Jun 10, 2024 · 1h 6m · how-i-built-this
Dave’s Hot Chicken: Arman Oganesyan
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of How I Built This, host Guy Raz interviews Arman Oganesyan about how four childhood friends turned a $900 East Hollywood parking lot pop-up into Dave's Hot Chicken, an international fast-casual powerhouse. Through fine-dining culinary standards, grassroots marketing, and disciplined multi-unit franchising partnerships, the founders achieved explosive global growth and industry-leading restaurant performance.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 34.9% of the talking time here. How this is scored →
Guy as informed peer 3.1 Guest teaching 2.6 Guest disagreement 0.2 Guy pushing back 0.6
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 55:15 Arman directly corrects Guy regarding upfront cash payouts
When Guy assumes the investment deal offered the founders upfront cash compensation, Arman firmly denies it twice, clarifying all funds went directly to corporate hiring.
Hardest push from Guy ▶ 57:45 Guy challenges the meaningfulness of celebrity investorsGuy rejects the common pitch that celebrity backers add real business acumen, explicitly noting that fame only indicates capital rather than investor quality.
Biggest teaching moment ▶ 12:45 Arman educates Guy on artificial versus operational restaurant linesArman breaks down how restaurants can artificially manufacture long queues through slow order turnaround, contrasting that with true operational excellence.
Guy holds their own ▶ 1:01:07 Guy rattles off fast-food industry benchmark AUV metricsGuy demonstrates deep industry knowledge by citing annual unit volumes across Subway ($600k), Taco Bell ($1.8-2M), McDonald's ($2.2M), and Chick-fil-A ($9M) to benchmark Dave's $2.8M performance.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| Guy Raz Announces the Launch of a New Podcast Newsletter | 3 | 1 | 0 | 0 | Guy Raz opens the show with an intro on the psychology of long food lines and hyping a brand, framing Dave's Hot Chicken's founding story before introducing Arman. | |
| Arman's Armenian Roots, Acting Aspirations, and Early Comedy Ventures | 2 | 2 | 0 | 0 | Arman shares his early background growing up in an Armenian-speaking household, dropping out of high school, and pivoting from acting to Vine comedy. | |
| Dave Kopushyan's Culinary Rigor and the Founders' Early Anxieties | 3 | 2 | 0 | 0 | Guy asks about co-founder Dave Kapushian's fine-dining background at French Laundry and prompts Arman on the anxiety of being in one's mid-twenties without a clear path. | |
| Howlin' Ray's Inspiration and the Decision to Pursue Hot Chicken | 4 | 4 | 1 | 1 | Arman explains how visiting Howlin' Ray's inspired them, offering an insider critique of artificial restaurant queues versus operational throughput. | |
| Formulating the Concept, Enlisting Friends, and Choosing the Tender | 3 | 3 | 0 | 1 | Arman details choosing the chicken tender over breasts to differentiate their product and recounts how they planned a nationwide franchise from zero dollars. | |
| Perfecting the Recipe, Mascot Inspiration, and Accidental Pickle Brine | 2 | 3 | 0 | 0 | Arman explains finding their rubber chicken mascot at a swap meet and discovering their signature pickle juice brine by complete accident. | |
| Pivoting to a Parking Lot Pop-Up with a $900 Budget | 2 | 2 | 0 | 1 | The co-founders pivot from an unaffordable food truck to a $900 parking lot pop-up in East Hollywood without seeking permits. | |
| Mid-Show Break: Teasing Rapid Pop-Up Growth and Lost Cash | 2 | 2 | 0 | 0 | Arman recounts handing out samples at local bars, Eater LA critic Farley's surprise visit, and the ensuing rush of 90 people in line on night six. | |
| Managing Grueling Operations and Distributing First Major Profits | 3 | 4 | 0 | 1 | Arman details staggering menu launches (tenders first, sliders later) to create multiple media waves and describes making their first $10k each in profit. | |
| The Midnight Dumpster Search for Red Chili Oil Money | 1 | 2 | 0 | 0 | Arman shares the story of accidentally throwing their cash into a dumpster bag soaked in red chili oil, alarming an unsuspecting bystander. | |
| Opening the First Store and Developing Distinct Visual Branding | 4 | 2 | 0 | 0 | Guy and Arman discuss the equity philosophy of owning a percentage of a cow rather than a grape and how Los Angeles served as an ideal media accelerator. | |
| Kitchen Design Inspired by "The Founder" and Franchise Ambitions | 3 | 3 | 0 | 1 | Arman describes mimicking the kitchen efficiency design from 'The Founder' to build an island prep system and turning down unqualified early investors. | |
| Mid-Show Break: Teasing Celebrity Backing and Franchise Deals | 3 | 2 | 0 | 0 | Arman tells the story of John Davis leaving a post-it note and introducing them to restaurant veteran Bill Phelps, and how Arman staged a social media post to pack the restaurant. | |
| Structuring Dave's Franchise Co. and Establishing Growth Protocols | 5 | 4 | 1 | 2 | Guy drills into the equity structure and payouts; Arman clarifies they took no upfront cash, formed Dave's Franchise Co., and adopted strict multi-unit franchisee standards. | |
| Strategic Role of Celebrity Investors in Fueling Franchise Sales | 7 | 4 | 1 | 3 | Guy pushes back against the substantive value of celebrity investors; Arman explains Drake and Samuel L. Jackson provided institutional legitimacy to sell franchises to large multi-unit operators. | |
| Maintaining Corporate Balance, Long-Term Vision, and Skill Versus Luck | 3 | 2 | 0 | 0 | Arman reflects on balancing veteran corporate leadership with youthful consumer perspective, concluding that while timing and luck matter, product quality remains supreme. |
Statements from this episode (24)
Oganesyan: High-end prep-heavy restaurants have very small profit margins
“Especially the types of restaurants that he was working in, the profit margins were probably very small. Because of the types, you know, the type of prep that went into it and the quality of food that went into it.”
Oganesyan: Restaurant operational excellence requires fast throughput on long lines
“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, their food, In, i…”
Oganesyan: Scalable franchise concepts cannot require franchisees to bake fresh bread
“If we're going to be a franchise concept, you know, you can't ask your franchisee to make their own bread.”
Dave's Hot Chicken was built from day one specifically for franchising
“We wanted it to be a franchise, and we wanted it 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.”
Dave's Hot Chicken logo originated from a swap meet rubber chicken
“So we bought that chicken and obviously that's eventually what ended up becoming our logo was that rubber chicken.”
Dave's signature brine was discovered accidentally in a Vlasic pickle jar
“And then obviously we added a little bit more recipes to the to the pickle juice, but the pickle juice eventually became our brine. And it was like accidental discovery.”
Dave's Hot Chicken founders launched their original pop-up with a $900 budget
“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 Tom's like, okay, I'll cover whatever's left, you k…”
Dave's Hot Chicken launched its original pop-up without operating permits
“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 use paperwork to open up on a street. He's like, we either d…”
Oganesyan: Major press before operations are ready harms a business
“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.”
Oganesyan: Dave's Hot Chicken pop-up generated thousands of dollars daily
“We're doing like a few thousand a day.”
Founders paid themselves $10,000 each in their second month of operations
“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.”
Founders hid nightly cash in styrofoam to-go containers to prevent robbery
“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 the night, we take that home with us.”
Founders should prefer 10% of a cow over 100% of a grape
“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 33% of a pop-up. So, to us, it wasn't how much, what was the percentage …”
Oganesyan: Los Angeles turned hot chicken into a nationwide trend after Nashville
“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…”
Oganesyan: Scaling restaurants is almost impossible without experienced partners
“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.”
Oganesyan faked a 'no line' post to pack the restaurant for investors
“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 posted that we didn't have a line just because I wanted to be extra packed up. So when they came in, there was lik…”
Founders took zero upfront cash in their 2019 investment deal
“Yeah, but we earned no upfront cash. No, no. We just, the money we raised kind of just went to you know, hiring, you know, operations people and, you know, our head of sales and.”
Founders acquired the Los Angeles territory and own 11 franchise stores
“So we kind of bought the territory of, like, Los Angeles, and with the founders, we own, like, I think, 11 stores now.”
Brands should only franchise to established multi-unit operator groups
“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…”
Celebrity investors helped convince large multi-unit operators to buy franchises
“I think what it really helps with this 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 popular as th…”
Oganesyan: Dave's Hot Chicken has reached approximately 200 open locations
“And now we're like, 200.”