Dave's Hot Chicken has taken the fast-casual restaurant world by storm since its humble 2017 beginnings as a parking lot pop-up in Los Angeles. What started with a single folding table and a few hundred dollars in startup capital has exploded into one of the fastest-growing franchise concepts in the United States - with celebrity investors, hundreds of locations, and a waitlist of aspiring franchise owners eager to get in on the action. If you're one of those entrepreneurs, you already know that opening a Dave's Hot Chicken franchise requires serious capital - and that's exactly where this guide comes in.
Financing a Dave's Hot Chicken franchise is a significant undertaking. With total investment estimates ranging from $500,000 to over $1 million depending on location, format, and build-out costs, most franchise owners need a mix of debt financing, equity, and smart capital planning to get their doors open. Whether you're looking at SBA loans, conventional commercial financing, or alternative business lending products, understanding your options - and how to position yourself for approval - can make the difference between signing your franchise agreement and watching someone else open in your market.
This guide covers everything you need to know about Dave's Hot Chicken franchise financing: what the franchise costs, how lenders evaluate these deals, which loan products work best, and how Crestmont Capital can help you secure the funding you need to launch and grow your Dave's Hot Chicken location.
In This Article
Dave's Hot Chicken is a fast-casual restaurant concept specializing in Nashville-style hot chicken tenders and sliders. The brand was founded in 2017 by Dave Kopushyan, a chef with Michelin-starred training, along with his childhood friends Arman Oganesyan, Tommy Rubin, and Gary Rubin. The concept launched in an East Hollywood parking lot and quickly earned a devoted local following before expanding into permanent brick-and-mortar locations.
What separates Dave's Hot Chicken from competitors is its focused menu, quality ingredients, and a distinctive spice system ranging from "No Spice" to "Reaper" - catering to heat seekers and spice novices alike. The brand has attracted celebrity investors including Drake, Samuel L. Jackson, and Boston Red Sox principal owner Tom Werner, adding significant brand cachet and media coverage that drives customer awareness.
Dave's Hot Chicken began franchising in 2020, and the brand's growth since then has been remarkable. By the mid-2020s, the system counted hundreds of locations across the United States and Canada, with international expansion underway. The brand is consistently ranked among the top emerging franchise concepts by industry publications like Entrepreneur and QSR Magazine.
The franchise appeals to operators for several key reasons. It features a simplified kitchen operation focused on chicken tenders and sliders, which reduces staffing complexity and food waste. The average unit volume (AUV) has been reported to be strong, with successful locations generating substantial revenue relative to their footprint. For operators experienced in the restaurant space, Dave's Hot Chicken represents an opportunity to tap into the booming hot chicken category - one of the fastest-growing segments of the fast-casual market.
According to data from the U.S. Small Business Administration, restaurant franchises consistently represent one of the most popular categories for franchise business loans, and hot chicken concepts like Dave's have benefited from demographic trends favoring bold, flavorful food among millennial and Gen Z consumers.
Before applying for a franchise loan, you need a clear picture of the total investment required. Dave's Hot Chicken's Franchise Disclosure Document (FDD) outlines a range of startup costs that vary significantly based on location, real estate conditions, and construction requirements. Understanding these numbers is essential for sizing your loan correctly and preparing accurate financial projections for lenders.
The initial franchise fee for a single Dave's Hot Chicken location typically ranges from approximately $40,000 to $50,000. This fee grants you the right to operate under the Dave's Hot Chicken brand, access to their systems, training, and ongoing support. Multi-unit development agreements may offer fee discounts for operators committing to open multiple locations.
The total initial investment for a Dave's Hot Chicken franchise typically falls in the following ranges:
When you add the initial franchise fee, total investment ranges roughly from $510,000 to over $1,100,000 for most traditional dine-in or fast-casual formats. Ghost kitchen and non-traditional formats may come in at lower investment levels. Always consult the current Franchise Disclosure Document, as figures are updated annually and vary by location and franchise agreement specifics.
Beyond the initial investment, Dave's Hot Chicken franchise owners pay ongoing royalty fees (typically around 5-6% of gross sales) and marketing/advertising fund contributions (typically 2-3% of gross sales). When building your financial model for lenders, factor these as part of your operating cost structure and DSCR calculations.
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Apply Now ->Financing a Dave's Hot Chicken franchise requires a strategic approach. Very few franchise owners have $500,000 to $1 million sitting in a checking account - and even those who do often prefer to use leverage strategically rather than deploy all their liquid capital into a single business. Here's how experienced franchise operators typically structure their financing:
Most franchise lenders expect borrowers to bring at least 20-30% of the total project cost as equity. This means for a $750,000 total investment, you'd need approximately $150,000 to $225,000 in liquid equity (cash, not borrowed funds), with the remaining $525,000 to $600,000 coming from a loan or combination of loans.
Some franchise owners use Rollover for Business Startups (ROBS) arrangements to fund their equity injection from 401(k) or IRA accounts without incurring early withdrawal penalties. While ROBS structures require careful legal setup, they can be an effective way to generate equity capital. Consult a franchise attorney and tax advisor before pursuing this route.
Many successful Dave's Hot Chicken franchisees use a combination of financing products - for example, an SBA 7(a) loan for the majority of the project cost paired with equipment financing for kitchen equipment, and a line of credit for working capital. Structuring the deal this way can optimize cash flow by keeping certain payments lower or spreading repayment across multiple instruments.
In some markets, existing Dave's Hot Chicken operators may sell their locations, and seller financing can be part of the deal structure. Additionally, the franchisor occasionally maintains relationships with preferred lenders who have familiarity with the brand's financial performance. Ask your franchise development representative about any preferred lending relationships.
When you approach a lender for franchise financing, they'll evaluate your deal using several key metrics:
Multiple financing products can be used to fund a Dave's Hot Chicken franchise. Understanding each option helps you choose the right combination for your situation.
The SBA 7(a) loan program is the most popular choice for franchise financing. These loans are partially guaranteed by the U.S. Small Business Administration, reducing lender risk and enabling more favorable terms for borrowers. Key features include:
Dave's Hot Chicken is listed in the SBA's Franchise Directory, which simplifies and expedites the SBA approval process since the franchisor's agreement has already been reviewed. Learn more about SBA loans through Crestmont Capital.
The SBA 504 program combines a conventional lender loan with a CDC (Certified Development Company) loan backed by the SBA. It's best suited when you're purchasing the real estate for your franchise location rather than leasing. The 504 program offers fixed rates on the SBA portion and requires a smaller down payment than conventional commercial mortgages.
Non-SBA commercial loans from banks or alternative lenders offer faster processing and less documentation than SBA loans, but typically require stronger financial profiles, larger down payments (20-30%), and shorter repayment terms. For well-qualified borrowers with existing business banking relationships, conventional loans can sometimes offer competitive rates without the SBA guarantee fee.
Kitchen equipment for a Dave's Hot Chicken franchise can often be financed separately through dedicated equipment loans. Equipment financing uses the equipment itself as collateral, typically offers 100% financing with no down payment, and has terms of 3-7 years. This approach preserves working capital and allows you to keep other loan proceeds focused on build-out and startup costs. Explore equipment financing options at Crestmont Capital.
Once your franchise is operational, a business line of credit gives you flexible access to capital for inventory, payroll gaps, marketing campaigns, or unexpected expenses. Lines of credit are revolving facilities where you borrow only what you need and pay interest only on the drawn balance. Many franchise operators establish a line of credit alongside their term loan at the time of opening. See how Crestmont Capital's line of credit products can support your franchise operations.
For franchise owners who need faster access to capital post-opening or whose credit profile may not meet traditional bank standards, alternative lending products including revenue-based financing, merchant cash advances, or short-term business loans may fill gaps. While these carry higher costs, they offer speed and flexibility that traditional bank products do not. Explore small business financing options through Crestmont Capital.
By the Numbers
Dave's Hot Chicken Franchise - Key Statistics
$510K+
Minimum total investment
400+
Locations open or in development
5%
Approximate royalty fee
2017
Year founded
Crestmont Capital is the #1 business lender in the United States, specializing in fast, flexible financing solutions for entrepreneurs and franchise owners. We understand that franchise financing deals are complex - involving multiple funding sources, FDD review, franchise-specific underwriting standards, and tight timelines tied to franchise agreement deadlines. Our team has helped hundreds of franchise operators secure the capital they need to open and grow their locations.
Here's what sets Crestmont Capital apart for Dave's Hot Chicken franchise financing:
Our team understands the unique dynamics of franchise financing - including how to read FDDs, how to model unit-level economics for lender packages, and which loan structures make sense for fast-casual restaurant concepts. We've helped operators finance concepts in the restaurant and food service space, from Sonic Drive-In franchise loans to Culver's franchise financing, and we bring that knowledge to your Dave's Hot Chicken deal.
Unlike a single bank that can only offer its own products, Crestmont Capital connects you to a broad network of lenders offering SBA 7(a) loans, conventional commercial loans, equipment financing, and working capital lines. This means we can structure a comprehensive financing package that covers all your capital needs - from the build-out to the first day of operations.
Crestmont Capital offers dedicated restaurant business loans tailored to the food service industry. Our underwriters understand restaurant P&L structures, seasonal cash flow patterns, and the operational metrics that make fast-casual concepts like Dave's Hot Chicken successful. This expertise translates into faster approvals and better-structured deals for you.
Franchise agreements often come with deadlines - you may need to demonstrate financing within 60-90 days of signing your franchise agreement. Crestmont Capital's streamlined application process and relationships with responsive lenders help ensure you get decisions quickly, so you don't miss your timeline. Our commercial financing solutions are designed for speed and efficiency.
Many Dave's Hot Chicken franchisees don't stop at one location. Our team can structure financing with your growth trajectory in mind, ensuring your initial loan doesn't create barriers to future expansion. When you're ready for your second or third location, Crestmont Capital will be there to support your continued growth.
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Apply Now ->Qualifying for franchise financing requires meeting several financial and experiential thresholds. While specific requirements vary by lender and loan product, here are the general benchmarks you should aim for when pursuing Dave's Hot Chicken franchise financing:
Most traditional and SBA lenders require a minimum personal credit score of 680, with 700+ significantly improving your approval odds and interest rate. Alternative lenders may work with scores in the 600-680 range, though at higher rates. Before applying, review your personal and business credit reports and dispute any inaccuracies. Pay down revolving balances to improve your credit utilization ratio.
Franchise lenders typically require you to personally contribute 20-30% of the total project cost. For a $750,000 Dave's Hot Chicken project, that means $150,000 to $225,000 in liquid assets - cash, money market accounts, or other liquid investments (not retirement accounts unless using a ROBS structure). The lender may verify your liquidity through bank statements and investment account statements going back 2-3 months.
Prior food service or retail management experience is highly valued by lenders and the franchisor alike. If you've managed a restaurant, worked in food service operations, or owned another business, document this experience carefully. If you lack direct restaurant experience, Dave's Hot Chicken and its franchisor may require you to partner with an operating partner who has relevant background.
SBA lenders and many conventional lenders look for a personal net worth at least equal to - and ideally greater than - the loan amount. Net worth is the difference between your total assets (including home equity, retirement accounts, investment accounts, and business equity) and your total liabilities. If your net worth falls short, consider adding a co-borrower or guarantor.
Lenders will review 2-3 years of personal tax returns to verify your income history. Stable, documented income reassures lenders that you can service the debt during the pre-opening and ramp-up period. If your income varies significantly year to year, be prepared to explain fluctuations clearly.
A detailed business plan including market analysis, site analysis, competitive landscape review, and 3-year pro forma financial statements is typically required for franchise loans over $500,000. Crestmont Capital can help you understand what lenders want to see and how to present your projections credibly. According to the U.S. Census Bureau, detailed business planning correlates strongly with long-term business success rates.
To make this more concrete, here are several realistic financing scenarios for Dave's Hot Chicken franchise owners at different stages and situations:
Situation: A corporate executive with 15 years of management experience, a 740 credit score, $300,000 in liquid assets, and a net worth of $900,000 wants to open a Dave's Hot Chicken in a suburban market. Total project cost: $750,000.
Financing Structure: SBA 7(a) loan of $600,000 (80% of project) + $150,000 personal equity injection. 10-year term at Prime + 2.75%. Monthly payment approximately $6,200. With projected annual revenue of $1.2 million and net operating income of $120,000, DSCR would be approximately 1.6x.
Outcome: Strong candidate for SBA approval. Crestmont Capital can identify preferred lenders familiar with Dave's Hot Chicken and facilitate a smooth process.
Situation: An operator already running two successful fast-casual locations (another brand) wants to diversify into Dave's Hot Chicken. They have business cash flow of $180,000 annually, a 720 credit score, and $200,000 liquid. Total project cost: $850,000.
Financing Structure: $680,000 SBA 7(a) loan + $170,000 equity (20%). The operator's existing business revenues are used to demonstrate debt service capacity. Additionally, separate equipment financing of $150,000 is used to finance kitchen equipment outside the SBA deal, preserving loan proceeds for build-out.
Outcome: Multi-unit experience is a significant positive factor. Lenders see reduced risk with proven operators. Crestmont Capital structures the deal to maximize coverage and minimize the cash investment required.
Situation: A well-capitalized investor signs a development agreement to open three Dave's Hot Chicken locations over five years. They need financing for the first two locations, with plans to use cash flow from early locations to fund later openings. Total first-two-location investment: $1,600,000.
Financing Structure: Two separate SBA 7(a) loans staggered by 12-18 months. First loan: $960,000 (60% LTV). Second loan structured after first location demonstrates operating history. SBA facilities can be coordinated to avoid over-leverage.
Outcome: Multi-unit deals require careful coordination with lenders to ensure cumulative debt loads remain serviceable. Crestmont Capital's expertise in multi-site expansion makes them ideal for complex franchise financing situations.
Situation: An existing Dave's Hot Chicken location is being sold by its current operator. The purchase price is $900,000, including equipment, leasehold improvements, and goodwill. The buyer has a 700 credit score and $200,000 liquid.
Financing Structure: SBA 7(a) business acquisition loan of $700,000 + $200,000 equity (22%). The existing location's operating history provides strong support for lender projections - an advantage over new-construction projects. Repayment term may be 10 years.
Outcome: Existing operational history makes this an attractive deal for lenders. Crestmont Capital specializes in franchise loan deals of all types including resale acquisitions.
Situation: A Dave's Hot Chicken franchisee 18 months into operations needs $75,000 in working capital to fund a restaurant renovation and POS system upgrade before the busy season.
Financing Structure: Business line of credit of $100,000, secured by business assets. The operator draws $75,000 immediately and retains $25,000 in reserve. Interest-only payments on drawn balance. Line is revolving - can be repaid and redrawn.
Outcome: Established operations with 12+ months of financial history make LOC approval straightforward. Fast approval through Crestmont Capital ensures the renovation stays on schedule.
It's worth understanding how Dave's Hot Chicken franchise financing compares to other options in the franchise and restaurant space. This helps you benchmark your deal and make informed decisions.
| Feature | SBA 7(a) | Conventional Commercial |
|---|---|---|
| Max loan amount | $5 million | Varies (no limit) |
| Down payment | 10-20% | 20-35% |
| Repayment term | Up to 10-25 years | 5-10 years typical |
| Processing time | 30-90 days | 15-45 days |
| Collateral requirements | Flexible | Stricter |
| Best for | New franchise buildouts | Experienced operators with assets |
Understanding how Dave's Hot Chicken compares to other brands helps you contextualize the investment and financing requirements. According to industry data from Forbes:
Dave's Hot Chicken sits in the middle of the fast-casual investment range - accessible enough for motivated entrepreneurs to pursue, but substantial enough to require professional financing. This is precisely the sweet spot where Crestmont Capital can add the most value.
The total initial investment for a Dave's Hot Chicken franchise typically ranges from approximately $510,000 to over $1,100,000, depending on location, format, real estate costs, and local construction conditions. This includes the franchise fee ($40,000-$50,000), leasehold improvements, equipment, initial inventory, working capital, and other startup expenses. Always refer to the current Franchise Disclosure Document for the most accurate figures.
Yes. Dave's Hot Chicken is listed in the SBA Franchise Directory, which means SBA lenders can offer 7(a) loans for this franchise without requiring additional legal review of the franchise agreement. SBA 7(a) loans offer up to $5 million with terms up to 10 years, and are one of the most common financing vehicles for franchise buildouts. You'll need to meet credit, liquidity, and experience requirements set by your SBA lender.
Most lenders require an equity injection (personal down payment) of 20-30% of the total project cost. For a $750,000 project, that means $150,000 to $225,000 in liquid assets - cash or near-cash funds. Some operators use ROBS (Rollover for Business Startups) arrangements to deploy retirement account funds as equity. Beyond the equity injection, lenders want to see you retain adequate working capital reserves after closing.
Most SBA and traditional lenders require a minimum personal credit score of 680-700 for franchise loans. A score of 720 or higher significantly improves your approval odds and may qualify you for better interest rates. Alternative lenders may work with scores in the 600-680 range, though at higher rates. It's advisable to review and optimize your credit profile at least 6 months before applying for franchise financing.
SBA 7(a) loan approval typically takes 30-90 days from application to funding, depending on lender processing times and documentation completeness. Conventional commercial loans can close in 15-45 days. Alternative lenders can sometimes fund in as little as 24-72 hours for smaller loan amounts, but franchise buildout loans of this scale typically require more time. Crestmont Capital works to accelerate the process by ensuring your application package is complete and well-prepared from the start.
While not always a strict requirement, restaurant or retail management experience is a significant positive factor in franchise loan approvals. Lenders view experienced operators as lower risk. If you lack direct food service experience, having a strong management team or an operating partner with relevant background can compensate. The franchisor also has specific requirements around operator experience - review these in the FDD carefully before applying.
Yes. Equipment financing is a separate product from term loans or SBA 7(a) facilities. You can finance kitchen equipment through a dedicated equipment loan using the equipment itself as collateral, often at 100% financing with no down payment required. This approach preserves your working capital and allows your SBA loan proceeds to focus on construction and build-out costs. Crestmont Capital offers equipment financing solutions specifically designed for restaurant operators.
Interest rates vary based on loan type, lender, and your financial profile. SBA 7(a) loan rates are typically Prime rate plus 2.75% to 5.50%, resulting in current rates of approximately 9.00% to 14.00% depending on loan size and term. Conventional commercial loans may offer similar or slightly different rates. Alternative lending products carry higher rates but offer faster access. A strong credit profile and thorough application can help you secure rates at the lower end of the range.
Typical documents for a franchise loan application include: personal and business tax returns (2-3 years), personal financial statement, bank statements (3-6 months), signed franchise agreement or letter of intent from the franchisor, business plan with financial projections, resume/business biography, government-issued ID, and the franchise disclosure document. SBA loans may require additional forms specific to the program. Having these documents organized before applying speeds up the process significantly.
Yes, first-time business owners can and do obtain franchise loans. In fact, SBA programs are designed in part to help new entrepreneurs access capital. As a first-time owner, lenders will place greater weight on your personal credit score, liquid assets, net worth, and relevant management or industry experience. Having a well-prepared business plan, a strong financial profile, and working with an experienced lending partner like Crestmont Capital all increase your chances of approval.
A personal guarantee means you personally agree to repay the loan if your business cannot. Most SBA and conventional franchise loans require personal guarantees from all owners with 20% or more ownership stake. This puts your personal assets (home, savings, investments) at risk if the business fails. Some lenders may limit personal guarantee exposure through partial guarantee structures, but full personal guarantees are standard for new franchise financing. Understanding this commitment before signing is critical.
DSCR is the ratio of your net operating income to your annual debt service (principal + interest payments). A DSCR of 1.25x means your business generates $1.25 in net income for every $1.00 of debt payments - creating a buffer. Lenders typically require minimum projected DSCR of 1.20x to 1.25x for franchise loans. Your financial projections should demonstrate this threshold based on realistic revenue assumptions supported by comparable unit financial data from the FDD.
Yes, home equity can be used in some cases, though most SBA lenders do not count a HELOC or second mortgage as an acceptable "equity injection" unless the funds are already drawn and sitting in a bank account. Home equity can be counted as part of your net worth, which lenders evaluate. Using home equity also introduces additional personal financial risk, so consult with a financial advisor before pledging home equity for business purposes.
Buying an existing location (franchise resale) offers the advantage of existing financial history, which lenders find reassuring. The underwriting focuses on the business's actual trailing 12-24 months of revenue and cash flow rather than projections. The financing structure is similar - SBA 7(a) business acquisition loans work well for resales. However, you'll also pay for goodwill and existing assets, which can increase the total price. Crestmont Capital handles both new-build financing and franchise acquisition deals.
Crestmont Capital is the #1 business lender in the U.S., offering access to a wide network of lenders and loan products specifically designed for franchise owners. We help you identify the right loan structure, prepare your application package, navigate SBA requirements, and connect you with lenders who understand fast-casual restaurant franchise economics. Our franchise financing specialists can have you from initial consultation to funding in as little as 30-45 days for well-prepared applications. Apply at offers.crestmontcapital.com/apply-now to get started.
Ready to Finance Your Dave's Hot Chicken Franchise?
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Apply Now ->Dave's Hot Chicken represents one of the most exciting franchise opportunities in the fast-casual restaurant sector. The brand's momentum, celebrity backing, simplified operations, and strong consumer demand make it an attractive investment for motivated entrepreneurs. But realizing that opportunity requires capital - and navigating franchise financing isn't always straightforward.
The good news is that Dave's Hot Chicken franchise financing is well-supported by the lending market. SBA programs, conventional loans, equipment financing, and working capital solutions are all accessible to qualified franchise buyers. With the right preparation, the right lender partner, and a clear understanding of your deal economics, you can secure the financing you need to open your location and build a successful franchise business.
Crestmont Capital is here to guide you through every step of that process. As the #1 business lender in the U.S., we bring the expertise, network, and commitment to help Dave's Hot Chicken franchise owners secure financing quickly and on favorable terms. Whether you're financing your first location or expanding to multiple units, our team is ready to work with you.
According to the CNBC Franchise Coverage, franchise businesses consistently outperform independent restaurant startups in terms of survival rates, brand recognition, and access to financing. Dave's Hot Chicken combines the franchisor support and brand equity of an established system with the growth potential of a relatively young, rapidly expanding concept - a compelling combination for the right operator.
Apply today at offers.crestmontcapital.com/apply-now and take the first step toward owning your Dave's Hot Chicken franchise.
Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.