Get ready because this week's episode dives into the booming industry of fast casual fried-chicken as we chat with Dave's Hot Chicken's powerhouse duo: Co-Founder/CBO Arman Oganesyan and CEO Bill Phelps. Arman's marketing ingenuity and Bill's strategic eye have catapulted Dave's Hot Chicken from a local curiosity to a national sensation.
On this episode, you'll learn from Arman and Bill about:
Thanks, Bill and Arman!
Get ready because this week's episode dives into the booming industry of fast casual fried-chicken as we chat with Dave's Hot Chicken's powerhouse duo: Co-Founder/CBO Arman Oganesyan and CEO Bill Phelps. Arman's marketing ingenuity and Bill's strategic eye have catapulted Dave's Hot Chicken from a local curiosity to a national sensation.
On this episode, you'll learn from Arman and Bill about:
Thanks, Bill and Arman!
Welcome to another edition of Give an Ovation, the restaurant guest experience podcast, where I talk to industry experts to get their strategies and tactics you can use to create a five-star guest experience. This podcast is sponsored, as always, by Ovation, a two-question SMS-based real-time guest feedback platform that helps restaurants measure and improve their guest experience. Learn more at ovationupcom. And today I hope you've got your AC on, because we are talking about Dave's hot chicken and this thing is on fire. Not only is the flavor good, not only is the spice up, but this thing is blowing up, it is on fire. So today we have Arman, the co-founder and chief brand officer, and Bill Phelps, the CEO.
Speaker 1:Bill Phelps is you may recognize him from other adventures, such as Wetzel's pretzels, blaze Pizza, arman. On the other hand, you probably don't recognize him anything before Dave's chicken and we're excited to jump into that. But, bill and Arman, so glad to have you on the podcast. Great to be here. This is cool. Yeah, yeah, this has been a long time coming. I've had. Bill gave me a card. This was what this is probably like. A year and a half ago, bill Phelps gave me a card and it said part of it was a business card. The other part was good for one free meal at Dave's hot chicken. Yeah, to this day I have that in my car sitting there because I'm like, oh, I need to use that when I go to Dave's hot chicken and I have been to Dave's probably 30 times and I always leave my car.
Speaker 3:No, you're going to save the least $10. I know.
Speaker 1:So just just know, just know that Arman, that watch right there was probably paid for, because I didn't, I didn't use that coupon.
Speaker 3:That's hilarious. Thank you, Dude. Thank you, for I love this watch. Thank you very much. That's cool.
Speaker 1:So here's the crazy story. Let me let me tell it for our listeners. Let me tell you a story about three high school dropouts who had no job, no money. They wanted to start a restaurant with no permit in a parking lot, with less than the thousand dollars, just tagging LA food bloggers and their first three days they made around 150 bucks. Is this sounding familiar, Arman? Is that? Am I like in the ball?
Speaker 3:Pretty spot on.
Speaker 1:Okay, that's pretty spot on man. Fast forward a few years and you guys are fricking. The fastest growing restaurant chain in America voted the fast casual number one brand, and so tell me about this. But the rumor has it, arman, that from day one that parking lot you had dreams of franchising and blowing up Dave's hot chicken. Is that right?
Speaker 3:Yeah, I think even before we got to the parking lot, like I remember me and Dave would work on the recipe at his house and we'd kind of talk about keeping the recipe really simple and keeping the ingredients really simple. So one day when we franchised franchises would be able to create a high-quality product, just like we were, and we wouldn't lose the quality as we'd expect. So we pre-planned for it before we even knew we were going to pop up in a parking lot. We were just dreaming really big early on.
Speaker 1:So what do you say to those people who are in a food truck right now and they're like man Dave's is just crushing it and I am just slodging it away in this food truck and things aren't working out? How did you keep faith, man, especially on day three?
Speaker 3:I mean, like that morning of day three when you're doing 150 bucks and you're like what is going on and maybe back then it seemed like a lot of money to you, that's what I was going to say, Because you said faith, but to us it was like the first day we made $40 and we couldn't be happier because we couldn't believe that somebody actually paid us for food. So to us, the 150 was like amazing, you know. And I think because we had such low expectations everything was so amazing and we were really appreciating the journey and because we had no money for marketing, we put a lot of the focus back on the food because we wanted to use the food as like a springboard to get more customers. So I think that was a big thing. For us, too is we didn't have high expectations. We were happy with small steps and small successes and we were really all about making the food good, which helped us grow really fast.
Speaker 1:Yeah, so you had this like dream big, live small mentality. That I think was really cool Now, but day three, something happened. Day three, there was a magic moment that most people wait a lifetime, because I always tell people the key to a startup being successful is you have to stay alive and excited long enough to get lucky. But something happened day three. Tell me about that.
Speaker 3:So, like you said, we would tag a lot of LA based bloggers. Because as we were kind of going on our chicken journey before we worked on our restaurant, we read a lot of LA blogs of where to go for good chicken and one of our favorite bloggers was Farley Elliott from Eater LA and we kind of saw the impact that he had on restaurants and what foot traffic you could bring to them by just writing an article about food. So we really targeted him early on. We would tag him a lot, we'd like a lot of his pictures and we were just trying to get him to come down from your personal account or from Dave's account?
Speaker 1:No, from Dave's account. From the Dave's Hatchigan account.
Speaker 3:So we started Dave's Hatchigan Instagram very early. That was our only form of marketing and still our main form of marketing till today is our social media, and we would tag him and we would go on his page and things like that. And he finally noticed us and he sent us a DM and he said hey, you know, I also hear and he knew a bar that was next door to us, so they also told him about it that there's like some kids doing a pop up down here.
Speaker 2:So he was like you know.
Speaker 3:I heard, about you guys? I want to come check it out. So he comes in and he was super surprised because he didn't know it was a pop up and he was like is?
Speaker 3:he talking for a restaurant he was looking for a restaurant and back then it was like a little fryer that we bought from Home Depot that would do like three orders an hour, like we're three orders every 20 minutes. So he was like really blown away and he's like, well, he's like why are you guys doing it like this? And we explained that you know, this is all we had. We didn't have any money. Our parents couldn't help us with anything financially, because we're doing this to help our parents, right, and we're like we just knew we had like a good recipe. So we were just doing this by any means we can and we're going to build as we go. But I think he had a lot of respect for that also. And the next morning we woke up and he had written the most amazing article and we did to the pop of that day and there was literally 90 people waiting for us, yeah.
Speaker 3:I said the East Hollywood's late night chicken salad will blow your mind and it was like this cool ass article we did to the pop of that day late because he said we opened at seven and we got there at seven. There's like 80, 90 people in line. We still have the fries. That's going three orders every 20 minutes. We're like dude, it's going to be a long night. And after that we just never looked back and we just kept reinvesting back into the business, being happy with small wins and just kind of, just, kind of just like parling our win on top of the next one and just taking it bigger and bigger.
Speaker 1:But do you have that fryer still?
Speaker 3:No, I think somebody stole that fryer. And then somebody stole because we left them back. Then we finished the pop-up and I think people go and they went and they took that fire at our original fryer that we used after that, oh man, because we were like put it somewhere. But yeah, they took it.
Speaker 1:So somebody out there has it. Well, you know, and I heard some. I don't know if this is Dave's hot chicken folklore or not, but I heard there was a story that you had some premonition about a piece of chicken that you were gonna give to Farley that first time.
Speaker 3:Oh yeah, I did. There is a story about that. So because our fryer was just it didn't have a temp controller or anything, we would kind of have to free ball when the chicken was cooked. And I remember we took out the chicken and we spiced it and we're all looking at it and we're like this chicken doesn't feel right.
Speaker 2:We're like this is not right and we opened it and it hadn't been cooked all the way.
Speaker 3:We were like dude, we were about to give this out. So we put it back in the fry, we refried it, so we're like damn, our gut was like just telling us that don't serve this, so it was like this. I guess is that the folklore you heard about.
Speaker 1:Yes, so it's true. Yeah, it is true. So you were one chicken away from being, like you know, done. Just shut down. Probably a cook at.
Speaker 3:KFC right now the whole chicken from your leg would have been dead. They'd like chicken to have the full your gut. Oh, my gosh Farley ended up in the hospital. No, but it was. I mean, dude, we like to think I tell people all the time that we're really big believers in, like you know, the universe. I was telling we'd make a lot of our decisions flip in a coin because we'd leave it up to the universe and we like to think that it gives us signs and all of us at that moment we're just feeling the same thing, like this one doesn't feel right Cause we were ready to like hand it and we're like, dude, let's just double check it. And we opened it and we're like, good double check.
Speaker 3:Oh my gosh, we didn't have any more chickens, but we couldn't have recooked them in another batch, like that was one of the last orders of the night, so it's really interesting how everything worked out Right.
Speaker 1:And I love Eckhart Tolle. He's someone that I've read about like the power of now, and there's a lot of, there's a lot of like intentionality in this manifestation and I think it's so awesome that it's sure it's easy for you to sit here now and to like tell these stories about how big it was, but, like you know, and how you always knew it was gonna be big, but the fact is like you really were believing it at day one, at day negative 20, you know, like, and I think that is just so awesome. And look not to say that every single thing is gonna work out every time, but the fact is like, when you put your heart and soul into a singular focus, magic happens and luck happens. Not because you're sitting there waiting for luck, but because you're out in a freaking parking lot with your last dollar, frying a piece of chicken for one of the most famous food bloggers in LA and just cracking it open to make sure. Like that all is quote unquote lucky because you did the work Right now.
Speaker 1:Now, obviously, bill, you come into the picture and you're like oh yeah, three high school dropouts fried chicken. Sure, all, I'll join up, like I did wetsels and blaze, so I know how to do. How in the world did they?
Speaker 2:recruit you. Well, it's interesting. First of all, my son went down and saw them in the parking lot and my son said that you got to look at this one. And then they moved from the parking lot. The older brother of one of them put up the money for the inline store in East Hollywood and my other partner in wetsels and blaze pizza went down and saw it and he goes. I got our next deal and I went down and tried it and the first bite it was instant, it was awesome, it was cool, it was fabulous in every way and I was sold from the minute I first tasted it and we made a deal with the guys.
Speaker 1:So what, like when you saw the food. So it was the food that first connected you. No, not the team.
Speaker 2:No, it was the food. It was the food he hated us dude.
Speaker 3:I don't remember that. He's like we put you guys out of the deal and we're like, ah, it's a phone bill, so he took us with the chicken.
Speaker 2:But no and no. But then and then the fit and the story you know they had with the following on Instagram and the article and Eater LA, it just always. It just all fell together and it was just very clear that this was the next deal and we told people about it and people wanted to get involved. And then we called up the guy that put LeBron in the blaze pizza deal and he wanted to invest. And I said you can't invest unless you can bring a superstar. And he went down his list of people, clients they worked with and he goes. Well, maybe we can do Drake. I said you bring Drake in and you can get a big piece of the business. And 30 days later we had a deal with Drake to be an investor and you guys crushed Drake's birthday.
Speaker 2:Oh yeah. But Drake invested when we had one frigging chicken store and he's telling us Absolutely there was one store. We sold him on this concept when we had one store.
Speaker 1:Now, bill, let's let's talk a little bit about the numbers. All right, if we can. I don't know what you're comfortable sharing. What are the stores doing on average?
Speaker 2:We're about 2.8 million per restaurant.
Speaker 1:That's crushing it. That is just like it's crazy. So what do you think what's Dave's hot chicken worth today, going from going from a $1,000 of food and fryers in illegally cooking in a parking lot to today, what do you think it's worth? Well, you're a smart guy, we have 160 restaurants, and 161, I believe, as of this morning.
Speaker 2:You're smart, you know. One was a couple hours ago, we opened that one and we're running at our system wide sales of 450 million plus.
Speaker 1:That's amazing, it's crazy.
Speaker 3:It's crazy.
Speaker 1:I'm like, do you ever take a step back sometimes and like, as you're sitting there in your tub of money, do you ever just think, holy cow, like how did this happen? Because this is over how many years.
Speaker 3:This is over six, seven years, seven years.
Speaker 2:They started the parking lot in 17. And we made our deal and started working to them at the beginning of 19.
Speaker 1:So this meteoric rise, like, do you ever take a step back and be like what is going on?
Speaker 3:Yeah, I mean the guys have this insider joke. We're really each other. What a great idea it was to do Dave's hot chicken. What a great idea this was. And we'd have to make this joke like imagine we didn't do it, where we would be like just working, like I'd be doing God knows what, like a stand up comedian making no money, and Dave probably got a restaurant right now. So we always like to make that joke of like where we would be and what a great idea it was to like follow through with it.
Speaker 1:But I love that and follow through with it. Yeah, because how many freaking ideas die in the graveyard Right? Oh, so many. And it's like I love that and follow through.
Speaker 3:I think that's so cute, the funny thing is when, when days was originally thought of.
Speaker 3:It was thought of to be because we're a big group of friends and we were supposed to be a concept, with a big group of guys that would all invest and open a food truck, but a lot of people didn't believe it, a lot of people didn't want to do it, and me, tom and Dave were kind of the only ones throughout this five, six month recipe course that I've believed it the whole time. And the funny thing is, I think to myself sometimes I'm like Dan, I'm like you're convincing these guys that this could possibly work.
Speaker 3:But I'm like, yeah, no idea whether this is going to work or not, you know. So we really weren't running off of just belief and just this like sense of like the universe will help us and we it's just meant to be and we just have to do it. But there was a lot of times where I'd sit there and be like dude, you don't know anything about business at all, like when you drop that high school life why, are you like pushing?
Speaker 3:everybody so hard to do this. You know what I mean. But it's like a gut feeling of like you just you just knew like this was something special and you had to do it.
Speaker 1:So right. So so, speaking of have to do something. It's interesting because, you know, started off with a whole group of friends, as you were saying. Then it kind of whittled down to three, added four, added, added Bill, added Drake, right, like. So you've kind of like added some people along the way, but why is it called Dave's Hot Chicken? Why not Arman's Hot Chicken or Tommy's Hot Chicken? Because Arman's. Hot.
Speaker 3:Chicken sounds like somewhere you get your credit card information stolen. It's not. It's not somewhere you want to. If it was Arman's Hot Chicken, I don't think we'd be having this combo right now, dude, we had to keep it neutral.
Speaker 1:Oh my gosh, I just want to say you may have heard it on this podcast, but it was not said by the founder of this podcast.
Speaker 2:It was said by the founder of Dave's oh my gosh.
Speaker 2:I think it's funny because we were doing a work, and the other thing about it was again, there are high school dropouts and yet they're marketing geniuses and they have this wisdom that I can't kind of bottle, I can't describe it, but you know, a lot of companies like mine would throw the founders to the side, and we got this and we have not taken that attitude at all, and it's not because we're nice guys, it's because there's something genius about founders and they have a sixth sense for what they did, how they created it, and we listen to Arman every day on anything we do marketing wise. He sees it and gives us a feel whether it's right and true to what they created, and that's why this thing has worked so well.
Speaker 1:Yeah, it's like the secret ingredient, I feel like is truly caring and the founders care so much and it just is something where they don't have to learn the core values, they don't have to learn what it is, they just are that they exude it Right. It's that personification of what it's supposed to be about and I think that's so powerful when the founders, you know, stay on. I think that's beautiful.
Speaker 2:Oh it's great. And people early on said you know, dave doesn't need it. Dave's a bad name and Dave's is a freaking great name. And it works and you sit there and we own it and we have a federally registered trademark and it's the number one hot chicken concept in America. It's the fastest growing restaurant chain and it just is working and you have to believe in it.
Speaker 3:Yeah, I remember the talk like it was yesterday. We would think about all these things and one day we're like dude, just call it Dave's hot chicken. We're like you're Dave, you're the chef, this is, it's technically your hot chicken. Like you're making it, it's Dave's hot chicken. We're like how much more can we overthink it? You know, and just we're like it doesn't matter. And we're like the name's, the name we're gonna like the product is going to make the name, the name is not going to make the product.
Speaker 3:So regardless of what we call it. If we, if we execute, the name will just be famous. Except those are moms. I don't think we can do that. I don't know how hard it would have to execute that one. So you know small execution with Dave's.
Speaker 1:I think that makes so much sense and it's. It's what a great story and and truly right. The name really is the name right. Come up with a name that's good. Don't overcomplicate it, don't overthink it. I love that. It's like simple, direct. There you go and you know, I think you're right Like I think probably Tommy's hot chicken could have worked too. I mean, there is there is a burger.
Speaker 3:That's why that was the main reason we did the Tommy's burgers.
Speaker 2:Tommy's burgers it would have been, but not a lot of it's Dave's out there, so it's all kind of work.
Speaker 3:And we would say that everybody knows a Dave, like everybody knows a Dave.
Speaker 2:And if you look at the restaurant today, we have been true to what they created. That restaurant that we build today looks very much like what they built, you know, in East Hollywood, and the menu board is virtually identical. We have not added hardly anything to the menu board and again, because they're genius of keeping it simple, like in and out, where you've got a simple menu, and that simple menu is easy operationally, it's easy for the guest and it's also interesting, it's easy for the employees. It's not. There's much less stress working in a Dave's than there is in a McDonald's or a Carl's, because those menus are so broad. There's so much crap to do.
Speaker 1:So I guess the question is when are you adding burgers and salads to your menu?
Speaker 2:Today I would be never.
Speaker 1:Yeah, as you're looking at your expensive watch that I bought for you. So I love that, you know. I think my only suggestion would be I want something that's like I want something that there's medium and there's hot. Right, I love the medium, I want it like a little bit more, but the hot's a little too much for me. It's like and it's so funny because I've gone with three people and they've all said the same thing Hot's, too hot, medium to medium. I'm like what I want is like yeah, right, it's like a medium, rare, plus. That's how I get my steaks.
Speaker 2:I'm right, but they did that. They did that, you did it on the mile.
Speaker 3:Yeah, we do it to every level. The way we do it is like if it's a medium, medium plus, we'll put medium on it and then we'll slap each side with a little bit of hot, like one little dose of hot, so you get like a percent on some medium.
Speaker 2:But I don't think we ever like Well, you did extra mile, we did extra mile, we did extra everything.
Speaker 3:Yeah, right, we could probably.
Speaker 1:Can I do an extra medium? If I go in there and ask for extra medium, will they know or no? Oh, there we go. That's a secret menu item.
Speaker 3:Extra, yeah, let's see what you do. Extra, yeah, yeah, let's get it, let's call it.
Speaker 1:Let's call it Zach's way. I want Dave's Zach's way.
Speaker 3:It's not that Everybody knows Zach Zach is like a Dave, you know, like Zach's way.
Speaker 1:Now we can probably start making that Dude.
Speaker 3:I would dream to come true.
Speaker 1:Yeah, there we go, cause what I do now is I'll get one hot and one medium and I'll just be like, oh, a little too hot, ooh, not quite spicy enough.
Speaker 3:No way, that's so funny. That's what I do.
Speaker 1:But anyway, how do people find? Obviously you could find Dave's hot chicken everywhere. Where's the best place to find you?
Speaker 2:Go to the website. Just go to our locations.
Speaker 1:Awesome. So so go to go to Dave's hot chickencom Incredible place. Love what you guys are doing. I know you could find Bill on lots of panels on the conference circuit, armada. Where. Where can we find your musings?
Speaker 3:I'm not so happy. I go with panels with Bill sometimes, but normally I'm just on the office or on social media. So you guys can find me at Armand organizing on social media if you guys want to follow.
Speaker 1:Awesome. Well, armand for manifesting a big dream and living small, and Bill for trusting your gut with the main course of chicken and taking a chance with the side of a few crazy founders. Today's Ovation goes to both of you, bill and Armand. Thanks for bringing us Dave's hot chicken. Thank you.