Costing Less with Smart FP&A Moves at Dave’s Hot Chicken

June 2, 2025

By: Jarred Liscio

Manager, Advisory

The Wall Street Journal recently spotlighted how Dave’s Hot Chicken, a rapidly growing fast-food chain, navigated the challenge of soaring wages in California to maintain profitability. With over a quarter of its 270 locations in the state, the chain faced remarkable pressure when preparing for minimum wage increases in April 2024.

However, instead of being blindsided, Dave’s management took proactive measures, convening meetings with franchisees to chart a path forward that would mitigate costs while protecting profitability.

This success story underscores a robust Financial Planning and Analysis (FP&A) team’s vital role in empowering businesses to make strategic, data-driven decisions and remain agile despite significant challenges.

Tackling Cost Increases with Strategic Insights

Confronting rising labor costs requires carefully assessing how proposed strategies and investments influence a company’s bottom line. For Dave’s Hot Chicken, FP&A professionals became key players in identifying and evaluating initiatives that could offset wage increases. By analyzing tactical shifts and forecasting outcomes, the FP&A team provided solutions poised to reduce costs, streamline operations, and potentially unlock additional revenue streams.

Three noteworthy interventions drove the company’s success:

Installing Automated Dishwashers

The FP&A team identified opportunities to automate labor-intensive processes, beginning with dishwashing. Transitioning from hand washing to automated dishwashers reduced the time and personnel required for this task.

Implementing a Grease Siphoning System

Similarly, installing grease siphoning systems simplified the cumbersome process of handling 35-pound oil drums. This innovation saved time and enhanced employee safety and operational efficiency.

Introducing Self-Ordering Kiosks

Self-ordering kiosks, initially a point of hesitation for management due to concerns over impersonal customer service, turned out to be a game-changer. The user-friendly interface enabled upselling opportunities by encouraging customers to add high-margin items like drinks and bundles. This innovation increased sales while optimizing labor allocation.

Balancing Costs with Benefits

While these initiatives aimed to reduce labor intensity and boost efficiency, they came at a cost. Industrial dishwashers and grease siphoning systems required significant capital investment and ongoing maintenance. Each self-ordering kiosk costs over $5,000 per location, plus monthly service fees. Dave’s FP&A team’s challenge was determining whether the cost savings, increased sales, and improved employee allocation justified these expenses.

By meticulously assessing the impact of these measures, the FP&A team ensured that the initiatives delivered tangible value. Their analysis paved the way for increased location profits, with stores averaging a $6,000 boost in profit even amid wage hikes.

The Risks of Poor Evaluation

Dave’s Hot Chicken’s success highlights the importance of thorough evaluation before committing to new initiatives. Without careful vetting, businesses risk costly missteps, such as investing in technology that fails to deliver promised savings or value. For example, spending on machines that don’t significantly improve efficiency could leave a company grappling with sunk costs and diminishing profitability.

The story serves as a powerful reminder of the consequences of insufficient analysis. Conversely, when FP&A experts collaborate effectively with management, they bring unparalleled value by guiding organizations toward smart, strategic decisions.

Lessons in Agility and Proactiveness

Dave’s Hot Chicken has set a clear example for businesses navigating economic pressures. Its proactive measures reflect a best practice applicable across industries. To stay competitive and adaptable, businesses should proactively anticipate potential challenges and develop actionable plans to address them.

Many organizations today face looming uncertainties, such as trade policy shifts or regulatory changes, that could impact costs and operations. Proactively engaging an FP&A team to analyze risks and identify opportunities allows companies to respond nimbly to unforeseen circumstances.

Partner with Experts to Stay Ahead

At Wiss, our FP&A professionals excel in identifying risks and opportunities while offering tailored analyses to help businesses remain resilient in a changing landscape. Whether it’s planning for cost increases or streamlining operations, our experts partner with you to ensure that your business is both nimble and equipped to thrive.

Learn how the Wiss FP&A team can empower your company to succeed in uncertain times. Contact us today to begin crafting a strategy that works for your business.