How Raising Canes Founder Todd Graves Built A Billion Dollar Chicken Finger Empire

0:00God made me good at chicken fingers to help people. If you're just three or four times a week raising canes, order, then you're a caniac. And literally after he won the Heisman, he's like, raising canes is my victory meal. I mean, literally right after with the canes box. Welcome, everybody, to a special Boardroom Talks. Today we are live in San Francisco, California. It's NBA All-Star Weekend, and I today have the privilege to speak to founder, CEO of Raising Canes, Mr. Todd Graves. Todd, welcome to the boardroom. Thanks, Rich. I've been excited to come on. Thanks for having me. Of course. I'm excited, man.

0:35And I'm excited coming off of Super Bowl weekend, where I think it was clear to anybody that was in New Orleans that Raising Cane's had as big a presence and as loud a presence as anyone. And I would imagine for you, that must have been an incredible, like, full circle moment to be the Grand Marshal of the parade and just have your brand so front and center on one of the biggest days of the year in your hometown. So what was that whole weekend like for you? What was that moment like for you? Well, you know, it's my hometown, New Orleans. I was born in New Orleans, raised in Baton Rouge, and I've kept my company there over the years and grown my company.

1:12And when the Super Bowl host committee asked me to be the parade king, you know, first I was thinking, you know, let's get somebody like Shaq. Let's get, you know, maybe one of the Mannings. They said, no, we want you to represent that Louisiana is a great place to do business. And that it is. I started my business, I've grown my business into an international, multi-billion dollar organization. So it really felt good for me to host coming back to my hometown and really show everybody what New Orleans is all about. And, you know, your whole kind of climb in business and success, when you really peeled back, I'm sure for you, it feels like you've been doing this forever.

1:45But it's in a pretty remarkable short time. Was that a bit of a pinch me moment? I'm sure you've had many along the way, but just knowing what that weekend represented and what you had built and them asking you to do this. Yeah, it really was a pinch me moment. You know, they're like, we want you out of all people, Louisiana, to represent our state and represent New Orleans people coming in. And sometimes you look, I'm one of those that I guess I'm never satisfied. Right. As soon as you achieve something, then the next second, you're like, what are we doing next? And every once in a while, you can stop for a second and say, we're doing we're doing the right thing.

2:17And this certainly was one of them. Yeah, I'm sure. And does it make you think ever? I know for me, I like to think of the origin story of everything that I've ever kind of wanted to build or create, even the things that didn't work, because that process that you go through when you come up with an idea, start to put it in motion and try to bring it into fruition, to me is the most fun and stimulating thing to do. It's like our purpose. Do you remember the kind of moment for you of when this all, I'm sure you do, when this all came to you and like what the genesis was, like how something like this that we all know now, how it came about and what the idea was?

2:56Yeah, you know, I got an interesting origin story. You know, this was a business plan that I wrote for business planning class at LSU. It got the worst grade in the class. And that was the best thing that happened to me, right? You tell an entrepreneur, aspiring entrepreneur, hey, this isn't going to work, which the professor said, hey, you put together a good plan. I worked in restaurants in high school and college. Plan's good, but the concept of serving just chicken fingers, you know, McDonald's is adding all these menu items and variety to not get veto boat. They're adding all these healthy items in the deal.

3:24And I said, no, you know what? I want to be good at one thing, and I want to be better than anybody else and execute on that. And from there, look, I took that business plan, went and saw just about every banker in town, got turned down. Same type of responses. With every no, it just fired me up that much more to do it. Had to then make my own money. Went out and worked in refineries in L.A. as a bowler maker doing turnaround shift work. Then I went and commercial fished in Alaska. Spent that summer doing that. Very dangerous, crazy work. But look, I was 22 years old and I was on a chicken finger dream.

3:56Nothing was going to stop me. Got enough money to renovate an old, dilapidated building. North Gates of LSU put a drive-thru on there. And the rest is history, you know. But that thing and starting it and doing it, I was so grateful it was so hard for me to start it. because I have this appreciation always that goes with me. You know, appreciated for my crew that worked so hard for my dream, appreciation for my customers coming in, supporting this guy that's frying their chicken that has a dream. You know, and so as I grew, you know, I wanted to do one, then I wanted to do another one on the other side of campus.

4:27And then I enjoyed building teams. So I wanted to grow another one. And we grew five restaurants in five months. And all of a sudden it hit me, my purpose. You talk a lot about purpose. I realized, and this is going to sound a little funny, but I think God made me good at chicken fingers to help people, right? So I employ 70 ,000 people, right? 70 ,000 of them have a great place to work, growth opportunities, and a place where they know we earn our money, but we have a good time doing it. We give back, and having that internal crew and then the monies we're making now, luckily we're very profitable and we're giving back to communities.

5:00That's my purpose. That's your purpose. Why I keep working, yeah. So the idea, like the idea that you got the worst grade in the class for was simply what Raising Cane's is today. The idea was to make Chicken Fingers the very best and be the one thing that you guys delivered. And then you're saying that when you couldn't get money right away, you went and did all of those odd jobs while sitting on this idea. That's right. To make money specifically to open that first restaurant. So, like, the actual, like, the idea itself, right, thinking about it from a business perspective, why did you think that was going to work?

5:33What did you see in this, like, crowded QSR space that you really believed that just focusing on chicken fingers was going to turn into this type of business? Yeah, you know, it was the 90s, right? And so people just then were starting to eat boneless chicken. Before it was always, you know, just bone-on chicken. And so I saw it from every mom and pop to, like, a Chili's would have a chicken finger meal. And there's actually a couple of restaurants that started to specialize in that. But for me, as I was like, if you can deliver that high quality product with speed and convenience, like fast food, but with that high quality, like an In-N-Out burger.

6:05You know, I was like, that will be the key. And it really made us cool, right? You didn't have options. You didn't have different things to look at. So in the beginning, they were like, they're coming through the drive-thru. They were like, can I get some barbecue sauce with that? No, you're going to have cane sauce. And not having that became made it cool. Part of the story. Part of the story, yeah. Part of the story, yeah. And so when you went and finally got that first financing and you launched, was this successful right away? Yeah, you know, it's funny because I was like literally the night we opened, we had some Office Depot registers.

6:30We didn't even know how to program them. As soon as we had a program, I started waving people in. I went to the local bars, come to us late night. Late night business was what first kicked off and then slowly came in the next couple of weeks during the day. And from that day on, look, we made$30 our first month,$30. And people are like, oh, that's all. I said, no, look, I could pay my vendors. I could pay my crew. You know, we actually were successful now and just built from there. So you said you have over 900 stores now. Right, yeah. And from that point where you first opened, was it like open in a market, see the success, open in another market and keep replicating this and learning the business as you went?

7:06Was there an ultimate like fundraise that you did end up doing or was this something that you just continued to build your own? Yeah, no, so I built it my own. You know, so I wanted one and then I wanted two and then I wanted several. And then that went from there to, look, I want to start growing out of state. And so what we did was, interesting financing way I did this, and banks were a lot more lenient back then. You were around back then. What I'd do is I'd get community banks, right? And so if I was home of Louisiana, right, to get the local home of community bank, and then I would get a subordinated debt investor, right?

7:36And so I'd do a 15 % subordinated debt to the banks and just simple, no prepayment penalties, a one-pager. So I might borrow, go out and get$200 ,000 then go borrow a million dollars off the bank. And it kept me from having to sell equity and I grew all these locations and went to about 28 restaurants and then Hurricane Katrina hit. We had 21 to 28 locations go down. And what I was doing, each time I was opening these different restaurants, I was creating cash, right? So I got sales in the first day. I don't pay payroll for two weeks. I don't pay vendors for 30 days. So we were creating cash and as that went along, I was able to generate more cash for the next openings.

8:14Katrina hits, 21 locations goes down, that cash is not coming in. Coming in, yup. Thank God we were able to open quickly. We started by feeding first responders, and we were actually very, very busy when people came back in. But that was my first big learning lesson as a business. I should never have leveraged it that way, should not have done that, because I could have wrecked the company then. So in hindsight, how would you have approached it? Because I've heard you quoted as saying, like, try your hardest never to give equity away, and why give equity away if you're gonna work just as hard as you would if you owned it yourself.

8:44And, you know, that's the goal, right? As a founder, you hope you can build what you create and come up with without having to raise outside capital. But what would you have done differently looking back on it that wouldn't have left you so leveraged? You know, that's a great question. Never been asked that before. I would have slowed down growth is what I would have done. I would have kept my, you know, three times leverage. I would have kept a better leverage ratio, just grown slower, but I would have not had the opportunity to wreck the business. And look, it's these acts of God, these Katrina-type hurricanes can happen, right?

9:14And so I'm a firm believer, try not to sell equity for your baby. You're gonna work so hard, you should reap those rewards yourself versus equity partners coming in that sit back and watch their money come in. Just don't over-leverage yourself. If you have to slow down growth, I would go that way. Do you think in some ways, even though that was a challenging time for you personally and for your business, that what the business meant to the community and what the DNA of the business ended up being was in a lot of ways like cemented during that time? It absolutely was. You know, so we started off, we opened our restaurants quickly and I was in the community.

9:48Like I was one of the first people back and after Katrina, because I'm like, we need to reopen these restaurants. One, I need to get my crew a place to work. Second, people are going to come back. They're not going to have kitchens. They need a place to eat and something, normalcy. Feeding first responders for 30 days and then the community coming back really cemented us in New Orleans. It's like you are the community's restaurant. And you personally, right? I've never seen a brand like yours where the face of the brand, the founder of the brand was so well known. If you think about some of your competition or what may be classified as competition, nobody knows the name or the face or the person behind some of these brands and running these brands.

10:26But I think that it still feels in a lot of ways like a family business. And the people that have been with you have been with you and have moved up each one of these roles. How do you maintain that environment and culture when you're growing, when you have 900 stores, when you can't run it like a family business, but you want to maintain this kind of reputation that you guys have had? Yeah, you know, we have a very lack of founder-driven business, especially in the food business, right? And so when people have great ideas, it seems that they work like crazy. They get it to success, and private equity comes in and buys, and then those things start happening.

10:59Private equity starts cutting quality, and it kind of loses it. But very important for me to be the face of the brand because people resonate with brands when they know there's a guy and there's him and his family that want to serve me a good product for a good price and food safe and those things. So for not only for the customer aspect is my crew and seeing my crew. And so what I had to do with 900 restaurants all over the country, also different parts of the world for me is to constantly be on social media, direct internal crew videos where I can talk. I can thank them, keep them updated on what we're doing.

11:35I do market trips. So now if I go to a market, I'll go into one restaurant and have all the management, all the crew come out and we can talk for 30 minutes. Basically thank them and say, what can we do better to help support you in this area? But being more concise and planned and well thought out to reach a broader audience that you have in your company is very important. Look, they know I'm hands-on, they know I'm working, so they work hard serving our customers. And how do you keep people? So, you know, my goal was to have an exceptional place to work. So, look, I worked in restaurants in college and in high school too, right?

12:08There was no music played in the kitchen. It was a negative environment. You're just told what you're doing wrong. So it stayed with us this whole time. It comes from that appreciation that I have. We're gonna play music in the kitchens. We're gonna do positive reinforcement management. So like if I'm in the kitchen, I'm like, someone's making some of Cain's toast, right? Man, that's some good toast. And you think a six year old kid would be like, yeah, whatever, that's easy to do. But I'm like, that's good toast. They're like, thank you. Can you please do that? Thank you for doing that. That kind of environment, coupled with growth opportunities for crew members to go up.

12:41Look, we're on pace right now, to do 3300 internal promotes this year in the management right this is when people start as crew members get up into management can be restaurant partners for us and then what we do for the community is and we make sure they know about this that we tell them is one of those places we get intrinsic motivators they want to stay with us so it's almost ingrained in the culture that this isn't a fast-food job this is an opportunity to build your career right right and build your life there right so when you hire people in management positions they've got to be informed that they have to tell somebody and stop the line cooks and say, you're doing an incredible job today.

13:18Absolutely. We do probably three times the amount of interviews for managed positions than anybody else in my industry. And what we're trying to find is that intrinsically motivated, that they're matched with our culture, you know, and so we get the right people. And it's really easy. It's really easy to go in and be really nice, you know. And so now constructor criticism, things like that, we have to do. Look, we have to terminate people. We have those things that business has to do. is. But if you leave people by their hearts and minds, then you're going to get a much better result. That's inspiring.

13:45I think of Katrina as one, but I would imagine there was multiple other ones to get you to 900 stores. Is there another inflection point, like a moment where you kind of looked at yourself in the mirror and realized you had something or you had to pivot at some point or add a new layer to what it was that you were building to expedite growth? All these types of opportunities. Like, you know, you learn more, I think you'd agree with this, from your failures than you do success, right? And so when we moved into Texas, say Texas, Ohio, these different places, we just thought everybody was going to come and everybody was going to flock to the restaurants.

14:20Didn't happen. We weren't good at remote management. And so we put maybe, you know, one of our best general managers, but they were great because they were under our care. They weren't independent. Put them there. They did terrible. So I had to go back and fix that and and literally along the way, learn how to grow into different areas. Another C-Many moment was another just terrible thing that happened to our country, but COVID. When COVID happened, we were an essential business and had to be open, and we were very fortunate to be able to do that. And so with everybody working, so most people are home, we're all working.

14:50And so for me is I went to every one of our markets, and I'd fly out, and I'd go see the crew. You couldn't cross families, so I would literally speak to them from outside the restaurants, tell them thank you for the hard work. But my roadshow all overseeing that, the crew knew I was there. That was another solidifying for not only the communities we were in that we were open and working hard, it was for my crew to say, hey, Todd is with us, so we're working hard too. He is trying to make sure that we're gonna be safe with this COVID going on, but we're here to serve the communities. How do you fit everything in your life in a day?

15:23Because from talking to you about your family, I quickly see that you're also present and around your kids and around your home, but you seem to be everywhere, and you seem to have that kind of generational energy. You see it in some of these successful people, some of your peers that look like they could go and do this 24 hours a day, seven days a week. How do you manage it? Where is your time broken up? Is there a different time in looking at the actual stores and trying to figure out the product and now thinking about what some of those big business goals are for yourself? Yeah, you know, so work-life balances is always a challenge, as you know, and being as busy as we are.

16:00You know, for me, it's just wherever you are, be there, right? If you're at work, you're at work. If you're with a family, you're with a family. My family, I've raised our kids and my wife just, you know, as we've gone along is this is what we do. This is what we do for people. People aren't here to serve us. We're here to serve people. And they know that's a lot. If you do that right, it's a lot of work. So we go spring break, you know, kids are off. We go to Cabo or somewhere on the beach. I'll get up at 4 a.m. and I will work until 11. They'll sleep in, you know. 11 o 'clock, I'm having breakfast with them.

16:29We maybe go down to the beach. The beach, then I'll take care of a few things, maybe run up for an hour. They're coming up, getting ready. They're chilling out. I'm working. We go to dinner. We spend that. Putting those two things together, also bringing them on trips, letting them see that what we're doing for people is they understand. So look, I didn't make, you know, I give young entrepreneurs, you know, getting started. I'm like, look, there is no balance of life. Like, people tell you there are, there isn't. And, but you got to build yourself and depending on growth to where you can spend time.

16:58I'm like, look, I missed half the baseball games that my son was in, but I was there for half of them. And I was watching every pitch and I was watching every time at bat and doing those things. Try not to miss a birthday and things like that. But they understand if I'm not there, it's not about personal reasons. It's our family reasons of what we can do for people. Do you agree with that? I've had a lot of other friends of mine who are fathers that are CEOs that talk about Obviously quality over quantity is said all the time But you feel like what your children have needed while you were growing up was making sure you were there when you were there As opposed to having to be at everything and being somewhere else in your mind Exactly right dad's not thinking about oh wait sales here that never emergency They would understand that but dad's here and dad's present.

17:39Yeah, and he's present So I read that you're planning on opening 100 new stores, new locations. What at this point when you are this successful, obviously getting capital or having your own capital deployed, none of that is an issue anymore. Proving the concept and the culture and the DNA, none of that has to be proven anymore. But when you look at where you're going to expand, what is the process now that you go through in thinking about that? Yeah, I mean, the number one word I can use is discipline. Like right now it's ours to screw up, right? Over 900 locations, but we could have double that, but they wouldn't be the quality.

18:13It wouldn't represent my crew. So it's my vision statement. It's to someday have locations all over the world, be known as the brand for quality chicken finger meals, great crew, cool culture, and active community involvement, right? And so that sets always, always work that against it. So if we say, hey, let's open 150 restaurants. I'm like, no, we'll have to open four new markets where we have to set up entire business unit teams to get set up. We're going to stick to 100 because great crew will go to the wayside. Our active community involvement will go down. We're not prepared for that. So that's what keeps us disciplined as we go along now.

18:46Really, we're well-received everywhere we go. What I'm trying to do with growth is go to the places higher populated now. So that's why we're not in Montana right now. I'd love to be in Bozeman, right? But we're not going to have a big growth base out of that. We'll come back to those smaller states right now, hitting all the big markets and be able to grow. It's going to be really exciting. So the strategy and the thought behind all of it is very meticulous. Like, you know now that you can't mess up, that that ultimately compromises the brand. So as big as you can get is not what the goal is.

19:14Yeah, you know, we're going to keep opening restaurants to 100. So it's a nice round number. Yeah. 100 is where we're at right now to operate exceptional restaurants. Exceptional. If I balance that up now, now I'd like to start getting into 110, 120, 150, and to go there in the future. But right now it's just quality, quality, quality. And you don't franchise, right? I do not franchise. So not in the U.S. And so like we have restaurants in the Middle East. And so with the politics there and logistics, we have a great partner, Muhammad Alshaya, Alshaya Group. They're exceptional. But no, look, for me, I can control our restaurants.

19:47You know, franchisees never going to run your restaurant like you are, right? They might be enthusiastic for a couple of years and then they want to play some more golf. They're tired of frying chicken all the time. I like to have some phantom equity for my restaurant partners who are people that come through our system or we hire from outside. They're the partners that are working. They are the Todd and Gwen Graves of their community. I'd rather them make more money and then I can constantly control how my crew is being treated, making sure customer service and quality food is always right. You guys must get hounded with people wanting to franchise, right?

20:19It's just nonstop, but we have the same thing. Sorry, we just don't franchise. Yes. So knowing that everything you do is very intentional and purposeful, your kind of presence now around sports and entertainment, how did that kind of come to be in your mind? What was the goal? I mean, there's the obvious, right? I would imagine that just the brand recognition and the brand alignment, but you probably had a bigger goal in starting to achieve all this. Yeah, you know, we started off at Baton Rouge, LSU, right? And so football is just a religion down there. And so what I wanted to tap into was that whole fandom around football, right?

20:58So just has raving fans. And so people are cult following towards Raisin Cane's and with sports. So I want to be part of that moment, right? So that's sponsoring the school. And in the beginning, I couldn't do NIL. You remember back then you couldn't do anything with players. So when they opened that up, I was like, perfect. So it's not only around the school and the program and the team, it's around the individual players that are great. And so tapping into that. And so it's, you know, there's some top of mind immediate sales, but it's a long-term loyalty. When people remember, hey, you know, Joe Burrow loves Raisin Canes.

21:29That's his food he eats. Raisin Canes eats that food. Then you tap into that fandom. Yeah. And do you identify the people you want or do you wait for that, like, hey, Joe Burrow loves Raisin Canes? Yeah. So ideally, and how it started was it was just people that loved it that wanted to reach out, right? And so it would be, you know, I know so-and-so is a Caniac, you know, we call him. Caniac? we'd approach, Caniac. If you're just three or four times a week raising Cane's orderer, then you're a Caniac. And so hearing the Caniacs, then we'd approach, right? Because I want it to be authentic and genuine, right?