For Raising Cane’s Chicken Fingers founder/CEO Todd Graves, the chain’s growth has never been about reaching a quota.
Instead, it has been about opening well-chosen locations with staying power. The chain has expanded to 14 states outside of Louisiana, and it has only closed two restaurants.
“It wasn’t about the numbers,” Graves says. “It was about having 100 restaurants we were proud of.”
Raising Cane’s reached one milestone on June 7, when it opened its 100th location, in Laurel, Miss. The chain will reach another in August, when it celebrates the 15th anniversary of the opening of its first location, on Highland Road at LSU’s North Gates.
The company experienced a 9.3% increase in revenue, from $125.6 million in 2009 to $136.3 million in 2010, and climbed one spot to No. 25 in Business Report‘s list of Top 100 private companies.
Graves now has a new goal: to reach $500 million in sales within five years by expanding primarily in areas where Raising Cane’s already is seeded, as well as opening stores in new rural markets. About 75% of its restaurants are company-owned; the balance belongs to franchisees.
The chain’s genesis is well-known. After a business professor and several local banks shot down Graves’ concept for a chicken fingers-only fast-food restaurant in the same vein as Guthrie’s and Zaxby’s, he raised startup capital by working as a boilermaker in California and as a salmon fisherman in Alaska.
Graves returned to Baton Rouge, renovated a storefront at Highland Road and East State Street, and opened the first Raising Cane’s in August 1996. The company still refers to that location as Cane’s One; Graves often conducts interviews and meetings at that restaurant.
A self-described business culture freak, Graves developed a set of four guiding principles—producing a quality product [the so-called perfect box], perpetuating a “cool culture,” empowering the crew and being involved in the community—that have functioned as a quality-control checklist for each location.
The company has carefully selected new locations, Graves says, often going where he had contacts or where current employees who knew the culture wanted to move. Thus, Raising Cane’s expansion model took on a pattern contrary to most quick-service restaurants.
Typically, a chain builds out regionally from its epicenter. Indeed, Raising Cane’s has a strong Gulf South presence, sparked by its identification with LSU. In 2009, it relocated much of its operations to a 24,000-square-foot office in Plano, Texas. But the chain’s location map also features disconnected pockets in states such as Colorado, Massachusetts, Minnesota, Nebraska, Nevada and Ohio.
“It was not a traditional method of expansion,” Graves says. “But we were looking for places where the model made sense and where we knew it would work.”
Raising Cane’s brand requires little explanation in existing markets; it’s one of the most identifiable restaurants in the Capital Region. But Graves and Julie Perrault, who serves as the chain’s spokeswoman, acknowledge it takes time for the brand to catch on in new markets because of its seemingly disparate elements.
For example, the restaurant’s name fails to reveal its simple menu of chicken fingers, French fries, Cole slaw and Texas toast. Its slogan, “One Love,” evokes memories of Bob Marley, the late Jamaican singer, songwriter and musician. Throw in the yellow Labrador retriever for whom the chain is named, and the message appears further scrambled.
But several highly focused strategies connected to the restaurant’s guiding principles have helped to attract and retain customers. “Cool culture” is achieved through upbeat engagement of patrons through social media. Keeping the crew happy occurs by promoting through the ranks; closing the restaurants on holidays, when other quick-service restaurants are open; and enabling local teenagers to act as “CEOs of their stores,” Graves says.
Moreover, the company is regarded as being highly civic-minded, a result of Graves and Raising Cane’s donating 25% of profits to communities in which the restaurants operate. Stores help make decisions regarding where donations are given.
Graves says the company narrowed its giving and volunteers service to five areas that dovetail well with its brand: schools, feeding the hungry, active lifestyles, business and entrepreneurial organizations, and pet welfare.
“Early on, we wanted to give to every cause out there, but we learned to focus,” Graves says. “We wanted to practice sustainable giving.”
The sustainable part comes from boosting sales and fortifying a brand as a result of well-placed community involvement, a strategy known as cause branding.
“Consumers want to know what you stand for, and it’s really important to be authentic,” says Sarah Kerkian, insights supervisor at Cone, a Boston-based strategy and communications agency that helped shape the field of cause branding.
Fast-food restaurants are a natural fit for causes that align with their missions, she says, pointing to Wendy’s work with adoption and Subway’s connection to the American Heart Association.
A recent Cone study revealed that 82% of Americans believe it’s important for the food and beverage industry to support social and environmental causes, a figure that’s higher than any other industry.
Raising Cane’s has been wise to “bucket” a handful of clear-cut issues, Kerkian says, though most companies engaged in cause branding narrow their focus to a single area.
But the chain might have indirectly achieved that by prominently featuring Raising Cane II. Even if consumers can’t rattle off Raising Cane’s five causes, Kerkian says, they associate it with Graves’ lovable Labrador retriever. And animals, she adds, are hard to resist.
“People relate to pets,” she says. “There’s no question about it.”
Raising Cane’s has supported more than 50 humane societies nationwide and has made significant investments in six dog parks in Louisiana—four in Baton Rouge and two in New Orleans. Raising Cane II is a certified pet-therapy dog, visiting hospitals and nursing homes weekly with Graves’ wife, Gwen.
And in June, Graves and his wife opened a play therapy room at the Child Advocate Center in Baton Rouge, a nonprofit that provides a safe place for child victims of sexual abuse. The dog also will work with children there.
But Graves says the company’s planned expansion is about spreading opportunity in local communities through jobs, philanthropy and the personal growth of employees.
“At 50 [locations], I was fine,” he says. “If it was just about the money, I would sell. I never dreamed that I’d have the opportunity to affect people’s lives on so many different levels.”
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