David Senra · Nov 9How Todd Graves Built Raising Cane's
Todd Graves opened it in 1996 near LSU with a $90,000 SBA loan and about $60,000 from shareholders, and kept a single focused menu. It is second in unit volume behind Chick-fil-A, averages 2:35 drive-through service, has 75,000 crew members, and carries about $3 billion in debt. He bought back his franchises after they ran at about 85 out of 100 versus his 95.
Tips
- Todd Graves held to one chicken finger menu despite experts and a B-minus professor▶ 7:17The menu has stayed essentially the same since 1996, and the chain is second in the industry in average unit volume, behind only Chick-fil-A.
- Todd Graves refuses to cut quality a penny at a time▶ 10:37In the Middle East he spent two years building a supply chain so the food tastes identical, accepting the extra year's cost.
- Todd Graves pairs one craveable product with fast food speed, so every added item costs sales▶ 1:24:23Drive-through and counter service runs 2 minutes 35 seconds, and 1% of about $6 billion in sales is $60 million.
- Todd Graves skips limited-time offers so managers have time for crew and customers▶ 1:26:26He says Cane's visit frequency matches any other quick-service restaurant, and rivals' chicken specials do not hurt its sales.
- Todd Graves funded the first Raising Cane's by working 95-hour refinery weeks and Alaska fishing▶ 26:03Two years passed from business plan to opening, and the first month's profit was $30.
- Todd Graves turned every no into fuel to prove people wrong▶ 13:05A professor gave the business plan a B-minus (rumored to be a failing grade) saying the concept would not work; the chain now has hundreds of locations.
- Todd Graves and his partner swore an oath around a campfire never to quit▶ 33:02The partner later left for a different path, but the commitment carried Graves through refinery work and Alaska fishing.
- Todd Graves rejects delegation and gets into the details until someone beats his 95▶ 1:18:10He says his co-CEO is a better operator than he is, yet he still stays in the details with him.
- Todd Graves bought back his franchises because the 85 versus 95 gap and slow change cost too much▶ 1:32:50After the buyback, sales, wages and operations all improved in the former franchise markets, and company restaurants carry a valuation above 20 times EBITDA versus 4 to 7 times for franchise models.
- Todd Graves says build a business natural to you, as his first partner Craig left▶ 1:35:21Craig later returned to Cane's for several years in the work he liked, started his own business and stayed a close friend.
- Todd Graves holds on to his company and ownership instead of selling to private equity▶ 1:39:46He says Cane's is valued at over $20 billion with debt of about $3 billion and he still holds over 90% ownership.
- Todd Graves swore off financial strain after Katrina exposed his debt-heavy growth▶ 1:49:13Cane's was the only restaurant open in Metairie for weeks, and the post-storm sales funded big crew bonuses and community giving.
- Todd Graves proved a repeatable prototype in Lafayette before scaling past Baton Rouge▶ 1:45:20The Lafayette prototype produced faster drive-throughs, the 'ONE LOVE' logo and the combo meal, and later a conventional loan.
- Todd Graves coaches crew every day with positive motivational management▶ 58:59He says he screens hires for intrinsic motivation, not titles or pay.
- Todd Graves built a Cane's Love department for crew respect, recognition and rewards▶ 1:06:35Cane's has about 75,000 crew members, and he calls the headquarters a restaurant support office.
- Todd Graves says a founder's baby gets personal care that private equity cannot match▶ 1:44:40Sales rose during COVID, funding large crew and customer bonuses.
- Todd Graves says chase service and sales, because money follows from them▶ 48:19Cane's trails only Chick-fil-A in average unit volume, while many rivals do about a third of its sales per unit.
