Dave’s Hot Chicken & The Reconciliation Bill’s Next Stop 6/2/25
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Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. In the U.S. Senate, it's go time on the big, beautiful bill. Oklahoma Republican Mark Wayne Mullen on this massive reconciliation package heading his chamber's way. We're not going to tear down the frame of the House bill. We're going to maybe repaint the interior walls and redecorate a few rooms. But overall, the bill and the structure of the bill is going to stay intact.

And Dave's Hot Chicken has a winning recipe for private equity. Dave's CEO Bill Phelps recounts the chain's journey from folding tables to a billion-dollar deal. We timed it really well. The product is insane. But then we have a team that built these other businesses, Wetzel's Pretzels and Blaze Pizza, and we have built a great team. And then the franchisees are just phenomenal.

Plus, Monday morning tariff policy. Our Rick Santelli gets a starring turn in the Oval Office. When we do the data, we do it straight. The numbers are the numbers. And when hot-button issues of campus speech hit graduation day. This is where it gets very interesting. Hit the road, Jack. Don't you come back. No more, no more, no more. It's Monday, June 2nd, 2025. Squawk Pod begins right now. Stand back, you buy in 3, 2, 1, cue, please.

Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. Happy Monday. Several developments on the tariff and trade front, China refuting Washington's claims that it violated an agreement that was negotiated last month in Geneva, Switzerland, instead now accusing the U.S. of breaching the terms of the deal. The Chinese Commerce Ministry spokesperson saying that the U.S. export restrictions on software, uh,

increased and that the U.S. announcing it would revoke Chinese student visas both undermine the deal. This follows President Trump's social media post last Friday, which he accused China of violating the agreement with the U.S. And we talked to Jameson Greer about what exactly that meant. Speaking yesterday on ABC News, National Economic Council Director Kevin Hassett suggested that President Trump and Chinese President Xi

could speak soon about a trade deal as soon as this week, potentially, though no specific date has been set. I think this is...

This next story is one of the reasons the markets aren't too happy, because, you know, are we de-escalating or are we escalating? President Trump weighing in on tariffs over the weekend, saying in a post on Truth Social yesterday afternoon, if the courts somehow rule against us on tariffs, which is not expected, that would allow other countries to hold our nation hostage with their anti-American tariffs that they would use against us. This would mean

the economic ruination of the United States as follows the ruling last Wednesday from the U.S. Court of International Trade that blocked the president's tariffs. The Federal Appeals Court stayed that, reinstated the most sweeping terms a day later with a stay. And we were sort of grasping at whether there was executive power precedent for using tariffs. And there definitely is. And if you're interested,

I'm working through this now. I haven't had a chance to read all of it yet. But a gentleman that used to be on the US Court of International Trade says where that decision went wrong and that there is ample precedent for using presidential powers, emergency powers, to address trade imbalances. But I guess what's the emergency? Is it fentanyl? Is it something else? No, just using trade deficit itself. Yeah, just using it, which was weird because it went to $80.

last Friday, which was crazy. And I don't know if that lasts, but I thought it was going to be the month where everyone was one more, getting as much stuff as they could before the tariffs went in. So it was very odd. The numbers were weird on Friday. They were too good. Personal income was way up.

Personal income in part was because of a Social Security adjustment, a one-time Social Security adjustment. Okay, I want to know all those details. I actually went to Perplexity and Grok to try and figure out some of the reasons on some of those numbers. Which works all the time now. Now, the market didn't go up based on all those great numbers, really. And then today it's down.

I think you're right, the de-escalation factor. Yeah, it's going back on with the steel tariffs and doubling those. But Waller, one of the Fed guys, is saying, and then I had to realize it's June, he was saying,

Some of those numbers open the path for multiple rate cuts this year. On the inflation front. He said these would be the potential for what he called good rate cuts, which is the opposite of bad rate cuts, which is because of a slowing economy. Right. If the economy drops, that's terrible. That's not why we want to see rate cuts. If you can cut rates because the inflation numbers are better than expected, that's a different story. But I thought it was weird if, you know, and Jay Powell.

getting yelled at or at least there was a discussion last week and the with with trump about it again and then waller comes out do they coordinate things i don't know if they coordinate things but but now saying that if inflation was

Oh, was was cooler than expected. Multiple rate cuts. It's already June. How would that when you'd be that would be the next time and the time after. And well, there's a lot of questions whether they would start before September because the you know, you either cut by July or there's the August. There's not the meeting. So it would have to happen pretty quickly. Or you're talking about consecutive ones at the end of the year.

There is some additional news on tariffs this morning as well. The European Commission saying that it is prepared to retaliate against President Trump's plans to double tariffs on steel and aluminum imported into the U.S. The commission said that the move from the White House, in their words, undermines ongoing efforts to reach a negotiated solution.

President Trump announced those heightened tariffs on Friday just outside of Pittsburgh, where he was taking up a nearly $15 billion deal, talking up that deal between U.S. Steel and Japan's Nippon Steel. House Speaker Mike Johnson tried to address concerns among some of his Republican colleagues that President Trump's tax and spending bill will add to the U.S. debt. Johnson spoke on Meet the Press yesterday. He called himself a fiscal hawk.

Mr. Speaker, if the big, beautiful bill does add to the debt, will President Trump own that? It's not going to add to the debt. Mr. Speaker, the Joint Committee on Taxation, the Committee for a Responsible Federal Budget, the Tax Foundation, the Penn Wharton budget model all say this will add trillions of dollars to the deficit. Are you really telling the American people this will not add one penny to the debt and deficit? You can guarantee that? I...

I am telling you, this is going to reduce the deficit. Johnson also trying to calm fears that President Trump's bill would hurt Medicaid, saying the legislation contains no cuts and would actually strengthen the program, which I thought was a bit surprising. Just a cut in the growth. That's been that way all along, but not enough. I still don't think it does nearly enough.

And troubling, this was an attack in Boulder, which I know so well, Boulder, Colorado, being investigated as an act of terrorism. Officials say a man shouted, free Palestine, and used a makeshift flamethrower to attack a group of peaceful protesters that were marching to bring awareness of Israeli hostages still held by Hamas. The suspect was taken into custody at the scene. Officials say he's an Egyptian national.

who at least it looks like acted alone. Six people who were at or near the demonstration were injured. At least one is in a critical condition, but fortunately no lives were lost at this point. We're going to talk about MIT? Hated that. Hated it. Yeah. What am I going to do? Well, do you think that MIT gets money from the government? Do you think that the government should go after your alma mater?

It's sort of not a total. Is it the graduate degree? Do I still call it that? Colorado is my alma mater. You've been talking about MIT for a very long time. No, I talk about Colorado all the time, how it turned me into what I am from, because it was so crazy in the late '70s. It was so, it was just like it is now. So you have no view on MIT. Just like it is now.

about whether they should give money or not. The valedictorian gives an entire speech about free Palestine. I'm still with, did you see what I said? And I thought that the president who came after her did not do anything. I thought, I didn't even understand what was happening. You sent that to me. In response to you sending that to me, you saw what I sent back to you. Or did you not read it? Maybe you didn't read it. I think I read your texts.

It will never not be fascinating how Western progressives were intellectually captured en masse at the time by an imperialistic Islamic movement which stands opposed to every progressive value they espouse. That's what I'm saying. They got to do that to MIT. Go for it. I don't have any elite. You're saying go for it. Absolutely. What would you do to them? I'd pull another Harvard on MIT. They're right next to each other. Might as well. I would.

Unless they're willing to really open up in terms of... What would you do to her? To the valedictorian? Yeah. Well, I mean, she's allowed to say what she wants to say. Well, so that's very interesting. I actually agree with you. I think she is allowed to say what she wants to say. It's just we've got to try to find the root cause of what I think is an outrageous...

to come to that conclusion, given what we saw on October 7th. And if that's what you finally arrive at, something's wrong. OK, do you think nobody should employ her? Well, that's a that's a you know, that's up to the obviously that's up to the corporations can do whatever. No, I know. But I'm saying now that she's done this publicly and you have a view that you and this is no, this is where it gets very interesting. OK, somebody said she comes in here and Ann tells me, look, we got a new application for someone to be a news associate. You would say no way. Say no.

Is that okay? Yeah, no, it is okay. I'm just curious how you think about it. Hit the road, Jack. Don't you come back. No more, no more, no more. I mention that because her LinkedIn page or one of these pages, I don't know. It says Squawk Box? No, but was being passed around online, I think, in the context of, I don't know if it was LinkedIn page, I think it was some other kind of profile page that seemed to be passed around in the context of jobs. You saw Scott Pelley. I mean,

If I had someone start giving a commencement, I'd walk out. I'd walk out and just say... By the way, no, no, I will say this. You can disagree with me. I do. If you're going to say something positive about that. About Scott Pelley? I will. Because I think that Scott Pelley... He's up below hard. He's always been such a progressive... Oh, God.

Well, no, I think that he is doing something very important, speaking out at a time when most people will not about our industry. 60 Minutes is the reason that the mainstream media is in the position they are right now with about 5 percent approval because of the slanted, ridiculous bias that was so pervasive at 60 Minutes for years and years and years. Oh, my God. You were fine. You were fine with lap.

and all this other stuff that was happening. We were going to have a ministry of disinformation, just like 1984. They had it ready to go. It was ready to go. And thank God that woman never got that job. But they were ready after telling Facebook you can't put that. We're not in a commercial break. Why don't we talk about this afterwards? God bless you, Scott. Oh, my God. My hair is on fire. Thank you, Scott. Throw Leslie Stahl in there, too. Oh, my.

Tease will be next.

Coming up, Senator Mark Wayne Mullen is the liaison between the White House, the Senate, and the House of Representatives for this reconciliation bill we keep talking about. And the Senate dives in this week. He is confident in the bones of the bill so far, even if Elon Musk isn't. It's extremely frustrating when you see something that's so black and white in front of you and you can't fix it. And Elon's coming from a business perspective in which we need, but unfortunately, Congress doesn't always work like a business.

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Citizens, since we each upgraded to Xfinity in our homes, the Wi-Fi has been booming. It's fair to say our town has officially become a boomtown. Mayor, will I be able to drop into multiplayer gaming battles with low lag? The lag won't be an issue, but your questionable skills may be. And what if I have hundreds of devices on the Wi-Fi? Purely hypothetical. Seems like a lot, but sure. Hundreds of devices all booming together with the Xfinity Gateway.

Yes, friends and neighbors, with Xfinity, the Wi-Fi is booming. Restrictions apply. This is Squawk Pod. Standby, Joe. Here's Mike. In case you missed it, President Trump reacting to Friday's economic data, reacted by playing a clip from this show in the Oval Office. Numbers have just come out which are rather extraordinary, and I thought I'd play a tape of one of the people who I've respected over the years.

from Joe Kiernan and Rick Santelli. This just came out and we'll just play that for a second. Personal income is up eight tenths, up eight tenths of a percent. That is almost triple the expectations. The income, the income numbers really for the first four months of the year, they're stellar. To cut it in half.

That's crazy. So there wasn't a lot of front-loading of things that they needed before the tariffs hit? Yeah, I'll tell you what, it really does call into question some of the conventional wisdoms. Not bad. Not bad. Come on, guys.

Rick Santelli joins us now. You got to at least you got to hand it to me. He knew all the mainstream media cameras. He had them like all held hostage. And if they weren't going to talk about those numbers, it was surreal. Was it not that the cabinet was surrounding him? And for for about two minutes, people were just listening mostly to you just talk about those numbers. It was a little bit weird. You heard. Did anyone see that you heard from some people, I guess.

Yeah, I did. I heard from some people, but that's the first time I've seen at least that portion of the clip. I've only seen bits and pieces. But listen, the data is the data, Joe. And the one thing that I'm always very happy about when you and I and Becky and Andrew are together in the mornings is that when we do the data, we do it straight. The numbers are the numbers. I'm a quant guy, okay? I quote numbers.

up 0.8% triple expectations. These are hard to argue with. And when I go back in time, when was the last time we were at these levels? Or how did they stack up next to expectations? We try to bring the audience an unvarnished, unpoliticized view of what's going on. And there are some positive things going on within the economy. Many were calling for recession.

And you know what, Joe? Jamie Dimon now has been talking about debt. That's a good thing. I mean, you know, maybe his alarm clock was a little slow and going off. This has been developing for years, if not decades. And the current plan in place that you've been discussing, you know, it adds, what, $2.73 trillion over 10 years. Not good. But

But it really isn't changing the trajectory that's taking us into the 50s and potentially $60 trillion deficit areas. Those are baseline numbers that changed in 2020. Okay? So everybody who's now talking about avoiding long bonds and

Oh, my God, look at what's going on with the debt. You know, this has been developing for a long time. But I welcome, and I'm sure you do too, Joe, everybody jumping in here. I think that's part... I mean, I think he ran it for a reason, too, that...

I mean, maybe there's other networks that maybe don't have the same amount of, you know, it is going to be straight when we give it. Here's the thing, though. The market didn't, you would have thought that, and I asked you about that trade deficit number, which was crazy to be cut in half. The markets did not go up on Friday. Now they've been going up a lot. Today, there's no really upward momentum. So as good as they were, it's

It's not in the markets yet. And I'm still thinking that people think it's a stop along the way and that maybe we'll get something on Friday that gives us an idea that maybe there is something

There are some headwinds from a lot of these policies or maybe not. And then I also wanted to ask you about Waller, because it seems like Waller might have been listening to some of your some of us talk about inflation. You never want to cut rates. He said that there's cut rates. Why wouldn't you want to cut rates at this point for good reasons if inflation was low?

No, I find it very difficult to disagree with that. However, however, having said that, I don't have an issue with the Fed being stingy with the eases. But I do believe things are now in place that they are closer to doing it.

I would offer a couple of issues that we need to take care of at some point. You know, some of these subsidies that are in these bills or this bill talking about, for example, you and I and taxpayers subsidizing EVs to the tune of 7,500. There's a lot. There's salt. You know, Joe, salt really gets me. And I know that maybe you have different feelings than I do. I get ensnared by this. I don't want any caps.

You don't even know the 30, right.

Or leave it the way it is. I don't mind paying my fair share, okay? I think some of these states, like Illinois, where I live, like New Jersey, like New York, if we allow this SALT issue to go from $10,000 to $40,000 or $50,000, even with the income caveats, that just keeps the cycle of high-tax states continually doing that, and I'm not sure that's a good thing. But in the end, listen, I thought that clip was really fun,

I enjoyed the attention, obviously, but the attention I enjoyed is that you want to know what's going on in the economy. Tune in to CNBC. Right. That's what I took from it, too. It's credible. I mean, you can run people that, you know, somewhere else, every single thing Trump has ever done is like the greatest thing in the world. We know who we're talking about. And that's not what you get. So when it really does come something like that, you know, it's credible. Thanks, Rick. Appreciate it.

The Senate's getting ready to take on the House-passed big, beautiful reconciliation bill, but people are saying there might be a fight ahead within.

the Republican Party and within between the Senate and the House. Join us now, Republican Senator Mark Wayne Mullen. He's the liaison for the reconciliation bill between the Senate, the House and the White House. I think of all the different dynamics, Senator, it's good to have you on. You know, you guys you guys get six years. Those guys, those poor souls in the House, man, the minute they get in.

Election season starts for the next two years. And that's why it just seems so maybe our forefathers were smart. It's really hard to get anything done, isn't it?

Well, that's how our Federalist Papers are wrote. If you read them, they wanted Congress to work slow. So negotiations is part of it. I mean, we're gonna bicker back and forth. Both chambers work differently. I have a love hate relationship with the House because I absolutely loved my time in the House. But man, it was so frustrating too, because you're right, Joe, as soon as you finish

winning your election, you start running again. So it's kind of always on your mind, especially when you're negotiating one big, beautiful bill that isn't going to be perfect, but it's going to be good. Exactly. I don't know how many times I've used that expression, the good for the don't sacrifice it, trying to be perfect. But what are your colleagues, the ones that

will be in the decision-making process on this. And is it going to be fast? Is it going to be July when it happens? And what are the people that you respect there? Not everyone's like Rand Paul, I don't think. But there's people like Ron Johnson and others. How much are they going to ask for in terms of additional cuts?

Well, all of us are going to shoot for the moon, right? We want the bill to be as good as possible. But truth is, we've been negotiating this since November. At the end of the day, everybody's idea is going to be considered. But it's your idea. So since it's your ideas, every member knows it's your job to to get the votes for it. So Ron John or Rand Paul or

Mike Lee or Lindsey Graham or whoever else you want to put out there, their deal is they have to find 51 votes for their idea. If not, then we've got to move on. So everybody's going to have their fingerprints on it. Everybody's going to be working together. They're just two hard stops that we really can't mess with.

And that we can't go below $1.6 trillion in cuts. In fact, Leader Thune says he wants to actually do better than 1.6 trillion. So that's actually more deficit spending cuts than what the House did. And we can't really touch SALT, even though in the Senate, we really don't have any SALT members in the Senate on the Republican side. But we also know that's very important to the majority makers in the House. And that was a sticking point, hard point to get over.

Other than that, we're going to, as I say, we're not going to tear down the frame of the House bill. We're going to maybe repaint the interior walls and redecorate a few rooms. But overall, the bill and the structure of the bill is going to stay intact. We're just negotiating with them right now. In fact, I was just texting Speaker Johnson before we went on the air here.

In terms of that, you mean you're basically going to do what they want, which is to not touch it significantly enough that it has to go back through a vote in the House? No, it'll have to go back for a vote because we're going to leave the frame of it together, but we're going to have to, I mean, if we change the bill at all, it's got to go back for a vote. So we're going to amend the bill. We're just going to take our amendments and put on top of it. There was some talk about some people in the Senate that literally wanted to shelf their bill and

and try to rewrite a different bill. There's no way to do that by July 4th. Leader Thune has made it very clear we want to have this done by July 4th. We will deliver for what he wants to get done. There's going to be a lot of negotiations. I was on the phone with the president this weekend

about making sure we're in lockstep with the White House and with the House and with the Senate. But we're going to have to do some amendments. There are some things in this that, you know, aren't going to make the bird rules. I like to say the birdbath because it's going through the scrubbing right now. Once it gets done with the birdbath, then it's going to look different anyways. And then we've got to then we've got to put our own personal touch on it. Every senator, just like every House member, has has ideas. Where is it going to be?

Does the Senate want to actually deal more with the abuses that are with the way Medicaid is set up right now? And is that where the problem is in the House? You've got some members that are worried they might be in more blue areas where the president didn't do quite as well. Will they not be on board with some actual real reform of Medicaid if you do that? Is that where you'd lose them?

No, I mean, you have Susan Collins, who's in a very unique situation in Maine. I say this all the time. She's the only Republican that can carry Maine. I mean, she doesn't vote with us all the time, but she votes with us a heck of a lot more than if we had a Democrat senator up there.

And so we've got to give her a little bit of leeway. We have Lisa that's got a little bit of leeway that she's got to work with. Dan Sullivan, Medicaid is a huge issue in Alaska. Josh Hawley in Missouri has made this very clear about him with Medicaid. So you've got the same problems. You've got the same problems. And then you go back to the house where you've got the same. But then you've got guys like...

You know, Chip Roy on the other side. It's tough to watch. And you know, Senator Ron John is a surf shop, so I don't think you can use that for Ron Johnson. Right.

Right. But, you know, Medicaid, though, there's a lot of confusion that the Democrats have lied about. They went out there, Joe, and said that, you know, we're cutting Medicaid benefits. We're not cutting Medicaid benefits. No one believes that. No one serious believes that. Senator, how much do you focus on what might be described as the bond vigilantes, this idea that the bond market –

is a little nervous, maybe a lot nervous about what this bill may do to the long run fiscal situation and economic situation in the country longer term. - Well, speculation is what always drives the market. We know this. And in fact, I think the bond market is gonna respond well once this bill's passed.

because it brings certainty, right? It brings certainty to the tax code. It's gonna bring certainty that we're gonna be getting our physical house in order. It brings certainty to some regulatory environments. It understands that we're getting away from the,

you know, from the big government, less business friendly environment of the Biden administration and moving to the Trump era administration where it says, hey, United States is open for business again. But it's and we want your business to come back on. But it's not balancing the budget. It's it's it's continuing to push out. If the bond market didn't go to eight percent on Biden, it's not going to go up on this. And no one's freaking out. I don't think basis points you're talking about is a freak out. That's not a freak out. But yeah.

I don't think. I don't think. I am a Joe. Yeah, I don't really think that...

THAT'S WHAT WE'RE GOING TO DO HERE IN TODAY'S BILL IS GOING TO BALANCE THE BUDGET BUT IT WILL TOMORROW'S BILL MEANING THAT BECAUSE WE'RE CUTTING DEFICIT SPENDING, WE'RE GOING TO BRING SURETY BACK TO THE MARKET. WE ALREADY SEE NUMBERS OF THE ECONOMY EXTREMELY IMPRESSIVE. WE SEE INFLATION DOWN. WE'RE GOING TO SEE OUR GDP CONTINUE TO GROW AND EVENTUALLY AS YOU GUYS KNOW THESE CHARGES WE CONTINUE TO CUT BECAUSE WE'LL CUT MORE THROUGH DISCRETIONARY SPENDING TOO.

You know, we got mandatory spending cuts. We got discretionary spending cuts that's going to go in. We're going to have GDP growth. And I feel like I honestly do feel like we're going to be able to balance a budget for the first time since Clinton was in office. And I think we can do it in about a year and a half. What do you make of the comments that Elon Musk has made about the bill then? He's been a big proponent of the president, but he's critical of this bill.

Yeah, well, Elon is an extremely smart guy. I consider him a friend, someone that I actually spoke to through text over the weekend. He's got a lot of great ideas, but he's just as frustrated as I was when I first came in Congress because every business person wants things to move faster and they see a problem, they want it to be fixed like you would when you go to your board meeting. The problem is, is that we have...

535 CEOs that's on the board and everybody's got their own ideas. And when you do that, you don't get a bit, you don't get the best decision because everybody's looking out for their state, which they should understand that. And so the negotiations aren't the way that we would like it to, to, to come out. I tell everybody the biggest lesson I learned from being in the private sector to come into the, to the public sector is how to take a deep breath.

because it's extremely frustrating when you see something that's so black and white in front of you and you can't fix it. And Elon's coming from a business perspective, and which we need, but unfortunately, Congress doesn't always work like a business. I mean, there was enough worry about just extending the 2017 cuts. And then, you know, then the president layered on all these other things that were really populist in nature. And I think the president actually considered maybe some revenue cuts

to Andrew's point. And, you know, instead of just putting all your chips on growth and trying to say that's all we're going to do, I think, you know, he probably even considered raising that top rate, remember, on people who make more than $2.5 million or combined $5 million. I mean...

So the Republicans know that that there are deficit concerns and they don't want to be the same as Democrats. And it seems like we always the Republicans always end up being tarred with that same brush as far to be as far as being deficit busters.

Yeah. And let me tell you, the president has been engaged in this at like a true leader. I mean, he's leading from front every single week, almost daily. We're in communication with the White House. And I'm not talking about just a few people in the White House. I'm talking about from the cabinet all the way to the president. He has been making it very clear that everything was on the table. He's willing to negotiate. He's willing to make a deal.

One thing he did not want to do was, was raise corporate taxes though. He was dead set. We can't do that when the average developed world is at 15% and we're already at 21%. Yeah. Well, raising the top rate would have raised it on a lot of small businesses. Small businesses like LLCs and S-corp. Yeah, exactly. You're right. So, but he was willing to discuss what we needed to do. But at the same time, he was very, we were very confident we weren't, we were going to make our tax,

policies permanent and not allow them to go up on a single person. Okay. All right, Senator. I'm always gentle with you. I get scared because I don't want you coming on the set and pushing me around or something. I appreciate you being nice to me. I've seen the way you're a tough guy. I've seen people wilt in your face.

Good to have you on. Thank you. I know you're a pussycat. I'm kidding. Just referencing that one. I know. I know. You remember. Thank you, sir. Yes, sir. You'll be remembered for that forever. Thank you. All right. See you later. And you're friends now. That's the classic. We are. Sean and I are friends. Yeah.

Next on Squawk Pod, it's a hot chicken chain backed by Drake and Samuel L. Jackson, now part of the Auntie Anne's and Subway family. Dave's hot chicken CEO Bill Phelps on the road from parking lot chicken pop-up to a Rourke Capital deal. And from 2019 to now, a billion dollars. It's insane. It's insane what we did. Tuck in right after this break.

Citizens, since we each upgraded to Xfinity in our homes, the Wi-Fi has been booming. It's fair to say our town has officially become a boomtown. Mayor, will I be able to drop into multiplayer gaming battles with low lag? The lag won't be an issue, but your questionable skills may be. And what if I have hundreds of devices on the Wi-Fi? Purely hypothetical. Seems like a lot, but sure. Hundreds of devices all booming together with the Xfinity Gateway.

Yes, friends and neighbors, with Xfinity, the Wi-Fi is booming. Restrictions apply. At LinkedIn, we know hiring is a big deal for your small business. Sometimes it can feel a little... Ah! ...overwhelming. LinkedIn uses data that you can't find anywhere else to give you the best candidates, all so you can feel confident you're hiring the best person for the job. And even a little...

Welcome back to Squawk Pod. Up in Andrew, Q.

watching squawk box right here on cnbc i'm andrew ross sorkin along with joe kernan and becky quick private equity firm rourke acquiring fast casual chain dave's hot chicken in a billion dollar deal at least that's what's been reported the company started in a parking lot about eight years ago it's had a remarkable rise and joining us right now to talk about it is bill phelps he is the ceo of dave's hot chicken and let's talk a little bit about how this all has come through um

i i this is crazy this started in a parking lot in 2017. give us the back story oh it's a crazy story there were three kids that wanted to support their parents and so they only had 900 in savings so they took it and they took portable flyers and and heat lamps and eagle coolers did a pop-up in a parking lot east hollywood uh they got a write-up from a writer uh

of eater la and he said late night chicken stand might blow your mind and they showed up to work and they had a line three blocks long and my son went down and saw them in the parking lot said go look at this dad and and now how many stores are there there's 310 restaurants open and we've got we've sold the rights to about 1100 restaurants as a franchise operation right right um

What's special about this? Because hot chicken is kind of all the rage these days. Totally the rage. We timed it really well. The product is insane. But then we have a team that built these other businesses, Wetzel's Pretzels and Blaze Pizza, and we have built a great team. And then the franchisees are just phenomenal. And the franchisees have done an incredible job building restaurants really, really fast. Is that number that was reported correct, the $1 billion deal? It's pretty close. It is pretty close.

I mean, that to me is the phenomenal rise of this. You got involved in, what year was it? I got involved in 19. 19, so two years after they popped up as just guys standing out there with their folding tables in a parking lot. And from 2019 to now...

a billion dollars it's insane it's insane what we did but it's about them the division of these guys was just great arman oganesian was the founder high school dropout but a marketing genius and he created all of this in his head which is just kind of so tell us what do you think the marketing piece of it was that made it work and also

Behind the scenes there was a scaling piece to this. The actual scaling of a franchise this big. Right. Well, he was the marketing genius that saw this and he connected. He was a stand-up comedian and he connected with young people and he made it really fun and really exciting and he put all this together in his mind and he foresaw all of this stuff.

And then we took people that have done this before and we knew how to scale businesses really fast and we had great franchisees and so we all worked together. And it became- Had most of the franchisees done this before?

All of the franchisees had been in other restaurants. You had to be a franchisee that owned other restaurant stores before. Like a Wetzel's Pretzel or Blaze or whatever. Or Blaze Pizza or a Dunkin' or whatever. So, I mean, I think that's kind of the genius of it. Can I ask what you paid for at any point in time? Like when you came along with this, to turn it into a billion dollars, basically without a whole lot of capital going into it.

We only put in like $2 million. That's the beauty of franchising. Yes, yes. A movie producer, John Davis, brought me along. I worked with him and other businesses. And we brought in Drake and we brought in Samuel L. Jackson as investors. And it just made it really fun. Well, how did you target them? Were they people who had showed up on the scene for some of these things? Yes.

Organically? Well, through the connections we had with John Davis and other people, we had people interested in our brand because we'd done so well on Wetzel's and Blaze. They said, let's do this again. How many Wetzel's are there right now? How many Blaze pizzas are there? Because I see them everywhere.

Yeah, the Wetzel's, there's over 400. And Wetzel's was, we struggled. Rick Wetzel and I struggled. And then Wetzel's has skyrocketed in the past few years. It's just an iconic brand. And Blaze Pizza has about 300 restaurants. And these are, I mean, the restaurants for Dave's Hot Chicken is mostly in California at this point. No, we're across the country now. We're across the country. We're in Canada. We're in the Middle East and Dubai, California.

And we're in London, and we have a killer store in London. It's kind of crazy.

What's the best performing store in the world? I think the store in London is the best performing store. And the great story there was the guy that wanted to be the franchisee told his son about it. And his son goes, I love Dave's Hot Chicken. He goes, there's not one within 6,000 miles. How do you love it? He goes, it's online. It's Instagram and TikTok. And that's what the young kids are looking at. And is that the secret to all of this these days? Yeah.

armin the founder was a marketing genius and he's the one that created the interest through instagram and tick tock and that's what built the brand okay so if that's the case though creates a question about whether these things are fads

Right. And what do you have to do to stay out of being a fashion and be into sort of the permanence of the culture? Well, you have to deliver an amazing product, which we do every day. And our Yelp and Google scores from the guests are like off the charts. And that's the base thing. You have to have a great product and then you have to deliver great value to the consumer. And that's what we're doing. And the business just keeps getting better.

It doesn't look like a fad at all. But in terms of keeping people excited on social media, that's why I ask, because people are always looking for the, on social, everyone's looking for the next thing. Right, right. And we do that. So we do Dave's Not Chicken, which is a cauliflower chicken, which is a cauliflower product. We do mini sliders and things like that. You're expanding the menu. Yes, and make it really fun. So you're constantly changing the menu. A little bit. We're adding little items on an in and out basis, and it makes it really interesting.

Let me ask you, are you a good gauge of consumer sentiment or because the brands are viral and hot, is it a reflection of what's actually happening? I don't know that we're a gauge. I don't know if we're a gauge. This is a unicorn. This is a unicorn. This is a crazy. It may not show you what's really happening on the broader consumer pictures. It's pretty amazing. But we have an incredible group of employees. We made 19 people millionaires in the last two weeks. So that's really fun. Impressive.

Bill, thank you. We love your enthusiasm. We love how you're able to pull these brands and pull off such incredible stories. We appreciate you sharing that with us. Thank you. Thank you all. Nice to see you guys again. Nice to see you. Congratulations. Thank you. Big time.

That is Squawk Pod for today. Thanks for starting your week with us. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our TV show right into your ears when you follow Squawk Pod wherever you get your podcasts. And if you've been listening for a while, let us know what you think. We're on X at Squawk CNBC, or please consider rating or reviewing Squawk Pod on Apple Podcasts.

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