2016 Company of the Year (100 or more employees): Raising Cane’s
(Photography by Marie Constantin: Raising Cane’s founder and CEO Todd Graves)
In mid-February, Raising Cane’s Chicken Fingers’ corporate headquarters in Baton Rouge made what has become a commonplace announcement for the rapidly expanding franchise. The company was opening another location, this time in the Dallas suburb of Waxahachie. But the opening of this restaurant marked a milestone. It was the 255th for the chain that now has locations in 20 states and Kuwait.
Founded in 1996, Raising Cane’s has no plans to slow down, according to founder and CEO Todd Graves. Just before the Waxahachie announcement, Graves held an Apple-style summit in Dallas, where a large number of his corporate staff are located, to celebrate the fast food company’s 20th anniversary and to reveal a new five-year plan. The event had a Carnivalesque atmosphere. Taking his cues from the late Apple co-founder Steve Jobs, Graves took the stage to unveil his ambitions for the next phase of his brainchild: a plan to grow the system to a total of 600 restaurants that will produce $1.5 billion in annual sales by the end of 2020.
On the surface, the success of Raising Cane’s has seemed unstoppable. It’s one of Louisiana’s most ubiquitous brands, worming its way into the hearts of young people and their parents, who turn to the restaurants routinely for quick meals, as well as school, church and tailgate catering. Few entrepreneurs are as effusive as Graves, a relentlessly energetic guy who has managed to make a bad-for-you meal broadcast a wholesome vibe. The company mascot, a yellow Labrador retriever, shores up the brand’s homespun credibility, as does a focused corporate philanthropy program that donated $6.5 million in 2014, mostly in the form of free food, beverages and tchotchkes.
“I truly believe this is my calling,” says Graves, void of schmaltz. Like every single employee in the company, Graves includes the titles “fry cook & cashier” on his email signature and business cards, signaling, he says, an appreciation for each position that makes a restaurant operate successfully.
“I’ve done every job, because when we first opened, we didn’t have much money,” he explains. “Our culture is deeply rooted in appreciation.”
The story of how Raising Cane’s was founded has been recounted countless times in the Capital City. It goes like this: Graves, a Baton Rouge native, wanted to open a chicken finger restaurant, but was met with consistent rejection. He devised a business plan with original partner Craig Slivey, who submitted it to an LSU business class in 1995 to little fanfare and a low grade (Graves graduated the year previous from the University of Georgia). A succession of banks refused to lend Graves money for the idea.
Undeterred, Graves raised cash by working as a boilermaker and a salmon fisherman, which helped him secure a U.S. Small Business Administration loan. He renovated and opened the first Raising Cane’s at the corner of Highland Road and State Street with the help of friends, a location Graves calls “Canes 1,” or “the Mothership.”
The college crowd embraced the concept, and with business exceeding expectations Graves open a second location 18 months later on Lee Drive. The next year, he had a chance to open six new locations when he took over five former Fast Track restaurants and opened a spot in the Mall of Louisiana food court.
“It was a blast, and we were rocking and rolling,” Graves recalls of Raising Cane’s early days. “The first two were student based, and on Lee we were also picking up families. But those later ones made me think, ‘Wow, this could really be something.’”
The rapid growth also reminded Graves that fast food restaurants live or die by efficiency, so before he opened a ninth store he hired consultants to help create a consistent design, store flow and set of systems.
“We put together a five-year plan and developed three different prototypes for three different properties,” says Graves. “We worked on the design, our non-negotiables as a company, the One Love concept and the menu.”
The stripped-down menu of just four combo boxes creates predictability for both the customer and the staff. Drive-in and counter patrons can recite an order with little thought or hesitation, enabling the “fry cook & cashier” behind the counter to quickly assemble the completed box.
Graves has never been seduced by selling limited time offers or expanding the menu to include healthy options or breakfast. He says he was inspired by the truncated board of fare at California-based In-N-Out Burger, founded in 1948.
“You do one thing, and you do it better than everyone else,” he says.
Such a singular focus means Raising Cane’s must buy a mammoth amount of chicken tenderloins, the premium strip of meat on the underside of a chicken breast. Using only that cut, and the fact that the meat is never frozen, has required Graves to create a continuous supply chain circuit. Poultry suppliers from around the country are a huge part of the operation, he says. Restaurants receive daily refrigerated shipments of chicken tenderloins from one of 18 distribution centers around the country. Each store does its best to anticipate seasonal and weekend surges, because running out is not an option.
If all goes according to plan, Graves says the restaurant will have sold 1 billion chicken fingers by 2020.
How We Did It: Companies of the Year share their milestone moments.
Growth usually happens concentrically for a quick-service restaurant chain, with a brand spreading throughout its home region before piercing new territory.
But that hasn’t been Todd Graves’ modus operandi. The Raising Cane’s founder and CEO says he has been more interested in finding capable franchise partners than he has predictable geographic growth. The company’s first expansion beyond Louisiana was in Ohio, followed by Colorado, Nevada and Minnesota. Twenty-five percent of Raising Cane’s locations are franchise-owned by groups of partners who can open a group of stores, rather than just one.
“We didn’t want to force concentric growth,” Graves says. “Because to me, it was not where, but with whom. I have to really feel good about our partners.”
Graves applied the same logic to his first international expansion. Last March, the chicken finger chain announced a location would be established in Kuwait. At that point, the company was reporting $450 million in annual sales for its 210 locations. It had caught the eye of Mohammed Alshaya of the Alshaya Group, a Kuwait-based enterprise that expands familiar American brands, such as Starbucks, in the Middle East, North Africa, Europe and Russia.
Alshaya flew to Baton Rouge. He and Graves met for lunch at Raising Cane’s, and Graves showed him operations.
“I really, really liked him, and his business philosophy was great,” recalls Graves, who then traveled to Kuwait, arriving a few days early to “mystery shop” some of Alshaya’s other ventures.
“I saw friendly people doing exceptional jobs,” says Graves, who believes in a cheerful, service-driven staff. “[Alshaya] assigns a brand presence and they really live it.”
Working with Alshaya, Graves is now planning two more Raising Cane’s locations in Kuwait and he’s working to open two others in Egypt.