Updated 11:20 a.m.

Look no further for proof that South Street is on the rise: Federal Donuts is opening there.

This September, the cult-favorite fried chicken and donut shop will take over the ground floor of 540 South St., marking the CookNSolo-connected minichain’s seventh location in Philly.

(For those counting, it’ll be the sixth permanent standalone FedNuts, along with the seasonal outpost at Citizens Bank Park. The eighth Philly shop is set to launch at East Market next year.)

Federal Donuts South Street will serve the same menu as its other stores, for which it has become famous: “hot fresh” sugar-coated and “fancy” glazed donuts; coffee; twice-fried chicken with a variety of spice or sauce coatings; and the fried chicken sandwich on a Martin’s potato roll.

Hours have not yet been set, but there’s the potential for this location to stay open late on weekends, “because hello South Street!” said a company rep.

The space at the corner of Sixth Street, of which FedNuts will take up 1,600 square feet with a counter and table seating, was most recently home to a Clear Wireless store. After that closed, the property’s overhang became host to a semi-regular used book stall run by a person experiencing homelessness.

Credit: Danya Henninger / Billy Penn

That transformation, from makeshift flea market to Mike Solomonov restaurant, is representative of a development surge on the retail corridor.

Once the hippest strip in town, South Street has suffered over the past decades as it tries to regain its cool cachet in a city experiencing development booms in other neighborhoods. There’s a need for landlords to find tenants that can afford market rate rents — hence the Wawa coming to Ninth Street and the (controversial) Target slated to land on Fifth — but also pressure from the community to “keep South Street weird.”

Federal Donuts fills that latter niche. It’s an independently-owned local business that’s not afraid to be quirky, and also gives back to the community via its partnership with philanthropic diner The Rooster.

“Immigrants, artists, activists and students have all found a home along this unique stretch of the city,” read a statement from Steve Cook, who co-owns the company with Mike Solomonov, managing partner Tom Henneman, Bob Logue and Felicia D’Ambrosio.

“We’re thrilled to introduce Federal Donuts, very much a local business that will attract many to South Street’s emerging retail district,” said John Usdan, CEO of property owner Midwood Investment & Development.

Once FedNuts opens, it’ll join a food-happy two-block stretch that includes high-end dining destination Serpico, hidden gem Woodrow’s Sandwiches, mainstay South Street Souvlaki and newcomer Chops, which is opened over the weekend with locally-made sausages and ribeye cheesesteaks.

As for Federal Donuts expansion to other cities, the Miami outpost remains shuttered, but plans to launch in Nashville are still in the works, a rep said.

Danya Henninger is director and editor of Billy Penn at WHYY, where she oversees the team, all editorial decisions, and all revenue generation — including the membership program. She is a former food...