Sample data — illustrative, not for citation
SBA-eligible · directory code S5336 since 2020
Dave's Hot Chicken
chicken · Dave's Hot Chicken LLC · est. 2017
Dave's Hot Chicken is a fast-casual restaurant chain specializing in Nashville-style hot chicken tenders and sliders at selectable spice levels. A franchisee develops and operates restaurants with counter service and delivery, typically under a multi-unit development agreement.
Dave's Hot Chicken net unit count grew +40.7% from 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Not enough disclosure
Distress
No verified FDD extraction to judge from. Any figures shown are labelled sample data or independent federal records.
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 168 | 199 | 236 |
| Opened | 32 | 38 | 46 |
| Transfers | 5 | 7 | 7 |
| Terminations | 0 | 0 | 1 |
| Non-renewals | 1 | 1 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 0 | 0 | 1 |
| Outlets at end | 199 | 236 | 280 |
| Net change | +31 | +37 | +44 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 7 SBA-backed loans to Dave's Hot Chicken franchisees since 2023. Most are still open, so there is not yet a resolved cohort large enough to rate.
—
1 resolved · too thin to rate
—
avg. charged-off $ ÷ approved $
—
default rate × loss severity
$1,031,285
what recent franchisees borrowed
—
approval → charge-off, defaulted loans
—
distinct banks lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO DAVE'S HOT CHICKEN BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
To open (Item 7)
$464K–$1.1M
all-in investment range
Franchise fee (Item 5)
$40K
upfront, one-time
Royalty (Item 6)
5%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$50K
5% of sales, before profit
Over a 10-yr term
$500K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for Dave's Hot Chicken with an independent CPADistress signals
news-sourced · bankruptcies, closures, lawsuits
Every Opening and Closing This Week: Noodles Express Is Back, and Dave's Hot Chicken Is Hot!
news:Westword · 13mo ago
Paul Weiss-Led Roark Closes $1B Dave's Hot Chicken Buy
news:Law360 · 14mo ago
Digestible: North Loop openings, Dave's Hot Chicken, brewery closes
news:The Business Journals · 30mo ago
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing Dave's Hot Chicken's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →