The Plot Chickens: Why Poultry Purveyors Are Proliferating Nationwide

In 2017, and with only $900, friends Dave Kopushyan, Arman Oganesyan and Tommy Rubenyan started a pop-up fried chicken “restaurant” on a street corner in Los Angeles’ East Hollywood. It was quite different from Kopushyan’s haute-cuisine background at French Laundry, a Michelin three-star restaurant in Napa Valley.

Yet just under 10 years (and a global pandemic) later, that little roadside stand, Dave’s Hot Chicken, operates some 400 locations globally. Built on the back of Nashville-style chicken and social media virality, Dave’s is one of the fastest-growing quick-service restaurant (QSR) concepts in the U.S. And Dave’s is far from the only one. 

The meteoric rise of chicken joints like Dave’s, particularly in the 2020s, has become omnipresent and inescapable. One can almost certainly name five or more off the top of one’s head: Chick-fil-A, Raising Cane’s, Wingstop, Zaxby’s, not to mention legacy brands such as KFC, Church’s and Popeyes. Yet, aside from Dave’s, virtually none of these brands are new, or were even born in the 21st century. For all its recent hype, Chick-fil-A opened its first brick-and-mortar location in 1967. But chicken QSRs have captured the public imagination, and many of these brands are vying for prime retail spaces in order to keep up.

“Chicken is a pretty neutral protein, and you can do a lot with it,” Dannon Shiff, Dave’s director of real estate, told Commercial Observer. “It becomes a canvas for different flavors. Whether you’re doing rotisserie style … or your old-school bucket chicken — KFC, Church’s, Bojangles, etc. But I think what you’re seeing now is just the ability for chicken to be a palate and a canvas for other flavors. [Dave’s] has gone down the road of Nashville style. It’s a flavor profile, it’s a spice, it’s a different take on what others are doing with chicken. And I think that the niche of each individual chicken concept has found its own path.”

For the moment, Chick-fil-A is the reigning champ of the chicken wars in terms of both annual sales and average sales per location, known in the industry as average unit volume (AUV). The house that S. Truett Cathy built pulled in $22.7 billion in system-wide sales in 2024, according to QSR Magazine’s latest annual industry report, with an AUV of $7.5 million. Popeyes, which came in second in terms of sales, pulled in just $5.7 billion in 2024, with an AUV of $1.8 million.

Still, QSR’s report paints different pictures depending on the statistic. Both Chick-fil-A and Popeyes had over 3,100 U.S. locations by the end of 2024, the majority of which are operated or licensed by franchisees. Raising Cane’s, whose total sales that year came in third with just under $5 billion, reported an AUV of $6.6 million. Impressive, considering that Cane’s operated fewer than 830 locations at the end of 2024 and almost all were company-owned.

KFC operated the most U.S. locations of any brand that QSR Magazine surveyed, with 3,669 by the end of 2024. Yet, despite losing over 100 U.S. locations in 2024, the Colonel dominates his competition globally, with well over 30,000 locations across 150 countries and counting. The brand is also planning expansions for Saucy by KFC, its smaller-footprint cousin that launched in late 2024.

Despite being a less-than-household name compared to its fellow hens, Louisiana-based Krispy Krunchy Chicken operated the second most locations in 2024, with 3,168, and grew the most that year with 325 new U.S. outposts. Yet the chain’s $800 million in total 2024 sales and its $300,000 AUV finished dead last in QSR’s report. Wingstop, meanwhile, grew the second fastest in 2024, with 278 new U.S. locations that brought its total count to 2,204. 

Chicken-focused QSRs are growing in virtually every corner of the country, from rural areas to Manhattan. In New York, the closure of many merchandise retailers has paved the way for chicken joints to come a-cluckin’ in, according to Jonathan Bowles, executive director of Manhattan-based think tank Center for an Urban Future, which tracks chain retail in the city.

“Popeyes has had the second-largest gain of any retailer in New York City since the pandemic,” Bowles said. “Only Verizon Wireless had a bigger gain. In comparison, Popeyes is going up and up and up since the pandemic, but McDonald’s has declined by 14 stores since 2019. Burger King also has seen decline since 2019. It’s worth mentioning that it seems like a lot of these burger chains are selling more chicken than they used to. Like with Burger King and Wendy’s, for example, chicken has become a bigger part of their sales than it was before.” 

Although the sheer size of Dave’s flock isn’t yet on the same level as its big-name competitors, and was therefore excluded from QSR’s survey, the velocity of its growth in recent years is stunning. By late 2018, Dave’s Hot Chicken had crossed the road from its pop-up into a nearby strip mall, and began expanding to several locations across L.A. No doubt hampered by the pandemic, Dave’s had just seven total locations by the end of 2020, Shiff said. 

2021 proved the turning point — the brand operated 40 stores by the end of that year, and 100 the year after that. 

Shiff chalks up that sudden success to a superior concept, and superior chicken.

“The menu you see [at Dave’s locations] in the Middle East is the menu that we have here,” he said. “It’s the menu that we have in the U.K. We haven’t done anything to change that. And I think that speaks to the quality of the product. I think that speaks to the demand for something different. And we haven’t done what other brands have done, which is to do the British version of Dave’s. We just brought Dave’s, and the fans came and took us for who we are. I think that authenticity is real. We didn’t have to sacrifice ourselves to get into the market.”

Chick-fil-A and Raising Cane’s, meanwhile, are the undisputed industry leaders despite wildly different menus. Both brands have constructed an uncanny, almost cult-like level of trust with their customers. Quality of ingredients, preparation and consistency is most important, sure, but deep trust is built in ways that commercial brands often overlook.

Both provide comforting, homespun vibes alongside their flagship product. For Chick-fil-A, it’s the notoriously friendly customer service. Closing for business on Sundays, while surely frustrating for some customers, helped shape its mythos and implied Christian principles that few other commercial enterprises would dare touch. For Cane’s, it means having, essentially, one meal on the menu: chicken tenders, fries, coleslaw, Texas toast and secret sauce. That’s it, no frills. Naming itself after the founder’s dog probably doesn’t hurt, either. 

Chick-fil-A, which operates a unique franchisee system wherein the company usually owns a given franchise location’s land, building and equipment, is rewriting the rules of the game when it comes to QSR real estate strategy. Greater success means greater capital to pay for better locations and more square footage. Where many QSRs average around 2,000 to 3,000 square feet, Chick-fil-A locations often double that footprint. 

In early January, a private investor purchased the ground lease of a newly built, 5,525-square-foot Chick-fil-A location in Placentia, Calif., for $7.9 million. The deal is one of only four QSR sales to exceed $7.5 million in California over the past two years, according to brokers SRS Real Estate Partners. The other three, naturally, were Chick-fil-A and Raising Cane’s properties. 

Separately in late 2022, a 4,821-square-foot Chick-fil-A in Livermore, Calif., sold for 10.4 million. Few could have predicted such prices just a few years ago, according to SRS Senior Managing Principal Matt Mousavi and SRS President Garrett Colburn. 

“Fast food traditionally was like a $1 million, $2 million deal,” Mousavi said. “Well, then it went to four, then it went to five. Now it goes to seven, eight, 10 million. Ten years ago, you probably would never, ever dream of seeing such a thing. You’d say, ‘There’s no way that tenant can pay $300,000 in rent. My Del Taco’s paying $80,000, and they can barely afford it. How can these guys afford $300,000 rent?’ Well, Del Taco does like $2 million in sales. These guys are doing $9 million in sales. So, when the sales are there, they can pay the rents. And they need to pay the rents to get the best sites.”

Colburn agreed. “I would say they’re the highest rents we see in the market. They’re on the biggest and best sites. They control the biggest and best real estate, and they’re able to pay [market rent] for those sites.”

The 4,000- to 5,000-square-foot spaces account for only the actual buildings, too. Drive-thrus and car stacks, a necessity for many Chick-fil-A and Cane’s locations these days, can tack on thousands of square feet and essentially force those brands to acquire much larger spaces for build-to-suit development. Even then, drive-thru buildup can cause traffic pile-ups and noise concerns. 

Indeed, Chick-fil-A has faced lawsuits from other businesses claiming that excessive drive-thru lines blocked access to their entrances. In 2023, a Chick-fil-A location in Charlotte, N.C., caused traffic backups so intense that local officials ordered the poultry purveyor to scrap and redevelop the site. The previous year, the Santa Barabara, Calif., City Council nearly declared Chick-fil-A a “public nuisance.”

“It’s pretty wild to see the evolution of that particular piece of real estate, especially the drugstore box that’s sitting on an acre and a half, two acres,” Mousavi said. “It’s a 15,000-square-foot building with a drive-thru and plenty of parking. And then you wake up one day and it’s a 3,000-plus-square-foot Chick-fil-A with a drive-thru. … We haven’t seen those hard corners go in this direction before, in terms of being able to capitalize those corners at similar rents and not lose value, while simultaneously losing that gross leasable area square footage.”

The ability of superstar brands to pay such top-line prices for the best real estate presents challenges for plucky, modestly sized competitors such as Dave’s. 

Aside from general availability issues, there exists a gap between high-AUV brands like Chick-fil-A and Cane’s and their smaller competitors when it comes to landlord and rent expectations, Shiff said, particularly in markets like Southern California. When a ground lease sells in Orange County for nearly $8 million, for example, some landlords start to quote prices that everyone else simply can’t pay. 

“Once you’ve got those cream-of-the-crop, top-paying-rent tenants out of the way, there’s a reset for the rest of us,” Shiff said. “Chick-fil-A, Cane’s and In-N-Out in L.A. and Southern California in general, have driven rent prices … and it’s because they’ve stepped up in those markets. I’ve heard of a $700,000 ground rent for one brand, and there’s nobody else paying that.”

Yet, Dave’s market agnosticism and franchisee model have helped counter those natural disadvantages. Few QSRs aim to establish a presence in a town like Billings, Mont., for example, let alone within their first 500 locations. Dave’s was there within its first 300. That flexibility has driven its rapid growth, Shiff said, particularly to other countries such as Canada, the U.K., the United Arab Emirates, Qatar and Saudi Arabia. 

Dave’s plans to open 140 or more new locations in 2026, Shiff said. And, as of early January, it has sold the rights to about 1,200 stores worldwide. Not too shabby for a group of friends who sold fried chicken out of a parking lot less than nine years ago.

“I think we’re going to have some of the similar struggles that everybody else is having — just finding space, getting things open fast,” Shiff said. “But, you know, I think the future is looking bright. We’re already looking at 2027 and 2028 deals, and, if it’s the right location, we’re going to lock them up today to know that we’re going to continue to build those markets for the future.”

Nick Trombola can be reached at ntrombola@commercialobserver.com.