Like many, Bill Phelps, 69, CEO of Dave’s Hot Chicken and co-founder of Wetzel’s Pretzels, once aspired to great wealth. Now, he finds fulfillment in helping others achieve financial success.
In June, 19 Dave’s employees became millionaires in just two weeks after Roark Capital acquired a majority stake in the California-based chicken chain. Dave’s Hot Chicken was valued at nearly 1 billion USD.
According to the deal, all office staff, store managers, and assistant managers at Dave’s received bonuses nearly equal to their annual salaries, President and COO Jim Bitticks told Nation’s Restaurant News.
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Dave’s Hot Chicken CEO Bill Phelps. Photo: Bill Phelps |
Dave’s Hot Chicken CEO Bill Phelps. Photo: Bill Phelps
In a subsequent interview with CNBC, Phelps explained his intentions: "Some investors told me, 'You're giving away too much money, this isn't right'. They were absolutely right in protecting investor interests. But I also had a responsibility to the people who built this company, and I had to keep my commitment to all stakeholders in the deal," he stated.
Dave’s Hot Chicken was founded in 2017 when three friends, Arman Oganesyan, Tommy Rubenyan, and Dave Kopushyan, pooled 900 USD to open a chicken stand in a Los Angeles parking lot. Phelps became CEO of Dave’s in 2019, joining a group of investors who acquired a stake in the company to implement a franchising plan.
Phelps is a veteran in the franchise industry. He founded the fast-food chain Wetzel’s Pretzels in 1994 and served on the board of directors of Blaze Pizza until 2020.
In 2024, Arman Oganesyan shared on a radio program that many investors wanted to invest in the company. However, Phelps and his group were chosen because they were willing to recognize the efforts of Oganesyan and the other co-founders.
"A lot of people came here with the attitude, 'It's just luck, you guys don't know what to do next'," Oganesyan said. He believed Phelps and his associates understood that success wasn't just about luck.
Nearly six years later, recognizing deserving contributions remains a core element of Phelps' leadership style. At Dave’s, he avoids micromanaging, trusting his employees to do their jobs well.
Because of this philosophy, he also pays them generously. "One of the investors once told me that I had no concept of what a reasonable management salary was. And he was right, because I don't see them as management. They are partners on this journey, and I pay them as partners," Phelps laughed.
Phelps isn't the only CEO to create millionaires through acquisitions. In 1999, after selling Broadcast.com to Yahoo for 5.7 billion USD, investor Mark Cuban shared the wealth with his employees, making hundreds of them millionaires.
Cuban has repeated this practice with every company sale, starting with MicroSolutions to CompuServe in 1990, followed by the sale of a stake in HDNet in 2019, and a stake in the Dallas Mavericks basketball club last year.
Jay Chaudhry, billionaire founder and CEO of cybersecurity firm Zscaler, did the same when he sold his first company, SecureIT, to VeriSign in 1998 for 70 million USD, paid entirely in VeriSign stock.
Nearly two years after the deal closed, VeriSign's stock soared. Over 70 of SecureIT's 80 employees who received stock became millionaires.
"People went crazy. Because they had never thought of such a large amount of money. A lot of people bought houses and new cars. I know someone who even took six months off, rented a mobile home, and traveled around America. They could do whatever they wanted," he said.
Ha Thu (CNBC)
