Fried chicken restaurants were the leading fast-food subsection in 2025 with consumer traffic rising 3% in the year ending 2025, while all other concepts declined by 1% compared to the previous year, according to market research firm Circana.
In addition to traditional popular fried chicken restaurants, such as KFC, Popeyes, Chick-fil-A, and Raising Cane’s, the sector has seen a rise in popularity in the hot chicken market, which has been growing since the launch of Hattie B’s Hot Chicken chain in 2012, which has 22 locations in six states and Dave’s Hot Chicken in 2017, which has over 300 units nationwide.
The hot chicken style features different levels of taste. Hattie B’s has six levels: Southern, Mild, Medium, Hot, Damn Hot, and Shut the Cluck Up!!! Dave’s Hot Chicken offers seven levels of heat: No Spice, Lite Mild, Mild, Medium, Hot, Extra Hot, and Reaper.
Despite the rising popularity of hot chicken, certain restaurant franchisees can encounter some business issues that require them to file for bankruptcy protection until they resolve their situation.
Dave’s Hot Chicken franchisee bankruptcy
Dave’s Hot Chicken franchisee TIG Reaper LLC, which operates locations in Pennsylvania, filed for Chapter 11 bankruptcy, facing a lawsuit filed against it by Bank Midwest, a division of NBH Bank. The Dave’s Hot Chicken franchisor has not filed for bankruptcy.
The Langhorne, Pa.-based franchisee and operator of Dave’s Hot Chicken restaurants filed its petition in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on Sept. 21, 2026, listing $10 million to $50 million in assets and liabilities, according to Bondoro.
The debtor will have funds available to distribute to unsecured creditors, according to court papers.
TIG Reaper operates franchises at 9113 Roosevelt Blvd. in Philadelphia and 122 Park Ave. in Willow Grove, Pa., according to Franchise Fast Track.
Bank files complaint against franchisee
The debtor filed its petition after Bank Midwest filed a complaint against it on Sept. 8 in the U.S. District Court for the Eastern District of Pennsylvania, alleging TIG Reaper may have not met certain debt obligations, according to Class Action Daily.
The debtor filed an adversary complaint against Bank Midwest, which was listed in its bankruptcy case on Sept. 21, according to Pacer Monitor. All litigation against the debtor is subject to an automatic stay while the bankruptcy case proceeds.
Chains plan 750 new locations
The fried chicken sector has been in a significant expansion mode in 2026, as chains, such as Wingstop, Raising Caine’s, Slim Chickens and Dave’s Hot Chicken collectively are planning to open more than 750 new locations by the end of 2026, according to QSR.Pro.
Dave’s Hot Chicken is planning 140 new restaurant locations in 2026, with a $1.6 billion sales target, an increase of $400 million from 2025.
Dave’s launched business in parking lot
Dave’s Hot Chicken, which operates over 300 locations, began gaining popularity after four friends with $900 launched the brand with a pop-up chicken stand in a parking lot in East Hollywood, Calif., in 2017.
Dave’s Hot Chicken was later sold to Roark Capital in June 2025 for $1 billion, Restaurant Business Magazine reported at the time.
Related: Another barbecue chain closes restaurants as rivals hit bankruptcy
