Roark Capital struck a $1bn deal to acquire Dave’s Hot Chicken, further cementing its presence in the fast-growing restaurant franchise sector.

The Atlanta-based private equity firm, which manages $38bn in assets, already owns an impressive portfolio of restaurant brands, including Arby’s, Culver’s, and Subway, which it acquired last year. Roark’s latest move aligns with private equity’s growing interest in franchise-based businesses, known for their predictable royalty revenue and lower operational costs.

The deal comes as restaurant operators face rising labor costs and inflation, prompting many brands to raise menu prices. Despite these challenges, Dave’s Hot Chicken has capitalized on the surging demand for Nashville-style hot chicken, rapidly expanding its footprint. The Pasadena-based brand now operates over 250 locations worldwide and generates approximately $1bn in annual sales.

Earlier this month, Reuters reported that Dave’s Hot Chicken was working with investment bank North Point on a sale, drawing interest from multiple private equity firms. The chain is majority-owned by its founders, Dave Kopushyan, Arman Oganesyan, Tommy Rubenyan, and Gary Rubenyan. Notably, rapper Drake is also an investor.

This acquisition marks another major investment in the restaurant industry by private equity, reinforcing the sector’s appeal as a high-growth, scalable asset class.