Savory Fund, the Lehi, Utah-based private-equity firm, on Wednesday said that it has made an investment in Houston TX Hot Chicken.
The chain operates 11 locations in six states. It was founded in 2021 by Edmond Barseghian and plans to grow through franchising. The chain serves hot chicken sandwiches, tenders, salads, soups, waffle shakes, and loaded fries with seven different sauces.
It’s the latest indication of the rising popularity of hot chicken concepts, as brands such as Dave’s Hot Chicken grow rapidly across the U. S. While big chains like Popeyes, KFC, Chick-fil-A, and McDonald’s serve spicy versions of their sandwiches and nuggets,
For Savory, it is the latest in a string of investments in growth concepts. The firm has invested in concepts such as Swig, Via 313, Hash Kitchen, Pincho and Mo’Bettahs. The firm has $600 million in assets and combines restaurant industry experience with a focus on growth.
The firm called Houston TX Hot Chicken, or HHC, “a standout star of the hot chicken phenomenon.”
“Savory has been monitoring this flavor segment for the past five years,” Andrew Smith, cofounder and managing partner of Savory Fund, said in a statement. “We’ve met and looked at a lot of brands that are trying to do what HHC has already done, and we’re excited to make this strategic investment.” ”.
Barseghian said that the deal should help “amplify our operational capabilities.” “The journey ahead is electrifying,” he said.
Terms of the deal were not disclosed. Harrington Park Advisors was the financial advisor for HHC. Mayer Brown was legal advisor to Savory Fund. Greenberg Traurig was legal advisor to HHC.
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Houston’s hot chicken scene is sizzling. Over the past few years, Music City’s famous fiery fried chicken export has exploded in popularity across H-Town. But who exactly owns Houston’s hot chicken game? The answer is complex, with different key players all vying for a piece of the spicy pie.
The Hot Chicken Heats Up
Inspired by Nashville’s iconic Prince’s Hot Chicken Shack, hot chicken restaurants started popping up in Houston in the early 2010s. Small independent joints led the charge, tweaking the classic Nashville flavors to better suit local tastes. The trend started gaining serious steam around 2018 as hot chicken’s popularity boomed nationwide. By 2020 lines were winding out the door at many Houston hot chicken spots.
Major players started entering the market. Lucky’s Hot Chicken arrived in 2019 with its first Houston location, bringing a proven franchise model focused on nailing consistent spice levels. Homegrown chains like Houston’s Own Hot Chicken also expanded rapidly. Meanwhile, countless single-unit operations rounded out the scene.
There are no signs that the hot chicken craze will end any time soon. Competition is getting tougher than ever as small businesses and big chains fight to be the biggest in their fields.
Key Players in Houston’s Hot Chicken Game
With so many restaurants crowding into the hot chicken space a few big names have emerged as power players
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Lucky’s Hot Chicken: With 5 locations across Houston and a strong franchise system, Lucky’s has established itself as a major hot chicken force. Its range of consistent spice levels is a big draw.
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Gus’s World Famous Fried Chicken: While better known for traditional Southern fried chicken, Gus’s offers spicy chicken options that command attention in Houston’s hot chicken landscape.
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Houston TX Hot Chicken: Founded in 2021 by social media influencer Edmond Barseghian, this rapidly expanding chain now has 3 Houston locations. Its bold flavors and marketing have made it a brand to watch.
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Small Independents: Burning Beak, Hot Chick Houston, and The Kickin’ Chicken are just a few of the small independent bands that help shape the scene. Their neighborhood feel and individuality add to the variety of choices.
Different Ownership Structures
In Houston, ownership of Hot Chicken is split not only by brand but also by how the business is set up. This leads to distinct strategies and expansion models:
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Franchises: Lucky’s and emerging chains like HHC rely heavily on franchising for growth. This allows for quicker scaling but can risk brand consistency.
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Corporate Chains: Established brands like Gus’s operate their Houston units under corporate ownership. This provides tight operational control but requires major corporate investment.
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Independents: One-off restaurants are often passion projects of chef-owners. Their independence fosters creativity but limits expansion capabilities.
No single ownership structure dominates Houston’s scene. This diversity of approaches has fueled hot chicken’s explosive rise. Chains, franchises, and one-of-a-kind shops all offer something different.
Key Investors Flock to Houston Hot Chicken
Houston’s breakout hot chicken success has attracted investor interest. In late 2023, private equity firm Savory Fund acquired a stake in Houston TX Hot Chicken. With Savory’s backing, HHC plans to open 10 new locations across Texas by 2025.
Lucky’s Hot Chicken also took on an investment partner in 2022, teeing up an aggressive nationwide expansion. And behind many independent hot chicken concepts, local investors help bankroll startup costs in hopes of sharing in the profits.
For investors, Houston’s booming hot chicken market presents a tempting opportunity. Consumers’ spicy cravings show no sign of dying down. And the scene still has ample room for growth despite increasing competition. But quality and smart branding will determine which concepts truly thrive in the long run.
Customers Are the Ultimate Owners
While high-profile chains and investors may capture the headlines, Houston diners themselves ultimately decide hot chicken’s fate. Their patronage and preferences shape the landscape far more than any one owner. Consumers “vote” daily with their chicken purchases, collectively determining which flavors, brands, and structures earn their share of the market.
In a sense, Houstonians own hot chicken collectively. They choose which concepts to support, propelling humble startups into breakout stars or leaving arrogant brands behind. Savvy operators realize pleasing customers is their only path to success. In Houston’s hot chicken game, the diner is king.
So while many players help shape the scene, no one truly owns Houston’s hot chicken outright. Consumers crown their winners through loyalty. And local chefs and entrepreneurs will keep innovating, striving to earn their crown in this fiery, crowd-ruled kingdom. The only guarantee is more heat ahead in H-Town.
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FAQ
Who owns Houston’s restaurant?
The Houston’s Restaurant is part of a chain of high-end American casual dining restaurants owned by Hillstone Restaurant Group, whose main office is in Phoenix, Arizona. There are 39 Hillstone locations in 11 states.
Where is Houston’s Hot Chicken located?
Houston’s Hot Chicken will debut at the intersection of Green Valley and Pebble Road, taking over 2,029 square feet inside the former Brooklyn Bagel Deli.
Why is hot chicken so popular in Nashville?
And for decades, hot chicken did very well. It was mostly served in Black neighborhoods because this was during segregation. Over time, hot chicken became a very important part of Nashville culture. There are now festivals and competitions all over the city that honor this delicious food.
Where did Dave’s hot chicken come from?
Dave’s Hot Chicken did not originate in Nashville, but it mastered the formula for viral growth. The franchise was founded by Armenian-American chef Dave Kopushyan along with his childhood friends Arman Oganesyan, Tommy Rubenyan and Gary Rubenyan. Dave’s started with humble beginnings.
Does Hattie B’s have hot chicken?
In addition, an honorable mention should go to Hattie B’s – a restaurant chain specializing in Nashville-style hot chicken. Though it hasn’t franchised or grown as quickly, it is often compared to Dave’s and has 13 locations, mostly in the South, and continues to grow steadily.
Who is the owner of Houston’s hot chicken?
Houston’s Hot Chicken was co-founded by Edmond Barseghian and Houston Crosta. Barseghian, also a social media influencer, initially developed the hot chicken recipe and spearheaded the brand’s early growth, including its social media presence.
What restaurant does Houston Crosta own?
Houston’s Hot Chicken co-founders Edmond Barseghian and Houston Crosta may be young—both are in their early 30s—but they already helm one of the …Aug 25, 2022
Who owns the hot chicken franchise?
Dave’s Hot Chicken acquired by Roark Capital Dave’s Hot Chicken acquired by Roark Capital. Dave’s Hot Chicken announced on Monday that it has been acquired by Roark Capital, as was rumored earlier this year, at a $1 billion valuation.
Is Houston’s hot chicken a franchise?
They began offering franchises on January 19, 2022. The total investment necessary to begin operation of a Houston’s Hot Chicken® restaurant is between $529,450 to $1,021,000.