesses. Yeah. So the next day, we meet Bill. And again, we loved his vibe. We loved their energy. What we loved about them versus other investors that we had met is we felt like they actually.

really they gave credit to the founders you know whereas a lot of people came in with this energy of like you guys got really lucky and you know you guys don't know what you're going to do with this they kind of understood that it doesn't seem like they got lucky it seems like they knew a little bit of what they were doing right so we really appreciated that energy from them and I remember that time um on social media if we ever posted that we didn't have a line we'd get like hundreds of people coming in because we always had a line so I fake posts that we didn't have a line just because I wanted to be extra packed up. So when they came in, there was like 150 people in line and they were like, what the hell is going on? So we knew pretty early on that, you know, they had the right

energy to work with. So in September of 2019, this investment group led by these guys, they took ownership over, I think, 49% or 50% of Dave's hot chicken. It's 42.5, I think, around there, like 40s, yeah. And I mean, I mean, I mean, you had two locations by this point. So they basically, they came up with a valuation and they bought 42% of it. And is it? Yeah, kind of. Yeah.

Sorry. No, so what we kind of did was we, instead of like buying the company, because, again, we kind of had, like, Raffi to help us out. Like, he was a friend of ours that was a lawyer that we trusted. Yeah. So he kind of, like, advised us that it might be smarter to just, like, kind of, you know, just create a new franchise company, right? like Dave's franchise co, instead of just selling the company. Because we knew that, like, as the founders, we weren't ready to give up the company. Yeah.

You know, the only way we wanted anyone to be a part of it is if they were going to continue to let us do things the way we wanted to do them. And we're just going to help us grow it versus take it off our hands. But basically, this was also an opportunity for the four of you guys to earn some upfront cash, but also to retain ownership. Yeah. But we earned no upfront cash. No, for a cash. No, no. We just, the money we raised kind of just went to, you know, hiring, you know, operations, people and, you know, are head of sales.

So you didn't have like a, you didn't have like a payout at all? No. No. But you now had, and you retained, so you've got this franchise business that they own a big chunk of. You guys retained a majority ownership over. Yeah. And now, from what I understand, you guys, you Dave, Tommy and Gary become franchisee. basically.

Yeah, so along with being franchisors, we continue, because the stores were very profitable and because it was our source of income, one of the causes of the deal was as the founders, we want to continue to open more stores, right? So we didn't want to take any territories that were too far away from us. So we just took the Los Angeles area and then we eventually took the Las Vegas territory because we felt like it was close enough for us to operate. So we kind of bought the territory of like Los Angeles. And with the founders, we own like, I think, 11 stores now.

So clearly, this was the direction you guys were heading in. And it was a risk, right? Because you could have given, I mean, it could have, you had this brand, you had this product that you believed in. And franchising is risky because you're putting your brand into the hands of people who are going to run the stores. Right. Yeah. But at the same time, if it works, it could be hugely profitable. Yeah.

I mean, was there any doubt in your mind that this was the direction you should go in? There wasn't a doubt in our mind because that's kind of like we had built the business to be. Yeah. Obviously, like, talking to Bill and John, even just from the first couple of conversations, we learned a lot. Like, a mistake they had made with Wetzels is they franchise to anybody that wanted to buy a store, right? Anyone. Mom and pops, anyone. Mom and pops, anybody, which was a big mistake.

And it's something that they did differently with Blazes. They only sold to experience franchise groups that bought big territories. That's actually a much better idea is you only franchise to groups with multiple other stores that are running really good operations where this is exactly what they do. Where when you give them the store and the training manuals and everything, they're going to know exactly what to do with it. Yeah. I'm curious about some of the people who got involved in investing were celebrities. Maria Shriver and Samuel L. Jackson and Michael Strahan, and I get pitched this all the time. People are like, our company has all these celebrity investors.

And to be honest, my reaction is okay. I mean, a celebrity is a celebrity. Like it doesn't make them a good investor because they're famous. It just makes them, it just means they have money to invest. And then eventually Drake became a significant investor. You're obviously in L.A., the center, world center of celebrities. But, I mean, how critical is having celebrities as investors on board to the success of Dave's? It's pretty, I think Drake was the more critical one.

You know, I think what it really helps with is franchise sales, right? Because as you're going after these really big franchise groups that own hundreds of stores, you know, they don't want to take a risk on a one store or two-store concept, you know, as podcast. as they might be in Los Angeles. So, you know, having investors, like, let's say saying, oh, Samuel L. Jackson is an investor and Drake is an investor, it gives them a little bit of assurance of like, okay, so maybe if they've invested, like, maybe there's something here. So we would really use that to try to sell stores initially

until the stores would open up and then they would kind of, you know, the numbers would speak for themselves. So you wouldn't necessarily have to use Drake's name as much or Samuel L. Jackson's name as much. So then they eventually, over time, just became investors. But at first they were pretty key to us selling stores to big groups while only having one or two stores open. So, all right. Now I think how many locations are there now of Dave's?

I mean, we had like, there was a point where the growth went crazy. So, you know, there was a time where it was like 10, 15 stores. And Adam Norah was like 50, 60, 70. And now we're like 200. 200 stores. And it's mostly in the U.S. But you've got some locations in Canada, which. I've been to, and then Dubai?

Dubai, Qatar, and I think we're pretty close to a UK deal. And I read that, it was amazing, I did not know this, that fried chicken, like basically the biggest market for fried chicken is not the United States. It's Asia. People are crazy for fried chicken and like Korea and Japan and China and all over Asia. Are you guys, is that like the next frontier? It's funny because that's that we're talking about that a lot lately, you know, we're talking about is there potentially a partner out there that, you know, we can talk to that is, you know, obviously that's the quality we want that's willing to franchise Dave's out there. So we're definitely in talks now. I think we we kind of underestimated our international abilities. It's not something that we really want to do. Yeah. But kind of looking at how Dubai, Qatar, and Canada are performing, it seems like, you know, international could be. a great market. And now you've got, as you mentioned, about 200 locations. And I think you've sold. How many franchises have you guys sold? I think 900. 900. Yeah. Wow. So this is going to expand. And if it expands according to the plan, when, like how long before there are 900, Dave's, Dave's Pott Chicken?

I mean like four or five years, four years. Wow. Yeah. We open pretty fast. I read that at the end of 2023. Bill Phelps, your CEO said in an interview that on average, each Dave's location does about $2.8 million in revenue a year. To put that into perspective, like a subway sandwich chain probably does in the hundreds of thousands in revenue. Yeah, like $600,000. A Taco Bell, probably between 1.8 and 2. Yeah, which is great.

You know, McDonald's probably does 2.2. Chick-fil-A is a different category. That's probably closer to. But nine, but almost $3 million per restaurant. That's a lot of money. That's a great business. Yeah, it's very high AUVs for a franchise, franchise concepts. Yeah.

Armand, I wonder, I mean, now that you are a bigger company, you're 900 locations in the next couple of years, and you guys have you, how many franchises do you guys own the four partners? I think 11 stores. Wow. So that's a full-time job right there. And you're also sort of the brand manager. But, I mean, what do you think?

I mean, you're so young. You're like in your early 30s, right? Are you 30? 31. I just turned 31, yeah. Amazing. I mean, you were broke and trying to like break in a comedy when you were like, not that long ago. Like, and here you are like sitting on top of this incredibly successful empire of restaurants.

What do you think about your future? I mean, you know, as Dave's gets bigger and bigger, it is going to get more corporate. That corporate is not a, it's not a bad, evil word. I mean, no, it's not. Corporations can do great work, but it means there's more bureaucracy, there's more hands in the, you know, there's more cooks in the kitchen, so to speak. So do you imagine you kind of staying in that corporate role long term? Yeah, so at least for like the foreseeable future,

Dave, this is a pretty like corporate company, but at the same time, we're very also mom and pop, right? You have Bill and John who are these really experienced people that have done it a million times before. And then you have these four young guys that are like high school dropouts that are more consumers. So you combine those two things and there's this really good balance of understanding that goes on between the partners, right? And it helps the company be really healthy. It was like 30-year-old high school dropouts and then these guys that have done crazy huge franchise concepts. When you think about this journey you took and where you guys got to and where you are now, I mean, you're so young, you're going to make a lot of money over the course of your life. Even if you drop out and just are passive and, you know, owner, how much of where you got to to this point do you think has to do with the grind and the work you put in?

And how much do you attribute to just the luck of timing with hot chicken and I don't know and just the luck? I think it's we got lucky that you know hot chicken started to trend in Los Angeles but at the same time if Dave hadn't dedicated half of his life

to studying culinary it wouldn't have really helped us right and then even when it came to you know the marketing you know yeah we were lucky that I had a little bit of you know

marketing knowledge from doing the comedy and stuff but at the same time like you needed the skill right so everything is a little bit of the skill and luck and you kind of need a little bit of luck to show your skill. But I think it doesn't matter how lucky you get

and it doesn't matter how many people write about you. If your product is not good at the end of the day, none of it matters. And if your product is good, then somehow you're always going to end up getting lucky somehow, right? That's Armand Oganessian, co-founder of Dave's Hot Chicken. By the way, their spiciest chicken recipe is called The Reaper, and it's so hot that people who order it actually have to sign a waiver. It says eating the Reaper can cause you harm, including bodily injury,

property damage, emotional distress, or even death. One Reaper Eater who did not die said, quote, I felt like a small grizzly bear was inside me trying to claw its way out. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And of course, it's free. And don't forget to sign up for my free newsletter at guyraz.com. This episode was produced by Sam Paulson with music composed by Rumtina Arablewe. It was edited by Neva Grant with research help from Catherine Seifer, and audio engineering by Robert Rodriguez and Patrick Murray. Our production staff also includes Casey Herman, J.C. Howard, Alex Chung, John Isabella,

and Elaine Coates, Carrie Thompson, Chris Messini. and Carla Estevez. I'm Guy Raz, and you've been listening to How I Built This.