Founders Of Fried Chicken Chain Zaxby's Are New Billionaires

Forbes

They met in middle school in Georgia. They’re now both billionaires from Zaxby’s, the fried chicken chain they started together in 1990.  Read the full story on Forbes: https://www.forbes.com/sites/jemimamcevoy/2025/04/01/these-childhood-best-friends-made-billion-dollar-fortunes-from-chicken-fingers/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, these childhood best friends made billion-dollar fortunes from chicken fingers.

00:07Zach McElroy and Tony Townley became best friends in the 7th grade while growing up around Athens, Georgia.

00:14Then, in their late 20s, they decided to go into business together.

00:19The friends each put up $8,000 to open a chicken finger restaurant near the campus of Georgia Southern University,

00:25where Townley had gone to college.

00:26They officially opened the first Zaxby's, or Zax, as it was called then, a play on McElroy's name, in 1990.

00:35More than three decades later, that $16,000 has yielded an unbelievable return.

00:42Townley and McElroy, both now 62 years old, are worth $1.2 billion and $1 billion, respectively, thanks to the success of Zaxby's.

00:52They're both newcomers on this year's World's Billionaires list, which we published at the beginning of April.

00:59The pair join other food entrepreneurs like Chipotle founder Steve Ells, Jersey Mike's founder Peter Cancro,

01:05and Kava chairman Ron Seich, who are also first-timers on the list.

01:10Headquartered in Athens, Zaxby's is beloved for its wide-ranging menu of chicken fingers, spelled ending in a Z, wings, and signature sauces.

01:21The chain recorded some $2.5 billion in system-wide sales in 2023, the latest year data is available, according to restaurant analytics tracker Technomic.

01:31Zaxby's is smaller than competitors such as Atlanta-based Chick-fil-A, which had $21.6 billion in 2023 sales, and Louisiana's Raising Cane's, with $3.7 billion.

01:44It's also more regional. Its 960 stores are spread across just 18 states, mainly in the U.S. southeast.

01:51Townley sold his half of the business to Goldman Sachs for nearly $1 billion in 2020.

01:59As part of the deal, he also received more than 140 Zaxby's franchise locations, making him one of the chain's largest franchisees.

02:08McElroy sold 20% of his stake to Goldman at the same time, but held on to 30%.

02:13He stayed on as CEO until 2022, when he stepped aside for the company's first outside CEO, Bernard Okoka, the former head of El Pollo Loco.

02:24McElroy remains chairman of Zaxby's board.

02:27Townley, meanwhile, no longer has any leadership position at the company.

02:31Of the founder's decision to sell a majority stake to Goldman, McElroy told Forbes,

02:36The decision was so emotional because of the hard work that went into growing Zaxby's from the ground up.

02:50McElroy, who dreamed of becoming a professional drummer, sold his drum set and borrowed off credit cards to get the money for his half of the capital needed to open the first store.

02:59After opening the restaurant, which had a $400 a month lease, he moved into a condemned building across the street to tend to their store.

03:09McElroy recalls, quote,

03:11I was the sole resident in the eight-unit building.

03:15Townley, meanwhile, kept his day job running a mortgaging and loan business he founded in Athens.

03:20He would finish work and then drive over to the store to mix sauces with McElroy, sometimes until 5 a.m.

03:26The pair expanded Zaxby's in the beginning by targeting college campuses like Valdosta State and the University of Alabama, where they opened some of their first locations.

03:37In 1994, they started franchising and changed the restaurant chain's name from Zax, Z-A-X, to Zaxby's.

03:45A decade later, they had 100 locations, according to the Atlanta Journal-Constitution.

03:50They hit $1 billion in revenue in 2013 and surpassed 650 locations the next year.

03:58They continued to add around 40 new stores a year up until the sale to Goldman in 2020, this according to data from Technomic.

04:07For full coverage, check out Jemima McAvoy's piece on Forbes.com.

04:13This is Kieran Meadows from Forbes.

04:16Thanks for tuning in.

04:20Thanks for tuning in.

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