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- [00:00]
David Senra
I've started a new show where I have conversations with some of the greatest living founders. That show is called David Senra. It will be on a separate podcast feed from Founders. So it's very important that you follow David Senra on Spotify, Apple Podcasts, YouTube, or really wherever. You're listening to this right now so you don't miss future episodes. This conversation is with one of my favorite living founders, Todd Graves. Todd owns over 90% of raising Cane's a business that is worth over $20 billion, and he's been working on this business for almost 30 years. Todd has an extreme level of focus and a love of radical simplicity that I love and I try to apply to my own craft. I am posting our entire conversation on.
- [00:38]
Nathan Latka
This feed so you know what the.
- [00:40]
David Senra
New show is like. I hope you enjoy our conversation. And please don't forget to follow the new show, David Senra now so you don't miss future episodes. And by the way, nothing is changing with founders. I'm still doing episodes every week and it will work on founders until I die.
- [00:58]
Nathan Latka
I was not expecting to start here, Todd. We were just talking before recording. I didn't expect to start on sleep, but what you just said is exactly how most of history's greatest entrepreneurs are. They just can't stop thinking about their business. Because I was asking you, like, how much caffeine do you take? How much sleep do you need? And then your answer was what?
- [01:14]
Todd Graves
I just have a really erratic sleep. So I'll go, you know, some nights I'll go maybe three hours of sleep. The next night might be three to four hours, the next night be five hours. And usually about that point is the next night I have to cr. So I'll sleep 10 or 11 hours to catch up, and then I'll actually wake up feeling great, feel like I don't have to muscle through a day keeping myself awake. And then, then I'll be caught up. I'll go another three hours that night, four hours and five, five hours. But really dictates it is what I have going on in business and what I have to be thinking about, what might give me a little bit of anxiety about things I got to decide on the teams, what I have to work through. So my brain will be working as I'm sleeping and I think it's trying to figure out solutions. So then I'll just wake up and I'll actually wake up pretty refreshed thinking about, you know, that problem I had and then go jump on the computer in my underwear in the middle, I wake up and go first that and then start sending out emails. Just actually solve that problem, you know. But if I get caught up at work and there's nothing like really pressing, then I can sleep like a baby. I don't have a problem sleeping as I have a problem sleeping when I got real business on my mind.
- [02:14]
Nathan Latka
This keeps reoccurring in all these biographies of history's greatest entrepreneurs that I read. And so I just did this episode on Jiro, the best sushi chef in Japan, right. The documentary on him is Jiro Dreams of Sushi. Why? Because in his sleep he is thinking about his work.
- [02:27]
Todd Graves
Right.
- [02:27]
Nathan Latka
Then I did this episode on this guy named Michael Ferrero. It's another family held business. It's the Ferrero Chocolate Company, right. He would say that he dreamed up what he called comforts, which was new products, new chocolates to make in his sleep. The Michelin Brothers, same thing. They would dream up marketing ideas on how to market tires in their sleep. Leonardo di Vecchio Luxottico, one of the biggest businesses in the world. He just passed away recently. He said he would literally wake up dreaming. He would dream about ideas for his business and he'd have to either keep a tape recorder next to his bed or in your case in your underwear and a computer or he'd have like.
- [03:01]
Todd Graves
A notebook, notepad, just to write it down.
- [03:03]
Nathan Latka
It's very fascinating how you see the same personality type appear throughout over and over again throughout history. So we are in the very first raising canes. You were very kind enough to let us record in here.
- [03:13]
Todd Graves
The mother should.
- [03:15]
Nathan Latka
You're almost at your 30 year anniversary for running raising canes and starting this. I want to ask you a question I love. I've heard you say this before. What is the advice that these so called, the bad advice these so called experts gave you when you were trying to start the very first raising canes.
- [03:31]
Todd Graves
You know, so having a dream to start a chicken finger only concept was just back then was in Louisiana was kind of unheard of. It was just a totally new idea. You know, we're known for our Cajun and Creole food here. Like at lunch people could get a plate lunch, some Cajun dish. And that's what people are used to. Also in the industry at that time, you know, McDonald's and these other big quick service restaurant chains, they were adding menu items because they didn't want the, the veto votes. What they called it, one person in the car that might not have the choice at that restaurant that they could get. They Said they would veto the whole car and go somewhere else that had that menu item for their deal. They're also adding healthy items back then. So starting a, you know, a restaurant and having an idea to do on, to focus just on one thing, one singular product focused menu was just really unheard of at that time. We didn't have In N Out Burger in Louisiana, right? Not a lot of people.
- [04:24]
Nathan Latka
But you knew about Harry Snyder.
- [04:26]
Todd Graves
Not until I went to LA to work in the refineries. That's when I, when I went out there and to work in the refineries when I went to In N Out Burger. That's reaffirmed my belief that hey, you can do one thing and do it better than anybody else. And then I did a research and I started, started studying the in and out model like since 1948. So 1948 they have the exact same menu, right? And people know what to go in. It took one time to go there and someone to recommend get a double double and get it animal style, get the fries, get a, get whatever beverage you like and then get a chocolate shake. And it's my same order every time. When I first went, I kind of held up the order line for a second and you know, went inside and done. Next time I went there, went through the drive thru double, double animal style fries and a Coke. And then I also want to give that chocolate shake. And so seeing that really reaffirm that belief for me. Because since 1948, you think about how many different burger chains opened up and then went all around In N out burger and they added all different menu items and they added unbelievable marketing. In N Out burgers marketing is not much generally. They put big billboards on the interstate and say here's where it is, here's where we're at. And they continue to do well, raise their sales because they stuck to what they're good at. And for that, that really reaffirmed my belief. And when I was able to come back from, from a lot, from going to LA to work in refineries, then going to Alaska when I came back, I think that was a big selling point. Being able to add in and out burger as a successful change since 1948 with the banks at that time, that's when I got that SBA loan after I raised that capital.
- [05:53]
Nathan Latka
So when I did the episode on you, this is where, because I read Harry Snyder's biography, he's one of my favorite founders. I mean the guy was completely obsessed. There's a great line in one of his Biographies where he would live across the street from the first in and out. And he'd work all day, right? And then he'd sit in his living room, watch tv. But he'd look out the window and as soon as the drive through would back up, he'd get out of his chair and run across the street. He was completely obsessed and he just like you, he bucked the trend in his industry. They went to like when Everybody, I think McDonald's was like, no, we're going to like freeze our beef or whatever the case is. He's like, I'm going to have my own butchers. He's like, I'm going to get the fresh tomatoes. Like, no, no, I'm not going. I'm all about quality. There's a line, they just gave me a tour of the kitchen. It says never. You guys have a mantra that says, never sacrifice quality for speed.
- [06:41]
Todd Graves
That's right.
- [06:41]
Nathan Latka
And he was like completely quality. Completely like quality obsessed. And then if you just sit there and you think about your business over and over again, like, he's the one. A lot of people don't know this. He invented the drive thru speaker.
- [06:53]
Todd Graves
Absolutely.
- [06:53]
Nathan Latka
Like, how can we do this better?
- [06:55]
Todd Graves
That's right.
- [06:55]
Nathan Latka
Because remember the prehistory to that was like you had drive up restaurants, you didn't have drive through restaurants. So in that episode I was like induced into a state of rage because all these people are telling you, oh, this, this, you can't have a simple menu. It's like, no, just go to the West Coast. They're thriving. They have a cult like following. Went to visit my brother and sister in Orlando and you guys had just opened up. You weren't in Orlando before. And I was like, have you guys ever had raising canes? This is after I did your episode. And they're like, no, what's that? I go, first of all, you should have listened to the goddamn episode. Second of all, I'm going to take you to Raisin Canes. And so I saw exactly what you said where you're like, I don't hide know we put raising canes right next to, you know, McDonald's or Chipotle or.
- [07:34]
Todd Graves
Whatever the case is.
- [07:35]
Nathan Latka
It's like, I'm just going to do one thing and do better. Anyone else? So we pull up my brother and sister's like, what the hell is going on here? It's, it looked exactly like when I was just in California two days ago. Looks exactly like when you pull into an in and out line. They're like, why is There a line out the drive thru. Why can't we find anywhere to sit? We have to wait for it. We literally had to wait for people to get up. I was like, just taste it and you will understand. And then I thought of you that day because we're eating outside and I look across the street and I see poor old little Wendy's and there's a sinker car in the drive through. Yeah, I go, it's because Todd is obsessed. He wants to do one thing and do it better than anybody else.
- [08:09]
Todd Graves
Yeah, you have to focus on doing one thing and do it better than anybody else. And so since I have that singular product. Focus, right? And so people, some people call it like a simple menu. I say, well, it's not simple, it's focus. And here's why it's not simple. Because our chicken has to be exactly right. Look, it comes from the weight of the bird that we want to get the size tender we want. It comes from the species of bird that gives the most tender and flavorful chicken. It comes up a lot of technical stuff, rigor mortis on the bone after the chicken slaughter, then it stays on the bone a certain amount of time, then you get it fresh, then you brine it for 24 hours. Like all those things are that like our fries, right? So we have crinkle cut fry, but like, like a thinner crinkle cut fry. You get fries from different times of the year, right? They do the, they do the crop harvest and it sits in the warehouses. At certain times of the year you get more sugar tips in the fries. Those sugar tips have to come. So we have to remind our crew, hey, when you see those black sugar tip ends, take those out. It's not visually pleasing. The our bread, we get bread made by bakeries all over the country, but that recipe has to be exactly right. And it's little dough balls put together, baked together so it's pull apart bread. It's not sliced slow. Sliced loaves end up being more stale. This is dense, moist, flavorful bread. Our coleslaw we secure all over the country. We have to make sure all those vendors have the right type of slaw that we want for the right type of growers growing a certain amount of time. In that, that slaw, you have cabbage, but you also have purple cabbage, you have carrots, all those things. And so you go down to your tea. Our tea gets brought from three different countries, the tea leaves, but we have to get at the right time of the year. We might pay more for that, but it's that, that focus on that so my team can focus on those menu items and deliver it every time door. It tastes exactly the same around every canes across the country. So since we're focused, it's not a simple thing. We can focus on those things. We have a large culinary department, but it's not R and D, it's culinary, right? So it's, it's culinary making sure that all those products as raw products we get are all perfect and it makes sense. There same thing. We opened the Middle East. It took two years, two years to get the supply chain just right to make sure it tastes just the same. Two years to do that. Took two years to procure the chicken. Two years to get all the ingredients right. There's a lot of stuff you can't import in. Plus it's very expensive to do that for them to import it in from the United States where we get it. Currently you have to spend the time to do that. So two years. People would look at that and say, man, you know, you should be open in a year. That extra year is going to cost you X amount of dollars. And I'm like, no, those X amount of dollars are going to make us more money because our sales are going to be higher because our food is in quality ingredients create, in a proper cook system creates craveable product. So like in the food business, like, and I say this to all entrepreneurs that are in the food business, like, whether they're wanting to open up or they have restaurants open, it's like your food has to be craveable. Like, meaning like, oh my God, I love that chicken parm from Craig's. So when I go there, I'm like, I want to go back and get that chicken parm. Other stuff on the menu is pretty good or whatever. I'll sample this to try different things because I like food, but I want to go back to that chicken parm. If they didn't have that craveable chicken parm at Craig's, I wouldn't make it a point to go there. There's so many good restaurants, there's so many great places you can choose from in la. There's so many great places that you can have good vibe and good atmosphere and good people. But that craveable product is what brings it back. And if you cut that quality. And I've had CFOs over time, not, not current CFO, but over time that have been like, hey, you know what, we just cut this just a little bit, you know, much money because it's a pennies business. Right. We're doing well if we make 10 cents on a dollar. But like if you start cutting a little bit here to save a penny and you start cutting a little bit here and a little bit here, it's death by a thousand cuts. Then your food one day is not craveable. That's what's happened to so many quick service chains over the years. They mess with their quality so much, then they lost the craveability. So then it comes down to just a cheap calorie option versus a craveable meal that I'm dying to go get.
- [11:56]
Nathan Latka
Yeah. The way Steve Jobs would describe that is like you want to make products that people lust over lust over. And so you nailed the craveable. Because I told you I brought my 13 year old daughter with me today and she's obsessed with raising canes and she doordashes it to her house constantly. She's definitely craving the quality chicken finger mills.
- [12:15]
David Senra
Todd Graves is obsessed about staying in the details of his business.
- [12:18]
Nathan Latka
He says the most successful people he.
- [12:20]
David Senra
Knows stay in the details of their business. He mentioned learning from a friend who runs a multi billion dollar shipping company and how that friend would pay attention to even how much his company was spending on bottled water. When I heard that, I thought it'd.
- [12:33]
Nathan Latka
Be a lot easier to do this.
- [12:34]
David Senra
If that shipping company was running on ramp.
- [12:36]
Nathan Latka
Something a lot of history's greatest founders have in common.
- [12:39]
David Senra
They know their business from A to Z and their costs down to the penny. Ramp makes doing this effortless.
- [12:45]
Nathan Latka
Ramp gives you easy to use corporate cards for your entire team.
- [12:47]
David Senra
Automated expense reporting and cost control. These corporate cards are fully programmable. You can set limits so the spending of your team never gets out of hand.
- [12:54]
Nathan Latka
Most companies only find out about excessive.
- [12:56]
David Senra
Spending after the fact. Like that shipping company with the rampant spending on water. With Ramp, you stop it before it happens. Matt Paulson is the founder of MarketBeat and he recently switched to Ramp. And this is what he said about it.
- [13:07]
Nathan Latka
Ramp is the best.
- [13:08]
David Senra
The amount of money you will save from unwanted renewals.
- [13:10]
Nathan Latka
And employees who think company credit card.
- [13:12]
David Senra
Equals buy whatever you want will far exceed the best credit card rewards program. Matt is talking about the importance of cost control.
- [13:19]
Nathan Latka
There is a line in Andrew Carnegie's biography that says cost control became nearly an obsession.
- [13:24]
David Senra
If Carnegie was alive today, he'd run his business on ramp.
- [13:27]
Nathan Latka
Take the time and set up a.
- [13:28]
David Senra
Demo of the product and you will see why. Many of the world's top founders are running their company on ramp.
- [13:32]
Nathan Latka
Go to ramp.com to learn how they can help your business today.
- [13:35]
David Senra
That is ramp.com so go back to.
- [13:39]
Nathan Latka
These people are giving you this advice like you don't know what you're doing. I know the answer to this, but I want to get it on record. It's just like your kind of personality type. These like history. All the same, if you tell them that you can't do something, you get the opposite reaction that you think you're going to get, which is like, it's just going to make you want to do it more.
- [14:01]
Todd Graves
Absolutely. You know, the best thing for a aspiring entrepreneur to be told is, I don't think that's a good idea. I don't think you can do that. People haven't done that before. Why do you think you can do that? Because entrepreneurs have something to prove. They have a vision, they have an idea, they have a passion. If you're an entrepreneur, you're passionate about what you want to start. You're like, I know this is going to work and you're so passionate about it. When someone tells you, you know, do that facial expression, I just, I don't think that's a good idea. Your first thought immediately is, you know what? I'm going to prove it to you. That is a great idea. And all those no's that you get, you just use that as fuel. It's like entrepreneurial fuel. It's putting gasoline on a fire because you have something to prove, you know, later in life now is, you know, I can take, you know, now that we're established and good, I can take, I can take those things and not let it fire me up. We still get at times, you know, like going into the, you know, going into different countries or like, you know, you know, like this mayonnaise type sauce, it's, it's much more popular as a, as a, as a dipping sauce. You're not going to be used for sauce. You need to add that. If I would have heard that in the early days, I said, you wait till cane sauce all that day out, you know, now I can say, hey, you know, actually we've had the same thing all over the United States. You know, ranch was popular out west and different things like that, you know, and we went into Texas, they said you had to have cream gravy, you got to have barbecue sauce, you know, things like that. And like. But through tried and true, over time, customers love the cane sauce. And so we want people to have cane sauce with our meal, not with ranch, because it's not nearly as good with ranch. And so then it can understand that. So you kind of call them later after you've proven yourself. But when you're getting started out, man, it is.
- [15:35]
Nathan Latka
You don't seem calm. You don't seem calm to me.
- [15:38]
Todd Graves
Yeah, there's nothing to prove people wrong.
- [15:40]
Nathan Latka
But I can feel your intensity over the table. So I, I, I'm very curious about this. Like, the, the hours that you're working now, 30 years in compared to the beginning. So I just flew to Austin. I got to spend five hours with Michael Dell. And Michael Dell's hilarious. He's been running his business for 41 years. He's one of the most impressive people I've ever met. Very calm and measured, but underneath, just a super, you know, relentless person, as you can imagine. And I was talking to him, I was like, hey, I heard you on a podcast one time. You said one of the funniest things, because somebody asked him, like, you know, when you were starting Dell in University of Texas Dorm room with $1,000, and you're going to take on the biggest company in the world at the time, which is IBM, like, that's so crazy. And they're like, how many hours did you work when you started your company? And Dale's face was like, all of them.
- [16:25]
Todd Graves
Literally all of them.
- [16:25]
Nathan Latka
He slept at the office. And so we had a long conversation because he's also, you know, he's married, he's got kids. And so he was just like, you know, at the beginning, it's intensity, but, you know, the value is the consistency and the compounding over decade after decade after decade. He's like, listen, I love my business. Because I asked him, I was like, all of a sudden, in July is.
- [16:45]
Todd Graves
Not a little bit hot.
- [16:47]
Nathan Latka
If I had your place in Hawaii, I know where I'm going to be in July. It's like, why are you here? He's like, I just love my business. So one of the things he gave me advice, he's like, listen, the advice for young entrepreneurs. He's like, I've seen so much over 41 years. He's like, you think you're going to be knocked out by a competitor? You're not going to be knocked. You're going to sabotage yourself. That is much more likely that you sabotage yourself than somebody else sabotaged you.
- [17:07]
Todd Graves
Absolutely.
- [17:07]
Nathan Latka
He's just like, so what you want to do is just like, you want to make sure that you're surviving to the next day. He's like, I work all the time.
- [17:14]
Todd Graves
Do I work?
- [17:14]
Nathan Latka
I'M not sleeping under my desk. And then he's like, he, like, you know, I have a team around me. When they say, hey, we have an important customer in Japan, it's like, do I? Do I am I do I actually have to be the. Are you sure that I have to be the one to be there? So this whole point is just like, over time, you're still working a lot, but you're not. It's not even fanatic because you're definitely fanatical. And I want to ask you about your great quote about that, but you're just, you're more measured. You're going to live to survive the next day. So what are you, like, how do you compare, like, the hours you're working now compared to when you started this thing?
- [17:43]
Todd Graves
So when I started up and I give young entrepreneurs this advice, I'm like, imagine how hard it is to start your business. Then multiply that by infinity, and if you're still committed to do it and you have the stamina to stick with that, then you'll be successful. Obviously, you have to have a good product and concept, and you have to have something that's going to work to make something go, which is often hard for people to see. The vision of chicken fingers down here in Baton Rouge was like, just chicken fingers, you know, just chicken fingers. Like, we like our plate lunches. We, we want variety, things like that. Like, wait till you have this product. And then when I was able to start cooking for them, oh, man, that is good. Then when they start talking about the next day, hey, man, you can cook some more of that. Yeah, yeah, come on by and have it. When you have to start up, there's so many amazing ideas by just promising entrepreneurs, but they stop. And the world never sees that product or service because it's so hard to open a business, then it's so hard to make that business successful. Then it's so hard to scale that business and grow. And if they just didn't stop and they knew how hard it's going to be, because I'm like, they're like, how do you have, you know, how do you have quality of life and work, life balance? When you're starting a business, I'm like, you don't. Flat out, you don't. You're going to live the business every day. You're going to think about the business every day. You're going to be tired. You're going to be fighting through a bad mood because you're not getting enough sleep and things like that. It's like you don't have it, so you have to be committed that you're not going to have it. Now once you get your business open and you get it established and it's working, then if you want to grow, then you're not going to have quality of life then, because going from 1 to 2 is your hardest step you'll ever have. Then 2 to 6 and 6 to 12, and all those growth phases are there. But I just wish people wouldn't stop when they go, because my hours in the beginning, when we started this restaurant, we were open every day of the week. We were open until 3:30am and except for Sundays, we closed at 3am and look, when we were closing up, it took us two hours to close down. When we opened up in the morning at 10:30, we had to be here at 8 in the morning. And so you get about three hours of sleep a night. I have my apartment right back here that would go up and then during the day we'd be like, hey, go take a nap, you know, go get a nap. Go get nap for like two hours and then wake up and come back to work. The hours were just all the time. It was just nonstop. And I was young enough to have that stamina, just a role. And plus this environment, I love this environment, cooking in this restaurant. While I was very important for me to be in this restaurant. So you could feel the vibe here. You could feel the soul.
- [20:06]
Nathan Latka
It's right there.
- [20:07]
Todd Graves
It's just here, man.
- [20:08]
Nathan Latka
You're not separated from your customers.
- [20:10]
Todd Graves
You're not separated from your customers. You're right here in the middle of this place that I constructed with my own hands. And it's like you just work.
- [20:15]
Nathan Latka
You constructed what with your.
- [20:16]
Todd Graves
This, this, this restaurant. I literally reconstructed all this with my own hands. Everything except the electrical. Because I literally don't know electric, electric. But plumbing. I did plumbing, I learned how to do plumbing, I learned how to do minor construction. All this place is resurfaced. I. So when you came in this place, it was a lot of different concepts, college concepts that just didn't work. But they layered on paneling. Even arcade was here, paneling after paneling. So rip off one layer of paneling and there's like, there's a rainbow stripe paneling going down this way because it was an arcade at one time and they had ripped up through this old paneling here on the wall, which was actually an Italian restaurant where it started. This was the outside of the building and they built this onto here. So when I pulled all these things off. I noticed this stucco all down the wall. But there was one little place I saw brick. I was like, oh, man, we can have a brick wall. So I started ripping it. Crowbar left, stucco down the side. And I got here and uncovered this old mural, and I look, I took it as a sign. Man, this was. This was an outside advertising for this bread mural for this bread bakery downtown Baton Rouge, where we actually started with our first bread at Canes. I came up with the recipe with. With the. With the bread purveyors there. And this was an outside advertising. Highland Road, going from downtown Baton Rouge through lsu, was the main core thoroughfare here. And Lulike took this as a sign. This is what we came up with, our logo for Canes. We took this design, like, I literally took it as a sign to say, this is going to be the Raising Canes logo. And that's what we ended up with. And, like. But I learned this stuff because I didn't have enough money. I got a small SBA loan for 90,000. For $90,000. I'd raised equity in a sense of, like, $60,000 with original shareholders. And I carried them over a little. They're a little bit of the business today. It's been fun being with them, I pray.
- [21:57]
Nathan Latka
One of the things I don't even want you to tell me if it's true or not. I want to talk about how you finance the business, because it's one of the craziest stories I've ever heard. But I just pray that today there is a boilermaker named Wild Bill that owns a couple hundred million dollars of equity and raise the case, because he bet on your chicken finger dream when you were, like, in your 20s.
- [22:15]
Todd Graves
He did. He did. Let me take you. Take you back a little bit on the start of it. So, you know, I worked in restaurants in high school and college. I love the restaurant business. Food symbolized love to me. So what that means is, like, when I could spend time with my mother cooking in the kitchen, she's the one that taught me how to cook. We cook Cajun meals, so we would make a gumbo, right? And you make a gumbo, you start with a roux, and you add your onions, and. And you really take all day making a gumbo. Now, does it take that long to do it? I don't know if it does. It's more about spending time with somebody that you love. And we're cooking for the family and our friends that we love. So that time together, and then you make A good gumbo. Then you sit down and all your friends and family like, oh man, that's a good gumbo. That's good. And they start talking about, I do mine a little different. I do this. And those conversations went, my, my grandmother would make me a pie, you know, chocolate pie. She come visit. I made your pie. You love. And I'm like that, you know, you know I love you. And so for me, restaurant and food and delivering food, it's. It's an expression of love. And then the camaraderie when you're working in a kitchen and it's rolling and drive throughs going, and I can work any position, but it's that teamwork and it's immediate gratification. When you're like, someone spent their hard work money or hard earned money and they give you their money and they look at that chicken finger box and they're like, oh, yeah, like, that's a good feel. It's immediate gratification. So much stuff with corporate work and administration work and things like that. It's not media gratification. It comes over time. My favorite job is if I can literally come in the restaurant and just crank out a shift. Like that to me is fun, man. That, that, that vibe, that right. Video. Yeah. When I can go, when I go to restaurants, I'll go, I'll go visit like a market and I'll go to one restaurant and I'll get all the crew to come there and we have like a town meeting. Hey, what? You know, my main job when I do that is saying thank you, y' all are doing great. Thank you so much. And then what can we do better? And I can get that out of crew and management. You know, it'd be like, you know, first they're a little bit like, oh no, the support's great. I'm like, yeah, it's great, but we're never gonna be perfect. So what can we do better? Well, you know, the uniform program be better if we could do this. That great. Let's get some input. Because you can get, you can get system wide really good, like things from focus groups, you know, with crew or management, and you get good stuff from surveys. But like when you actually talk, you can pull it out of them a little bit more and do it me. They feel comfortable and then they'll tell me, but then I'll work with them. And that shift, it's fun because you can just. Everything goes away. You're like focused on delivering good product and good service to customers. Right there. It's great. So I was in the restaurant business. And so like when I went to college, you know, I actually studied writing for script writing for television and film. I thought I might want to be in movies. But I always went back to business when I was working because I was that aboriginal kid in the neighborhood that had the lemonade stand. That was a kid that's going to cut your grass for 10 bucks. It was just always do like I'd set up like Halloween haunted houses in my house and like, you know, go around, put flyers out and five bucks for kids to go through. So I knew I wanted to be an entrepreneur. And that's when I got serious about it my senior year and I actually graduated. Went to University of Georgia, but I was from Batner's originally. I knew I wanted to come home and I had a partner when I started the business. Since we wrote the business plan for raising Cane's, it started off we're calling it Folly's Chicken Fingers. That was the original business plan. Terrible name. But we had a friend that was nicknamed was Folly. We called each other Folly. But anyway, we wrote that business plan and literally I wrote the bible of chicken fingers. Man. It was like I knew what our aprons would cost. I knew what, what would the cost. I knew what would college. I was college, just a college student. I knew what college students needed to make. I knew the environment they needed to work in. I knew what college students wanted to eat. I knew what price points they would pay for that. All these things. But, but, but that professor gave me the worst grade in class, which is classic, but it was only a B minus. The rumor went out that it was a failing grade and all this stuff is. But he was actually somewhat greater than. But he said no, the plan was great. Like, like literally you get the most detailed plan in the whole, on the whole class. But the concept won't work. And we said why would the concept work? Well, because you didn't study the industry. Well, told you study your industry. You know, McDonald's is adding, you know, they've been at it a long time and they're the best in the business. They're adding these menu items. They're this thing called veto vote. And people won't come to your restaurant if, if, if mom didn't want this. You know, they're also adding healthy items. You know, someone's going to want a salad in that and do it. And it's like, you tell that entrepreneur no, you're like, oh yeah, wait, I will prove it to you. Literally, I took that, and people thought that'd be discouraging, actually. Was that fuel? I will show you that this will work, right? So took that business plan, bought a cheap suit, went to Office Depot, bought. I thought the businessmen need to wear a suit. And I thought businessmen bought the briefcase.
- [26:38]
Nathan Latka
I had the same one.
- [26:42]
Todd Graves
Did you? Did you. But didn't you feel like a businessman? You're like, yeah, I went to school for business.
- [26:45]
Nathan Latka
You don't know anything.
- [26:47]
Todd Graves
No, man. You're going into a bank, which is pretty intimidating, right? You're like, these bankers and you think they know everything and. And literally brought it in and be like, you know, unlock the. The little safe, you know, combo.
- [26:58]
Nathan Latka
Was the combo.
- [26:59]
Todd Graves
I don't even remember what it was. Yeah, something like English, open it up. And it'd be like, here's business plan for you. Here's mine. Put the business plan down and proceed to talk about this. This. This chicken finger concept. I want to start at lsu. And look, everybody was nice enough, right? They're nice enough, but. But it was the. The banker's response was, you know, just, chicken finger. South, Louisiana. You know, that's not how we eat lunch and never heard of that. Well, hold on a second. Like, like, you know, you order pizza. You know, pizza's real, real, real popular, right? Yeah, yeah, yeah. You probably order the same pizza every time, don't you? What do you get? I like pepperoni or, like, whatever. Like, you get that every time. I'm like, this meal is that flavorful and craveable. You're going to want to get this meal over and over. Yeah, but if you don't have years of management experience, you know, you probably should go work for, you know, great companies. I mean, good things done. You go work for Brinker for. Then you'll really know the business. And then you'll have some money and. And then da, da, da. And then you'll be. You'll be bankable at that point, you know, they're like, because you have no money, right? I'm like, no, don't have any money. And they're like, you know, you can't get a loan. You can't just get 100% loan, which I thought you could do, but with every. No, I got. And they were nice enough. I will give them credit for that. And they were nice enough to take the meeting. Maybe there's some kind of law that you have to actually see somebody in their business plan. But then that, like, I was like, man, I need to go make money myself. And so Through a friend and friend I got a job as a bowler maker working in refineries. Louisiana has a lot of refinery work. And so what it is is turnaround shift work.
- [28:18]
Nathan Latka
This is super intense work. This is like 95 hour, is 95.
- [28:23]
Todd Graves
Hour work weeks, man. So what happens is they'll shut down a certain sector of an oil refinery and they're missing out on production, man, which is just big, big money they're losing. So they'll pay for you to work non stop. They'll pay whatever it needs to get that thing back up and running. So you go in and you fix things, you put new equipment in and things like that. So you worked 95 hour weeks and you just work straight through. There's no, there's no days off, there's no nothing. You just work straight through. So there's overtime, there's double time. There's some kind of crazy thing, you know, that goes into another level so you can make a lot of money a short period of time. And that was the first group that was encouraging to me on my chicken finger dream because they could see me working hard on something. I don't know what I'm doing, but I'm willing to do whatever, earn my money when I'm out there willing to take on any job out there. And they're like, Todd, you're gonna, you're gonna. Well, they called me Hollywood. We all had nicknames. Interesting story on the Hollywood deal, but we'll leave that out. But, but so, so they were encouraging and Wild Bill tolar that we all nickname. So while Bill was like, like hey Graves, man, you know Hollywood, you know, I see you got what it takes, you know, but if you really want to make some, some money and it's, you're not, you're not afraid of hard work. But this is a really dangerous trade. I fish in the summers. Commercial fishing sockeye salmon in Knack Knack Alaska. He goes, you can go up there, get a job. You make a lot more money doing that than you can't bore making. So I was like, well what do I do? He's like basically get up to Nakneck, Alaska. I'm like, where is that? He says, above the lucent chain. Look it up on a map. Back then you couldn't look on the computer. You actually had to pull out a map. Buy an Alaska ma. And so look, I called a plane to, to Anchorage. I called a float plane to King Salmon, Alaska. I hitchhiked to Knack Neck, Alaska. There was no Uber back then. Literally hitchhiked in set up in tent city where people go to get to before they have a job to get set up in tent city. Put your tent out on the tundra, by the way, and you go around to the boats and you ask them for a job. You're basically a greenhorn. It means you're a rookie out there.
- [30:10]
Nathan Latka
You have to convince them to that.
- [30:12]
Todd Graves
You get on the crew, that you can get on the crew. Right. They're looking, they're looking for some help. Just a few boats. Most people are all staffed out but a few of them needed just a greenhorn that they could pay a lot less. Right. You get a cut of the, of the, of the take for the boat. But I ended up getting a job on a boat that summer and had the wildest experience. Commercial fishing for soccer. Salmon in Alaska, man, we were on 32 foot boats as regulated. You couldn't keep going out to get the salmon. So the salmon born in a stream, they swim out the ocean. Socket Salmon live it out in the ocean. Beautiful silver fish for like five years and somehow in five years they know it's time to swim back the original river, go up and spawn and then they die. It's a crazy cycle. So they come during the peak of the season. They're just rushing into these, to these same rivers. You catch them but you can't continue to go out. There's a loran line back then and you couldn't cross that line. So if you set your net, skill net, if you set it up in front of another boat's net, you're going to catch three times as much because you're catching the first fish coming in. So these captains make their entire income just during the summer. So they're heavily motivated to, to catch that perfect set in front of that other boat. So you played chicken and literally somebody veers off. In the end someone chickens out and sometimes you don't. And we rammed boats, we got rammed. It was crazy. We catch so much fish around like six foot seas in a 32 foot boat. And the back of the book gets weighed so much down with salmon before you get unloaded to a tender boat out there in the ocean that literally you'd be like getting waves over the side. Some boats sunk when it was gone. It was, it was just unbelievable work. We worked 20 hour days during the peak of the season. It was about two to three weeks. And when you work 20 hour days you only get like a nap here and there. Like you get, hey, go take a nap real quick. You get an hour. Get this. Or we get a break to eat real quick. You're so exhausted that then you stop being careful. So people were thrown out with nets they would not hold on the boat when you're getting a bad wave and they crack their head open, their skull open. So imagine this. You're out there fishing, you're getting ran by boats. You're picking fish. You hear on the radio, somebody, somebody just got scalped. I heard that distinctly. Scout. I don't know how they got scout from the boat. So medical helicopters are going in, National Geographics coming over, filming the boat. Action. And I'm out there for this chicken finger dream. Nothing was going to stop me from doing it. And sure enough, made good money doing both bowler making and doing the Alaskan fishing trade. Came back. I lived off credit cards because I had no other income before we get there.
- [32:25]
Nathan Latka
So there's this reoccurring theme in all these biographies. There's a story just like this. Now, your story is pretty extreme, and you tell in a wonderful way. And the way I summarize this is, like, how bad do you actually want it? And like, you have to actually ask yourself, like, if you're going to compete against Todd Graves, are you willing to work 95 hours a week for a boilermaker after the. After you buy your suit and your briefcase.
- [32:45]
Todd Graves
And they're like, get out of here, kid.
- [32:46]
Nathan Latka
We're not getting worried. It's like, that's fine. I'll find another way. 95 hours doing shift work in a boilermaker. You're going to take a flight to Alaska. You're going to hitchhike. You're going to live in a fucking tent.
- [32:56]
Todd Graves
Right before I got the job, trying.
- [32:59]
Nathan Latka
To convince captains of boats that you could die on to hire you and then to do that and then to work 20 hours and the entire time. What I love about your story is it's like, I'm not thinking about sockeye salmon. I'm thinking about my chicken finger dream.
- [33:16]
Todd Graves
Exactly. I would have worked construction in Nebraska. That's what paid. I love the fact that I went to Alaska and did that and did something as cool as. Sounded like a bowler maker, right? But I would have worked. I would have gone and knitted blankets if that's what. Where the money was at. Anything I could do to make the money. Because I was determined, man. He was like. Like I was like a nerd in the entrepreneurial club in college. Like we had. And people would start up, hey, I got this. You know, like, I steam clean floors. I Do these different things. But I saw these. Some of these entrepreneurs have these really cool ideas, and that's when technology is really rolling. But they would just stop, you know, a couple years in college and be like, ah, just. I don't think I can do that and do it. And I'm like, that's the key, man, is when you set a goal, you do it to success or failure, but you don't stop. You don't stop. Actually, with my original partner, we went out to a camping trip in North Carolina. I'm like, we need to make this like. Like, we're going to go in and we're going to camp and we're going to literally commit to this. Because, like, you set an oath that you're not going to ever, ever stop. Then you don't stop. Because during the time, man, there's two years took me to raise money for this. Two years.
- [34:14]
Nathan Latka
Tell me, wait, I love this idea. Run that back to me. I just did this episode on Elon Musk, and he has a great mantra. He's like, retreat is not an option.
- [34:22]
Todd Graves
Retreat is not an option. Burn the ships.
- [34:24]
Nathan Latka
We are going to succeed or I'm going to. He's like, you will know when I give up, because I will be dead.
- [34:30]
Todd Graves
That's the spirit. That's the spirit.
- [34:31]
Nathan Latka
That's the way he went on this camping trip to do an oath.
- [34:34]
Todd Graves
Yeah, he was literally. Literally. It was literally to say, like, around a campfire. I mean, we. We did everything but just like become blood brothers, you know, to do the deal. It was like, we're gonna do this, right? We're committing this. We're gonna make this happen. We're gonna see it through and somehow doesn't work. We're gonna die trying and literally put that on the line. Going out and fishing. Alaska. People died in that. In that fishery. God bless them, you know, and it's just that. Anyway, I think another thing too is, I think when you have that relentless focus. So for me is during that time, I was like, I came up with a quote, man. I was like, nothing ever happens unless someone pursues a vision. Fanatically. Like, you have to be so fanatical. When you have a dream and others don't believe in and you see it, you have to be fanatical. So fanaticism, what carries you through, you know? And so I see this fanaticism and I study people, right? And so, like, like your podcast, I hear things and I'll get reaffirmed with things, then I'll learn new things. New ways I can look at things to do. But it's great, you know, And I like it too, because it's like you can learn from it and you can get inspired by it being established because you need that. You need that fuel to keep rolling. And it's good to hear other people are doing what you do, and then you learn from other people. I'm constantly student of the business, so it's like you learn other things from businessmen and business women. But for me, too, is I love to be around celebrities. Like the people that are successful at whether they're an entertainer, whether they're. They're actor, actors, athletes, whether they're athletes. They all have this common core. And you know what I see the most common core of all the people that are successful for me, is they're never satisfied. Never satisfied. And so we care that in our business about never being satisfied. But it's a bad way to say it so that you say never satisfied. It's like, well, y' all aren't happy what we did, you know, with this opening. No, no, no. So we change the word for never satisfied. It's like we're always going to raise the bar. So we'll raise the bar. So we did great at that opening. That was awesome. These were all the good things we did. But you know what, too, is these are some of the things we can get better at. We can actually get two seconds faster, you know, and this is how we're going to do this. Look, we needed to staff more. We messed up here. We didn't give enough support because we wore out a crew. We should have had more crew members on staff. You can always learn. So I see that with people, and I see it with the best athletes. I see it with the best actors. It's like, that film was good, but, man, I could have done this better. I could have done that better. And then, like, if you don't wrestle, then you're always going to keep striving to get better and better and better. It's like competition. I love competitors because they make you get up even earlier in the morning because it's like we got other people that are gunning after us.
- [37:00]
Nathan Latka
You said the funniest thing. So one. I think one of your most important messages is like, we need more founders that refuse to sell their businesses like this. There's this huge entrepreneurial industry that didn't exist, especially when you were starting your company. And the entrepreneur industry is influenced by investors, not entrepreneurs. It's like, start, scale, sell. Then what Then what are we going to do? You have a great line where you're like, if you create and do, you never want to stop creating and doing. And now you just sold the vehicle that you created and do and create into.
- [37:30]
Todd Graves
Right.
- [37:30]
Nathan Latka
And so then what? Then you're working on your second best idea or your third best idea. And I think, like, one of the most important ideas that you have is just like, everybody in your business. The reason I said this on the episode I did about you, Todd's smoking them because he's competing against corporations. All the. Who are the founders in your business anymore?
- [37:48]
Todd Graves
That's right.
- [37:49]
Nathan Latka
Like, they're. They're either dead or they sold out. And then I loved. Somebody asked you the question where, like, out of, like, the competitors, like, who get you fired up or maybe will keep you up at night, and you're like, and they may never exist, but they will exist in the future because, you know, that same personality type as you, they're coming. It's like the young Todd Graves that has that fire in his soul, and he wants to do exactly what I'm doing. And you're like, that's fine. But you have to understand, this is what I do. This is in my DNA. This is. This is like, this is how I feed my family. So if you want to come, just understand, I'm on this 247 all the time.
- [38:24]
Todd Graves
You better be ready. Yeah, you better ready, because I'm coming after you.
- [38:27]
Nathan Latka
I just saw you at the ufc. Are you a UFC fan?
- [38:30]
Todd Graves
Yeah, I like all sports, you know, and so Dana invited me to come and get to see Poirier dude, his last fight, Louisiana Legend, man. You know?
- [38:37]
Nathan Latka
But seeing those guys, like, it's the same personality type. So the reason I bring that up is because you were earlier in the conversation, you were breaking down on, like, the species of bird and, like, when it's. And, like, the amount of detail you just explained to us, the thought I had in my mind was not about chicken finger. This is an important point you're making. It's like the same personality type just pointed at a different endeavor. Jon Jones, you know, probably the greatest UFC fighter. UFC is the only sport, like, I'm obsessed with, and I watch all the time because I don't have time to watch anything else, but I can watch one pay per view a month and have an understanding what's going on. And I heard him. He said the same thing that you said in that interview. It was like, oh, you want to come compete with me? This is how I feed My family. And he was fighting surreal gain. He's just like, you know, and he was studying him just like you and understanding the detail. And he's like, I know what he does when he wants to go left and when he goes right and everything else, he goes. I assume that this guy's trying to destroy my legacy and trying to take the food off my family's table. And I will not allow that to happen. The same level of intensity that you're.
- [39:30]
Todd Graves
Applying to your business. Absolutely, man. If I got somebody coming and compete like you're competing with me. My livelihood, of my managers and my crew members depend on this restaurant. Right? You can come in, you're coming, you're open across the street here. These people feed their families off this. We're going to go at it. You better be strong because we're not going to give up, man. And look, I've done this, I've done this for 30 years and I'm just as fired up as I was the first day. It never leaves you. You know, it's, it's a blessing that entrepreneurs have because when it's so hard to start your business, you gain this great sense of appreciation. Appreciation for your crew that are working so hard beside you. Great appreciation. Customers coming in, paying their hard earned money to do this. Appreciation for compute communities that embrace you. So that sense of appreciation, which is what our culture is all built off of, 100 off appreciation is. It never leaves you. You always feel appreciative, so you always want to take care of people. It's like, comes in, people are like, oh man, you just. To sell the business worth all these billions, you can just not worry, da, da, da. I'm like, yeah, well then, then what happens? What happens to my management who support their families? What happens with the crew members that come up? Because if I sold the business, you think they might have the same values. I mean, really hard to find find so, you know, a buyer that would have the same values that I do and that I believe and have that deep sense of appreciation. They bought it for this, they want it to be worth this because they're probably going to sell it themselves. They're looking as an investment, not a vehicle to help people. And so I think when entrepreneurs go, and then you get successful and then, then you grow the business and then you're successful at growth and you create something, it goes to a level. It goes from fanaticism and passion and a dream. Then you get purpose. And so my purpose of, of raising canes is, well, God made Me good at chicken fingers to help people. And what I mean by that is I have 75, 000 crew members. We have so many part time people that work. I love part time quick service crew members that come in, we have an opportunity. It's most people's first jobs are restaurant retail. They had to come in, learn values, man. What are those values? Hey look, we're going to work hard, we're going to have fun, we're going to deliver great customer service. We're going to deliver that craveable chicken finger box. Why? Because people are spending their hard earned money here. That's why we're going to do that. And what we're going to do with the money that we make, we're going to help out our communities. We're going to give that to people. And as we scale this business and it grows, this thing's getting into values of billions of dollars. And someday when I clear debt, I'm like $3 billion in debt. Now eventually with our growth, you know, as we go, God willing we'll go and then we'll be able to pay down debt and we'll have. When I have this free cash flow coming out and doing, we're gonna be able to help people in a big way. I can't wait for that phase of our business. But that's purpose, man. So you start realizing it's not what you make, it's what you give. That's a better way to keep score. So when you have that purpose and what I want people to do is to keep that purpose. Because too many great restaurant entrepreneurs and founders of the business, especially in the restaurant business, they sell. They sell. And look, they're so passionate about it and they talk about it like, man, I have the passion and I love what I do, da da da da. And then all of a sudden they sell a majority stake of their business. Because private equity is so good at putting that package together. Generally the numbers are 5 or 10 million because entrepreneurs put everything back to the business, growing it. They prove in a successful model, either regional or they prove it out in different regions of the country which then make it a national. Multiples go up and they're like, hey, we'll come in, we'll give you, we'll give you 5 million or we'll give you 10 million. But they take controlling a business and these entrepreneurs are like, oh my God, we've struggled so wrong. We're still living by means. I got debt, I got all this stuff. They, they will sell and then they Lose control of the business. And if you're private equity and private equity serves a lot of good purposes, they also serve some bad purposes. They take founders out of the deal and so decisions get made differently. So a founder is powerful because a founder is their baby. It's personal to them. It's personal. So for me to today I read customer comments and look, we don't deliver every time we will screw up. We'll have somebody that was rude, we'll have something that messed up their order or something like that. I take it personal. My family, I take it personal. I'm like, you spent your money here and we didn't deliver on that promise. I don't know. Private equity really cares because it doesn't affect our overall sales. It's a small percentage of what we're doing is. But your personal, that your crew is personal because they're working their ass off to fulfill your dream. And you're sitting there and you're in a good financial position. But they're busting their butt. Butt management's busting their butt. Crew members are busting their butt. I know when I'm working at 3am and I'm like, oh man, I'm tired. I'm going to bed. I know this crew member's still closing up somewhere around the country, right? Somewhere around the world, somebody's closing up that, that way. And it's that appreciation. So when you lose that founder personal that this is their baby, you start making the wrong decisions right now. You really do. And so, so private equity, they have their shareholders and they have to make a certain amount of money. They're not getting the returns on their dollar. They'll make other decisions that will go, maybe they price, maybe they raise their prices. And maybe it's not the right time to raise their prices. Maybe they cut their quality. Maybe they cut wages for crew. Maybe they do it. Maybe they don't do the bonus plug. Their programs aren't as good as the year before. All those things start to make the business not, not special, you know. And so I just, I just encourage people, don't, don't let money be one of your, your major goals. Because if it is, if it is, you end up leaving a shallow life. You know, you end up, you end up, you end up saying, I need that $10 million, but you lost control of your baby. And then it's not special anymore. It's not worth the dollars. Stay with it. Grow, learn. Bring in other people to help you business. The things you need help with. Learn it and do it properly can come in and say, hey, look at the staffs we have in finance, accounting, it, and all these things that you think are too hard for you to figure out. It's not too hard for you to figure out. They had to figure it out too at one point. You know, you can figure that out. Bring in some great people, stretch yourself, hire those people, bring them in. Learn the details yourself. I'm not good at it, but I know enough to work with great people to still add value. That makes sense. I just wish founders would. Hold on, hold on. Don't get rid of it, man. Like. And why would you? If it's something you're so passionate about? Find that purpose. Find that purpose.
- [45:23]
David Senra
The best leaders in business are able to spot patterns, but you can't spot patterns if you can't see your data. And most businesses are only using 20% of their data because 80% of your customer intelligence is invisible, hidden in emails, transcripts, and conversations. Unless you have HubSpot. HubSpot is where all of your data comes together so you can see the patterns that matter. Because when you know more, you grow more. And that is a pattern that never fails. Visit HubSpot.com today. That is HubSpot.com.
- [45:53]
Nathan Latka
I think that's one of the most important messages that we could possibly get out there. There's two things. I have this idea, this maxim of anti business billionaire, which I'll get to in one second. But what I'm trying to do is exactly. Trying to, like, bring attention to exactly what you're talking about. It's like, we celebrate the sale, but we don't. It's like, what happened to the guy for the rest of his life? Is he still happy about this? And so, you know, Trader Joe's, right? The founder of Trader Joe's. His name's like Joe Colombo or something. I can't even pronounce his last name. He did such a wonderful service to future generations of entrepreneurs because he writes this autobiography that's excellent. And he tells the story of Trader Joe's. 90 of the book, okay? He. He wound up selling Trader Joe's in, like, the 70s, okay? And he lives for, like, another, like, 40 years. 90% of the book is. This guy is so fired up. He loves Trader Joe's. He came up with a new concept. 90 of the book is just talking about how amazing Trader Joe's was. All the different ideas. He's the same personality type that you had, right? But he made the mistake that you didn't. He got Scared there was a bad economic climate. He wound up selling, I think it was to Aldi, which still owns the business today, if I'm not mistaken. What's fascinating is just look at the time and effort he dedicated to Trader Joe's in the book. And then the last 10% is, yeah, I invested in some real estate. I did some consulting. And it goes from like, this guy's fired up every day, I'm in love to I sold my baby. And then it ends. The last page, he's like, I have to tell you something. I was not true to my own self. I regret selling. Thank you for listening, Joe Colombo. Okay, that's the last page. The book is published. He dies the same week.
- [47:33]
Todd Graves
Gives me chills.
- [47:34]
Nathan Latka
Think about that. Yeah. He's like, don't do this. I should. I wish I had the courage. I wish I wasn't so scared.
- [47:40]
Todd Graves
I wish, like, what a good man to just be honest right to everybody. And I wish I didn't do it. Because he wants to inspire people not to make the same mistake.
- [47:48]
Nathan Latka
Paul Orfalia, the founder of Kinko's. I did an episode on him too. He thought, oh, I sell for billions of dollars. I'm a success. He's like, I can't even go in the store. I can't look at it like, I got the money, but like, I don't have exact the purpose. I love the word, the word that use purpose. So this is something I'm trying to draw attention to on founders podcast. It's like these anti business billionaires, right? They're not in it for the money. Somebody like James Dyson, like a Steve Jobs, like an Avon chouinard from Patagonia. It's like, these people are just like you, so obsessed with the quality of the product that they are making, right? That is the main goal. I'm going to make the best in the world, right? Then they retain control. And the point I make on this is one of my favorite maxims from the history of entrepreneurship, comes from Henry Ford, who also owned 100% of his business. 1919, he owned 100. He bought out all his old investors, owned 100% of Ford Motor Company. Right. It's very equivalent. It'd be like owning a $20 billion company today. He says money comes naturally as a result of service.
- [48:45]
Todd Graves
Exactly what you said.
- [48:46]
Nathan Latka
Stop fucking worrying about the money. If you just can you make somebody else's life better through an act of service, then keep doing that and then figure out a way to scale up to serve more people and Guess what? The money will come automatically to you. So the anti business billionaires is they put the quality, they're obsessed with the quality of the product they're making. They retain control. And guess what? If you obsessed with the quality of the product you're making and you retain control, you wind up with the money anyways.
- [49:09]
Todd Graves
Absolutely. If you do things for the right reasons in business, money will come. Yes, 100% money will come. You know, just like sales driven. Do you going to be, do you want to be profit driven or do you want to be sales driven? Sales cures all woes. You can raise your sales. We're number two on average unit volumes in quick service restaurants. Chick fil a than us. And I think McDonald's might be a million behind us per unit per restaurant, all the way down to a lot of our competitors are like a third of what we do, sales wise. But if you're sales driven, you're going to do exceptional customer service. You're going to have more people on shift, right. And then cutting it shorter to try to save labor. You're going to need highest quality products to do craveable. All those things that you do that do that, then you end up making more profit because you have more sales, you have more happy customers, you have more repeat business volumes. And you get the volumes and you get flow through dollars and you make more money.
- [49:59]
Nathan Latka
This is where the finance industry gets it wrong. And I think Bezos said this perfectly. He's just like, no, no. Over the long term, if you put the interest of customers first, it is the interest of the shareholders. It just takes longer. But that's where you actually create the value. That's like serve the customers and then your shareholders make plenty of money.
- [50:16]
Todd Graves
The dollars. Yeah, the dollars are coming. It's proven time and time again. And I'm an example of that. We talk about entrepreneurs going to a certain point. They get, they get scared at certain times. Great example is Tony Tang Chicong who had Jollibee, right? So Jollibee is a Filipino concept and he was a like engineering student. He explained to me, he said, look, if you were smart Filipino kid, your parents were like, you're gonna be an engineer. He's like, I hate an engineer. He goes like. But one time he went and looked at a dairy to see the engineering behind doing a dairy or whatnot. But they had a little ice cream shop up front. He goes, that's what I was interested in. I was watching them do the ice cream and run the register. So he started an ice Cream shop. Then he added a burger. Then he had a spaghetti crazy, crazy menu and became this, this, like, success. He opened that one little ice cream shop, turns it into a restaurant. Then he starts growing it. So he's like, my goal, I want to be the largest restaurateur in the Philippines. So he set on his goal. He has his fanaticism. All of a sudden, McDonald's announces, We're going to. We're going to the Philippines. They saw success that he was selling all these burgers. And his accountant and his people were like, you gotta sell. You gotta sell. This. This concept's amazing. McDonald's started in the U.S. they're just gonna blow us away. Sell now you're gonna make all kind of money. You can live the rest of your life and be happy. He's like, no, I won't be happy. I like what I do. And he said, what do I do? He said, made me nervous as hell, right? And bean counters will do that. And they were showing them what could happen. McDonald's put him out of business. Could be a millionaire or, you know, or he could be worth nothing. They put him out of business completely. He said, you know what? It. I'm going to put the goal. I'm going to beat McDonald's and I will be still be the largest restaurant in all the Philippines. Well, he did that. McDonald's came in, he blew them away. He grew all out through the Philippines, get the largest restaurant in all of all the Philippines, set his next goal, right? Fanaticism, right? I'm not stopping there. I want to be the largest restaurant tour in all of Asia. Think of all of Asia. He did that. He did acquisitions of other restaurants and did his largest restaurant on tour in Asia. Tony, what's the next goal? I want to be top 5 largest restaurant tour in the world. World. This is what I want to do. And this is the big boys. This is McDonald's. This is all the big ones. That's his next goal. But that fanaticism keeps on going versus getting scared. It's okay to be scared. It's actually a good thing. But then say, I'm fanatical. I'm going to beat it. I'm going to see it. And so I wish just more entrepreneurs would do that, because so many things can be out there that can scare you. So many people are going to tell you, believe in yourself like you always did and don't give up. Don't give up. If you didn't give up when you started, that's the hardest part. You didn't give up. When you're growing and I deal, that's the hardest part. Don't give up now. Go, go. And you don't need those other things because if you lose your baby, maybe you lose purpose, then you lose purpose in life. There's other things to do, but it's not your passion.
- [52:41]
Nathan Latka
Let's go back to how you're financing this one. And then I want to go to how you finance the next 28 and that insane story. So you got the wild bill, you got the refinery money, you got the sockeyed salmon money. Now you're playing credit card roulette.
- [52:55]
Todd Graves
Yeah, yeah. I had to do it the whole time when I graduated. Right. I mean I bartended at night when I was, we were working with build business plan and then, you know, next, then, then trying to start the business. I'm literally, I don't have any, any income. So I'm just, I'm living off bartender money from tips at night and then literally back then too, you could get credit cards. There are 18 to 22% interest rates and you can get as many as you wanted with $5,000 limits. So that's just what I did. I just sent in, yeah, I have a job bartending and okay, well sure, here's $5,000 credit line on this deal, but you're going to pay 20 to 22% on that. And so I just lived off of that. And you know, so what I did was I had enough money my own to come back, back and to live off of and put into the project. At that point I was able to raise some preferred shareholders and I raised maybe $60,000. These were people.
- [53:36]
Nathan Latka
So these would be called like angel investors.
- [53:38]
Todd Graves
Yeah, yeah. I mean they were, you know, these are like my bookie guys. Well, guys I worked bowler making. Yeah, yeah. Can you take this ten thousand dollar investment in cash? I'm like, sure, yeah. If I get the bank, I'm like, came from my investor. But I was able to raise that and I was able to get a, I was able to get a, a $90,000 SBA loan and it was enough money to, to, for me to come in at this place, Northgates, me, lsu. I had a wonderful real estate broker, one of my mentors, Mr. Red Reynolds. This place had flipped over so many different times and he was like, I wanted, I went for the landlord landing Tula arbor. She was 94 at that time. To have something solid. I believe in you. I believe in your fanaticism. You will make this work. So I'm telling her to hold it. Basically held the location for a year for me. Me.
- [54:24]
Nathan Latka
How impactful those words of encouragement. Cuz you're, you're young, like somebody you respect.
- [54:30]
Todd Graves
That was just a good man and a really good, good real estate broker. I really respected that because he saw that it was affirmation that while I was being so fanatical and trying to talk everybody into it, you know what I mean, except for the bullet makers. He believed in me. I'm like, okay, okay, that's, that's his little wind in my sales to do this. And basically told her, hey, it's going to take him a year to put all this together. But I believe you'll do it now. I believe you have a long term tenant. Look, sure enough, we've been here for almost 30 years and we got like 100, 100 year lease going forward. And the family, she passed away. But the family's like, no, you know, I'm trying to buy, they're like, we just have pride in this, you know, so we'll just keep doing, to keep doing a lease. I said, but we'll give you 100 years, you know, and options to stay in this original location.
- [55:10]
Nathan Latka
Do you, do you buy the real estate now for the new storage?
- [55:13]
Todd Graves
Wherever I can. Absolutely. Wherever I can. I do just, just good real estate, a quality real estate. It's just there's so many people that own it. It's part of larger shopping centers, developments. A lot of it's in trust, you know, family trust and things like that. But everyone I can buy, I buy. Absolutely.
- [55:27]
Nathan Latka
We'll tell you this one though.
- [55:29]
Todd Graves
No, no, no, they, they like being a part of it. Right. You know, but they give me a good, I got a good lease term on here and plus you know what I put into this place, like I had to learn things, you know, like I said, I had to learn plumbing, I had to learn construction, I had to learn the stuff I didn't have. I really didn't have a lot of money too to come in and, and, and, and, and spend much money on this. But this place is sacred, man. I can tell you every square inch. And later on after, after we get done with our discussion, I'll show you all these little points of this. This is original furniture that I went, I got a U haul, went around to all these equipment supply stores.
- [55:57]
Nathan Latka
Oh, it's bed sheets that look like this somewhere.
- [56:01]
Todd Graves
That's a damn good idea. Maybe some pajamas too. Right, but, but, but it means something, right? And keeping this like this, like, like this. I can bring in management to here and show them this place. We have big, pretty buildings, all functional, everything. They come here and go, this is our soul. Just remember, this is, this is where we started. And we got to keep that spirit going here.
- [56:19]
Nathan Latka
Dude, the one in Miami beach by my house looks like a nightclub.
- [56:22]
Todd Graves
Yeah, yeah, yeah. It's like literally the deal. I love that location. It's huge.
- [56:25]
Nathan Latka
So credit cards, SBA loan, you said it took a year for the development of. So you had the lease before you open it?
- [56:32]
Todd Graves
Yeah, yeah, no. So they didn't sign the lease. That doesn't hold it for you. Right, so. But this location was available and I knew it was going to be awesome. It took two years, two years from the business plan to where I actually opened up the restaurant. Took me two years. And so literally, from writing the business plan from class, going to the banks, getting turned down, working in refineries, then working in, in Alaska for the summer, then coming back that fall and we opened in 96. So it'd be the fall of 95 when I got back then. So I had had some money on the deal. I went, got that SBA loan and got, got the investors. And from there then we started the construction process. We started getting the used equipment and look at the equipment. I went, I got from, from. I went into Houston and Dallas restaurant supply houses because, you know, restaurant businesses go out. 9 out of 10 go out of business. I could go buy stuff and I'm like, I need a fryer that'll work 60 days. Like, give me your cheapest fryers. They had to be 85 pound fryers. And they're like, well this one's good. Like, yeah, that's ten times as much. Like, I need something to last. Because I know as soon as I prove this will work, I know I can get another loan, you know, okay, thank goodness we made money. And so we, when we opened up, like, I was, I was so excited. We reconstructed, we're ready to open up. We got, got registers back to Office Depot. There's little registers. And once they figured out how to program them, I went and started waving people in the restaurant. And people came and people liked it. And man, we made $30 the first month. That's what we made. People like, that's all you made. I'm like, no, dude, that means I could pay my crew, I could pay rent, I could pay, you know, literally payrolls taken care of, I can pay the vendors. We're working. And steadily off of that. We started Making more and more money. I could replace equipment as we went. Just basically dumped everything back into the restaurant. And sure enough, and I was like, like, like, this is working great. We can go to the other side of campus and we can go in and do that. I brought the business plan to the SBA lenders that did us. And I got to that one. Literally 18 months later, I was able to buy the piece of property, construct a new building and open up. 18 months after the first one. It took two years to start this first one on a shoestring budget. The second one, I have a piece of property and I got a brand new building that we opened up, and it showed efficiencies there. And what was really amazing with that location is that it was on the other side of campus. It also had traffic flow from neighborhoods, office buildings, things like that. So we had not just students coming in all of a sudden. We had, you know, businessmen and women coming in for lunch. We had moms and dads picking up food on the way home. We had T ball teams on Saturday. We had church groups on Sunday. And that's when I got the vision. I was like, this isn't just a college concept. What I thought it was. If I just work for college kids, I'm like, this works for everybody. And that's when I got that fire man to grow at that point. That's when I got the vision, man. And the vision that point was. And it wasn't, it wasn't articulated this way, but what I wanted was locations all over the world. And I'm like, I want to be known as the brand for craveable chicken finger meals. Great crew, cool culture, and active community involvement. Like, those are the things that turned me on with that deal. Right?
- [59:18]
Nathan Latka
What do you mean? It wasn't articulated that way?
- [59:19]
Todd Graves
Well, so I just, I thought the vision was there. I just didn't put it down. And so I'm like. I asked myself, you know, it's like, I was like, you know, why do you want location all the world? I'm like, because I want to go in every community. Because I love hiring people to come in and build teams. Teams creating opportunities, job growth, teaching them values. And I'm like, man, he's like, like, I get. I get turned on by customers coming in and. And loving the food. I'm like, and I'm gonna keep giving them quality chicken finger meals, that craveable product. And I was like, now I'm able to give money back to the community. I'm like, and I want to be able to give money back to the community that actively involvement. I'm like, but we have this cool culture, man. I want to. I want to emulate that. Other places. I want to be the place that. Look, I worked in the restaurant business, high school, college, man. It was like. Like, it was not positive motivational management, man. It was like, do this, do that, you know, like, you screwed up. Yeah. It was the crowd. There's no music in the kitchen. Can you imagine working back there? It was just negative environment because the manager was. Was negative because the owner didn't appreciate everybody. You know what I mean? So it was just this negative feeling. I can get people from other. Other. Other restaurants where they're not treated right, and they're not, like, giving good customer service. They come here, they're treated right. They have a good environment. We've got music cranking the kitchen. We're having fun. We're a team. And it's positive motivational management. It is like, good job. Hey, thanks. Thanks for. For taking the stuff out to the trash out to the dumpster. Wow, that's good, Toast. Hey, good job on the ship, man. That's how you motivate people.
- [60:37]
Nathan Latka
Praise costs nothing and means everything.
- [60:40]
Todd Graves
Means everything. Absolutely, man. And it's teamwork, and it's good. And also, too, is why I like operators is it's like when I was on the football team, it's constant coaching. Oh, yeah, it's good. Pass. Oh, man, you screwed that up, man. Like, make sure your arm goes back and, you know, hey, block harder. Do this. You know, like, you're getting constantly coached, and nobody takes it bad. No one takes criticism bad because it's all about doing better, winning the game. It's all the same thing. In the kitchen. You're like, hey, man, Toast. Toast needs to hurry up. Da, da, da. Hey, great. That's great, Toast. Like, you can mix those things in the corporate environment, and this is how you get weeded out of Cane's. Corporate is the people that can't take constant coaching. And it's coaching, right? You know, it's like, well, no, we should meet every six months on a. The eval and how we're doing and blah, blah, blah. And all that stuff is like, no, Every day is an eval. Like, every day we want to get better. And a lot of corporate people, one, if you make mistakes, like, I encourage make mistakes. We're not making mistakes. We're not pushing ourselves. We're not trying new things. We're not doing things. But let's Learn from them. But let's admit our mistakes. I see corporate people come in and it's like, like you don't, don't address an issue. You just say, oh, we're doing da da da da. It's just like, hey man, we screwed up on this. We learned this. We're going to do this differently. Let's move on. Like, it takes all of 30 seconds. When you create that kind of environment, like in a coaching situation or an operations. That's, that's, that's, that's a challenge for me on growing the business because we're bringing in some really experienced people from other organizations right now. Yeah, right now. As we do that. A lot of the culture is you don't admit mistakes, you don't, you don't want to, you don't, one, you don't admit mistakes and two, you don't want, you don't want to be, you don't want to be coached. It's this academia type of things like that. I was like, look man, I'm learning every day and I'm the first one always say, man, I screwed up on that and that was a bad decision. Then the team knows, hey, well, once it's validation, two, he doesn't think he knows everything. And two, it's okay for me to make mistakes, you know, but we do need to learn from him. Like Todd's not gonna make that same mistake over and over. Like, we know that and I won't either. Right. And so that's some of the challenge in growth and in restaurant growth. We get the operators. And if you're an operator, man, you just have that culture. And what we have to get is people that are intrinsically motivated. Right? And so we can pay people really well because we do good. But, but pay doesn't matter, man. It's like to the people, they want to make a good living, of course title doesn't matter, right? You know, it's like this VP executive, all these like titles and stuff like that. People are like title crunching up. I can literally interview somebody and, and I can see the things that's like, it's like they're going after title, they're going after pay, they're going after these things versus intrinsic motivation. Like, I like to lead people. I'd like to be part of good teams. I like to be, be part of high performing teams because it gets the most out of me. I like to be excited by what I'm doing at work. Those are the things that when you hear that you're like, you're intrinsically motivated. I like what y' all do back in the community. Hey, have you ever thought about supporting this? I think this is a great organization when you hear that kind of stuff, because there's plenty of brilliant people there. There's so many brilliant people who do the same job or that have. Have the experience. But it will learn that. Right? They have the intelligence to do it, but it's hard. It's 100% heart, man. If you're intrinsically motivated to do really well.
- [63:37]
Nathan Latka
I love the idea that you said that they have this almost, like, theoretical, like, academic understanding of business, and that usually only survives in an environment where you're separated from the customer. Like, if you're working here, there is no theory. It's like, we made it. We can see the customer eating it. Look at their face. Like, what is actually happening?
- [63:54]
Todd Graves
Separated from the customer and separated from the crew. Corporate environments. Like, when I started up, I was the first guy to wear a cane's T shirt to, like, conferences. Everybody else is in a suit and tie, but there are crew members in the restaurant are wearing, like, you know, jeans and T shirts. And, like, you know, it was. It was this business mentality. From here, you're separated from the customer because you're not in your restaurant seeing who's. Who's being served, and you're also not with your crew to see what gets it. You're in the suit. So immediately when you go in with your suit into a restaurant, they're immediately like, there's a separation. There's a divide. When I walk in a restaurant, I'm dressed exactly like them, and I speak their language, and I talk to customers. They're like. Like, there's no separation. Like, oh, that's the boss. They're like, oh, that's the founder. Right? That's a different. Different title.
- [64:35]
Nathan Latka
You know, Les Schwab tire company on the west Coast. Okay, I'm gonna. I'm gonna send you his book. It's very hard to find. I found this because Charlie Munger is, like, one of my heroes. And he, you know, he. He had, like, the complete history of American business in his head. And if this. He's like, you need to read about this guy. I just read the book. You would love Lesh, because he sounds exactly what you're saying. Where he competed in very difficult business. You come into fast food QSRs. Like, that was an established thing. You're coming in and compete. There's competition everywhere. And he goes into selling tires, and he Just smokes every single other person. And the book starts. Because he's like in his 60s, the business is named after him, okay, so. And he goes, I need to put this in a book. Just so you know, I didn't have a ghostwriter. I wrote this all myself on a 50 year old typewriter. He goes, this is how I want the business to run. If the business is not going to be run this way, take my name off the business.
- [65:27]
Todd Graves
Take my name off the business.
- [65:28]
Nathan Latka
And he's like, you know, old school guy, he's cursing all the other place like, God damn it. And he's just like, I always tell the goddamn people in the office, like, the only reason they have a job is because the people in the store selling tires. And then he would talk about this. He's like, if you, if you're out, you're going to love this guy. I already know this for a fact. I'll send it to you. He's like, if you spend 30 days outside of a store, you forgot half of what you need. No, he's like, you have to be. He's like every single thing. He's like, we exist to serve the people that are serving our customers 100%.
- [65:57]
Todd Graves
It's why we call it a restaurant support office. We're not. We are a restaurant support office. We're here to support the people that are serving our customers 100%. We have these monitors set up in our offices and it has restaurants. And you can pull up any restaurant, our whole system. I want people when they're leaving our office, the restaurant support office, to see there's people still working right when they get there in the morning, there's people opening up, doing the restaurant, doing it. There's constantly working. So you see it every day. You're walking by that every day. You're like, ladies and gentlemen, that's where we do our business. And our job is to support them. Because when you go to bed at night, they're going to be working. When you get up in the morning, they're going to be opening the restaurants. We got 75,000 crew members across the system. We're here to support them. We're here to make their job better, easier, more efficient, more fulfilling, the whole bit. And keep that going. Like. And so you have to like you also, the two is entrepreneurs are very erratic, unscheduled, that, you know, I mean like so you know, most of us. So you know, it's a general deal. It's like people are like, what's your schedule like? I'M like, my schedule's all the time everywhere. However, whatever it could be.
- [67:01]
Nathan Latka
3.
- [67:01]
Todd Graves
What's your schedule?
- [67:02]
Nathan Latka
Are my eyes open?
- [67:03]
Todd Graves
Yeah, it is, man. It's like, it means if it. If it means no sleep that week, it's. It is. What it is is it means I can take off a day and go. Go climb a mountain. I'm going to do that. You know what, what, whatever, whatever call for the business. Then you answer that. So there. There is no schedule. There is no that. And so the discipline comes from the focus and the fanaticism. You're always going to be there. You're going to do it. But there are. There are the things you have to structure and do it. And so, like, for me is to scale. I created the Kane's love department in our business. Respect, recognition, and rewards, man. Like, so you know, when you have crew members that are working hard, right? One things of respect are things that you should just do. You shouldn't get credit for them. So, like, we're closed on every major holiday. That's not a reward. That's not recognition. It's just. It's just respect, man. It's like, do I want to work on July 4th? No, I don't. I want to meet my family and friends. I want to enjoy the holiday. I want to take off Christmas Eve. I want to not work on. On Christmas Day. I want to be, you know, holidays and things like that. I want to be there, there. So if I respect for my crew members, if I'm not going to work, you're not going to work. I work nights, I work weekends. I work all that. But we don't work on those days. I mean, the first July 4th I was open at this restaurant, I saw the crew was dragging. I was here working with them, right? But they're like. Because all their friends were doing something fun, their family do something fun. I was like, you know what? That's not worth it. So that's respect. Recognition is something you should. You should recognize achievement, you should recognize tenure. You should recognize all these things. Or she needs to recognize all. The taste starts from the simple things like, hey, that's great. Toad host. Thanks for being so friendly in the drive through, man, they loved you today. It's things like that. They're like, you work a year at raising canes, you get a hard hat. It symbolizes the first year I was there. All crew member signs. And it's fun, right? Five years, you're getting the. The salmon. Those are the recognizing things. Recognizing that deal then rewarding so it's like whether it's a, you know, a five dollar gift card to go get a coffee at the local coffee shop, onto other bigger and better things that you get. There's rewards that you get. And I don't want to, I want to build that better and better. But like if I just think of these ideas and they come and go, it's like, no, create a department around that. Like, like literally department that thinks of nothing but respect, recognizing rewarding crew members every day. And put a bunch of brilliant people, most of them came from, from operations in the restaurant and they know this stuff. But build system. So our next thing with that is versus saying here's the gift card or here's here's a new cane's hat or things like that. It's like build a point system, right? It's kind of fun, right? You'd be like, you know, you come in, you get it for every year you work. Every month you work, you build shifts, right? Like hey, so so and so was sick coming in and working. They come in, you get points. And I want to build it up a really exclusive type merch and stuff you could build up to and do. But like constantly getting better that raising the bar but have people around that, not just the field. You have to put programs and things around these great thoughts. You have to get structured to do that. Sometimes that's tough for an entrepreneur.
- [69:44]
Nathan Latka
One of the best pieces of advice that I've ever read in a book is. Came from Mary Kay who built that massive. Remember the Mary Kay cosmetics? And they would, they would people with like the pink catalogs and everything. And I feel Mary Kay was a master at understanding sales and human psychology. So she had, you know, one of the biggest and most successful sales departments. And the piece of advice that she gave, the organizing principle for her salespeople sounds like a lot like what you're doing with crew love. And she goes, remember that every single person goes through life with an invisible sign around their neck that says make me feel special. And I am hard driving person like you. I can be a bit of a dick just being clear. It's like I'm, I'm, you know, kind of obsessed and that just knowing that is like actually help me interact with other people better and to kind of like modulate my behavior. It's just like they just want. That person wants to feel special just like you do. Just like the person that helped you secure this absolutely like man grace. I believe in you. Like and it makes a difference even to Hard driving, you know, psychotically obsessed, fanatical people like you.
- [70:47]
Todd Graves
Absolutely.
- [70:47]
Nathan Latka
It does work. Words of encouragement matter. And so I remember reading a biography of Henry Ford, who I already mentioned. And at the time, he was like, he was not successful. He was. He had this idea. He was like, hey, all the cars that were on the road at that time were either electric or steam. That's what people don't understand. It's like, electric cars are not new. They were the default at the very beginning. He had this idea to make one with an internal combustion engine because he's like, then the fuel source. You carry the fuel source with you.
- [71:15]
Todd Graves
You.
- [71:16]
Nathan Latka
Right? And so he winds up meeting Thomas Edison at the time Henry Ford meets him. Henry Ford. No one knows who he is. He's not successful. I think he's already failed. He had two or three, two failed car companies before. He finally succeeded with the start, too. Again, just. I'm coming no matter what. Thomas Edison is the most famous person, one of the most famous people in the country. He has a hard time hearing. They're at dinner, like a huge dinner, and Henry. But Henry Ford's an engineer. And so he gets a minute with his hero, Thomas Edison, and he's having to, like, yell in his good ear about this. And I think it's like seven words or something like that. But Edison, obviously brilliant, he just gets it right away. And he hits the table and he goes, that's it, young man. You have it. Keep at it. And then Henry Ford says in his autobiography, which he's writing 40 years later, he's like, those seven or eight words of encouragement. There was a hell of a lot of pain between him telling me that and me succeeding at this idea. But I heard that in my mind, and it kept me. I was going to keep going, but a little boost was very freaking helpful. And I heard Edison, my hero, saying, you're good at this. You have a good idea. Don't give up.
- [72:25]
Todd Graves
I think it's really important. Yeah, it's really fantastic. Absolutely is. But it's our own encouragement. Edison knew he had it right, you know, and so some of that's tough love. I had to learn that on Shark Tank. Tough love is also when you get different entrepreneurs and things like that, and sometimes the ideas aren't good, and I wasn't good at it. Like, it was always encouraging, and you'll find a way and do. But, like, on Shark Tank, they're like, hey, man, you're gonna have to learn tough love. Like, Cuban knew me, right? And then being around Mr. Wonderball. Then they're like, I know it's heartbreaking, but sometimes the ideas aren't good and are they're doing it the wrong way and you're not doing them a service doing it that way. So the tough love is to say this, but then help them to focus on what's really important.
- [73:06]
Nathan Latka
No disrespect to Shark Tank, but fuck that. Like, I cannot stand I said this in the episode I did about you. It's just like, the future is unpredictable. Like, if you read history as much as any. Like, I think I read history more than almost anybody else. It's like, all it is is humans failing to predict the future accurately. Why would you sit there? You think that you sit on a stage in a suit and a bunch of makeup on and say, this kid's not gonna succeed. Fuck you. How about that? Like, let's see how it actually gonna go. I hate people that do that.
- [73:32]
Todd Graves
Yeah.
- [73:32]
Nathan Latka
And so my idea is like, obviously there's a millions of founders listen to founders, and I get emails and all this kind of stuff, and we have conversations. It's like, what do you think? What I think doesn't matter. I was like, I don't know. I have no way to predict the future. All I know is, like, when I started my podcast, people were like, there's too many podcasts out there. It's like 2000, there's 10 years ago. There's no podcast out there. They're like, no one's going to listen to a solo podcast. No one's going to listen to a podcast where you can't make a living reading books for like, that's ridiculous. It's like, it doesn't matter. I just. I actually hate that show. No offense to them, but it's just like the idea of I'm all knowing I'm an expert. There is no such thing as an expert in entrepreneurship. You know what you're going to be an expert in? Raising canes. You're an expert in raising canes. And I'm sure you have a ton of ideas which are obviously transferable to other businesses, but we don't have predictive ability. I just did this episode on Elon Musk. Let me give you an example. There's a guy named Michael Moritz who might be the most successful venture capitalist of all time. He's asked the question way he invested in PayPal, which is a successful exit, okay? They sold it to ebay for, I don't know, $1.8 billion, something like that. If you Want exits, so they sell that. Then he already knew who Elon was. He invested in PayPal, which was Elon's company. Then Elon goes to start Tesla and he pitches Michael. And Michael's like. He's like, invest in my new company. You just made money with me. Michael's like, you're trying to compete with Toyota. That's impossible. I'm passing. Okay? That's a multi billion dollar mistake on Michael's part. Okay? The funny part is, and I'm not doing this to shame Michael, because in the book later on he goes, that was. He's saying years later, he goes, that was a mistake because I severely underestimated the level of Elon's determination. That's why I don't like shows like that. You don't know what's inside that person's heart, inside that soul. It might take him five years, might take him 10 years. There's a book next to me that I just showed you before we started. Okay? The reason that I've read 400 biographies of history's greatest entrepreneur.
- [75:27]
David Senra
Yeah.
- [75:28]
Nathan Latka
So I've read that book four times. I'm about to do another episode on it. But the reason I bring that up and the reason that out of the 400 books that I've read that this is my number one recommendation is because this is not a celebration of success. 90% of this book is James Dyson failing. He goes through 5,000, 127 prototypes. He gets screwed over by. He gets screwed over by partners, joint ventures. He was just like you, please, I want to sell you a piece of my company. I need to raise investment. Please take it. Everybody's like, no, your company's not worth anything. So that's why he owns 100% of his companies to this day. But the reason it's so fascinating about this, right, is because he has the idea. I think he's 44 by the time he finally has a product up to his standards that he owns completely, that he is now selling. And the book ends where he's just like, listen, it's easy for me to say, to not give up, right? But there was times where my kids grew up seeing their dad as a failure. He would go in the back, do prototypes, be covered in dust because he's doing vacuum cleaners, carry himself inside, and I cry himself to sleep covered in dust. That's what his kids see. But he's like. So it's easy for me to say, like, not to give up, up, but because I'm on the other side of that. And at the where the book ends, he goes, they have one product which is the vacuum cleaner. They're in one market and they're doing 300 million a year in sales. And then what happens? Now his company is doing billions of dollars a year and he's got, he's all over, he's got a bunch of different products, he's in markets all across the world. The compounding between 44 and 75 was so important and it wouldn't have happened if he couldn't endure the pain. I have one of my favorite quotes, endure the pain. Excellence is the capacity to take paint.
- [77:08]
Todd Graves
It is.
- [77:09]
Nathan Latka
And you see that over and over again.
- [77:10]
Todd Graves
It is 100 is. It really is.
- [77:12]
Nathan Latka
And founders lead and they work with their heart and soul.
- [77:15]
Todd Graves
Yeah, absolutely.
- [77:17]
David Senra
In my conversation with Daniel Ek on this podcast, he said one of the most important ideas I've ever heard. He said, I'm not obsessed about time, I'm obsessed about energy management. If you have time but you have no energy, you're not going to accomplish anything anyways. I signed up for Function long before they were a sponsor of this podcast and when you sign up up they ask you what your health goals are and my response in all caps was maximum energy. All of the founders, CEOs and extreme winners I have studied have excessively high energy levels. If you're going to be the best at what you do, you need to maximize your energy and output and that is why I partnered with Function. Function provides access to comprehensive blood tests and other lab testing to help you.
- [77:55]
Nathan Latka
Improve your health so you can perform.
- [77:56]
David Senra
At your highest level.
- [77:57]
Nathan Latka
Function has made it easy for me.
- [77:59]
David Senra
To monitor and improve my internal health markers so that I feel at my absolute strongest as a member of Function. You get access to test over a hundred plus biomarkers. From hormones to toxins to markers of heart health, inflammation and stress. Function gives you a straightforward analysis of all your results along with advice from expert doctors on how to improve things like your testosterone, your stress hormones, how to reduce toxins in your bodies and much more. The platform is absolutely beautiful and provides an easy to understand picture of your overall health. Once you try Function, you'll immediately understand why it's the fastest growing health platform in the country. To learn more about Function and join, go to functionhealth.com Senra Right now, Function is offering 100 credit to the first thousand people who sign up for a Function membership. To get this hundred dollar credit, just visit functionhealth.com senra and then get the data you need to Maximize your energy. Again, that's functionhealth.com forward/senra for me.
- [78:54]
Todd Graves
You know, when I was growing and seeking advice and I got a lot of really good advice, I also got a lot of bad advice that I was able to like, like, see through it, you know what I mean? And learn from you. Learn from good and bad. Good examples, bad examples. Like, people started saying stuff like, hey, look, you know, Todd, you're just, you're. You're so much in the details that you just need to delegate the delegate. I hated hearing that word delegate. I mean, explain to me, explain delegating to me. What do you mean by that? Like, well, delegate means you give up. I'm like, no, I know what the, the word means, but how do I do, how do I delegate this off? Well, you. You just hire good people and you delegate. You delegate them to do the work. I'm like, I hire good people and let's say out of 100 point scale, if I can do it at 95, pretty good. None of that's perfect. But let's say operations, I'm at a 95, but if I hire somebody good, but they end up being an 85, but we need to be at that 95 to have success. I can't just delegate that. I have to supplement to get us back up to 95, working with that person to do it. And over time, they might get to the 95. So at that point that they're at the 95, then I'm like, hey, you can run this good. Then they get to 96. How you can run this better than me? So now I'm gonna, now I'm gonna ease off on some of those things that I was supplementing on. The deal is. But I'll still still check and make that. But I still know enough too, to where I can still add value on improving and doing things like that. And so like, did you say it can't be in the details? What do you mean on the details? Oh, man, look, you. Only this. You're down to the minutiae and all this stuff. You're wasting your time doing that stuff. You should be big picture. You should be there. I'm like, well, yeah, you got to be big picture too. But the devil's in the details on this thing is. And so I got reaffirmed by this. And this is Edison's West Large shipping company here in Louisiana. And actually it was one of his partners in another shipyard business had told me when I was explaining this to my. There's A YPO forum business group and saying people are saying I'm just too much in the details. They're like hey, hey. Gary Swiss knows exactly what the bottled water cost at, at his place. And he's like look and there's, there's, there's formulas to give it to him. He doesn't go and count water bottles. Right. He looks at the program because he's like if we're paying 25 too much on bottled water and and people aren't going up to the thing and getting out of the big thing and they're, they're using which is wasteful two little bottled waters. It means they're doing that in every phase of the business. So knowing those details but that reaffirmation me going yes me into the details matter. So, so I say you don't delegate. You hire great people, you help them and do it and if they do it better than you then you can back off and you make sure all those components of the business look, I'm not great at it. I have exceptional IT team. They do it better than me. But I'm still into the details to make sure we're doing what we need to do. We're supporting our operators, we're doing and we're being innovative and we're getting faster in drive thrus and doing it. My co CEO in the business is a much better operator than me. I'm still in the details with him in the business and I know enough about it. I'm good at it to add value in the dealers. So. So the word delegation's used way too much like trust your instincts, learn and grow and let people grow themselves but be into what they do and absolutely stay into the details of your business if that's what made you successful. Don't lose those things. Get better at it, get more efficient, get the reports and things like that. Y' all have products and you also refer people to products that can help consolidate the information to write quicker, efficient, more decisions like that. You get better at that. But stay into things. Stick to what you know know. Second on a concept man, I'm fully believe be good at one thing and do it better than anybody else. Be relentless. I do it better than anybody else.
- [82:15]
Nathan Latka
Can you expand on but that I told said on this episode. It's like sometimes you can just hear a person say a sentence like what you just said about delegation. It's just like if I that's the first thing I ever heard. I was like I know him. I'm like that. I Feel that way too. Walt Disney has a great line about this, right. If we lose the details, we lose everything thing. These are not after there not something you think about after. It's like this is what makes the magic. You called it craveable. Like the magical experience. Like why there people have an emotional reaction to your company.
- [82:46]
Todd Graves
Right.
- [82:47]
Nathan Latka
Like you. Your product evokes emotion just like his evoked emotion. But the reason the very first I didn't. I was unaware of reason Canes. There weren't any in Florida, where I live. I and I actually saw a clip when you were on Theo Von's podcast. It was a TikTok and you said something. I was like, I know him. Like I. I have to find out who this is.
- [83:06]
Todd Graves
Yeah.
- [83:06]
Nathan Latka
And then my brother in law lives in Austin and that's when I had my first race in Cane's. So I'll tell you what I heard about you. And then the first time I had it, I was like, of course his food is like this. And then I had it for lunch and dinner, lunch and dinner, lunch and dinner, lunch and dinner the whole week I was there.
- [83:22]
Todd Graves
His kindred spirits, man. Yeah.
- [83:23]
Nathan Latka
But this is what I'm obsessed with. This is exactly what Harry Snyder thought the way he thought as well. It's not just the principle of doing one thing, doing better than everything else. This is like how it applies to every single thing. And you talked about in that podcast where it's just like, well, simple menu has all these other positive effects that, you know, you can really focus again, all the details.
- [83:39]
Todd Graves
Good.
- [83:40]
Nathan Latka
You can make it better. But also you even had the concept that it's going to allow you in the future to serve more people because it's a shorter order time.
- [83:48]
Todd Graves
Right.
- [83:49]
Nathan Latka
When did you figure that out? Did you know that at the beginning?
- [83:51]
Todd Graves
Yeah. No, no, no, I didn't. No. What I wanted was. What I wanted was this craveable product, you know, And I knew from restaurants you had that, the one craveable product on their menu. And then they have all these other menu items, all these other distractions. You're like, but everybody goes to Geno's to get that delicious carbonaro. Right? Like it's like focus on that, that and do it extremely well. Don't try to be all things to all people or you're going to be nothing to anybody. Right. You have to be what people will be fanatical about, what they in the restaurant business, craveable. So. But what I want to do is create that craveable product. Everybody do. Then I saw the value of how quick I could do the drive through, right? And so it starts from when customer pulls up to the, to the order deal. The first time at a raising gains, they look, they have to decide what they want. They do it after that, they know what they want. Box combo, sweet tea, extra sauce, you know, whatever, whatever, whatever their, whatever their order is. So the order's quick. Coming to the drive through, we have a singular product focus, right? For that one menu item, we have one line. I'll take it out of the kitchen later. You can see down the line, toast is grilled on the end. You got the chicken fryers, you got fry fryers and you got the board. You can watch that cook to order process happen. Like you're cooking and so you can cook and you have that product and you, you're making one, basically one meal just with three, four, six chicken fingers. So you can make an assembly quicker. You have your, your drinks that are popular. Comes up in and out. It gets out there. Thank you very much for your, for your order and you go through. And so then I saw the speed on that deal. So it's like our concepts, craveable food served with fast food speed and convenience. That's what it is, right? Fast food speed and convenience, craveable products. So the both of those together. So if I added menu items, right, Then it would slow me down, right? And I'd say, well, good, speed it up is then I'll put heat lamps and keep all this other food assembled, done. So then quality goes down. So your speed goes down. Then your quality goes down. Then your quality is now worse. If you've been adding heat lamps and we don't have heat lamps, we don't hold times, we don't have any of that stuff riding that cook to order process. Like you go up, in and out burger, you know what you want and you're cooking ahead. So it's literally like you're cooking ahead. Now if you, if you show up, you're the first customer at Raising Cane's. Could take you four minutes to get your order. Four to five minutes. Because we're dropping the chicken, we're doing that. But when the line picks up, then you're cooking a little bit ahead. Then you know during your rushes, you're cooking way ahead. You're just meaning it's coming out, it's getting served immediately, right? We're 2 minutes, 35 seconds drive thru and counter service, right? For if we added different products and we lost two seconds every two seconds that I Can get faster is a point on sales. So just say just roughly 1%. If we do 6 billion in sales this year, what's 1%? $60 million in sales you can do. If you can tweak that, tweak that order time, two seconds. Now it flips on the other side, right? If you had two seconds, you add two seconds, you add two secondsS, then those sales go down and then you flow through dollars. Once you get to the flow through point, then you lose. That's money. So not having all those different things, it keeps the concept so that knowing what your concept is and sticking to that concept, then you know what, here's the engine, here's what drives, here's what drives sales, which eventually drives profitability. It does, does. There's other benefits too. In the restaurant business. You look at a lot of the quick service competitors. They're adding all these ltos, limited time offerings. Management and crew have to learn a new product that's going in and how that works in the service model and do it. And as they learn that, they do that, it's a distraction of what you do. Then the next 60 days, there's another one, then there's another one, then there's another one. There's all these things going on. Management has to spend so much time on learning those new products, delivering those new products, hitting the sales of activation, all that, that where's the time to encourage the crew and do positive motivational management. Point out. That's good toast. You know, you're great in the drive through. Where's the time to walk out and talk to the customers and actually see their food? How clean is our is our restaurant right now? What's the general vibe here? Oh, wait, the music's a little lower. Someone knocked it down. Where's those things? So our management can focus on that, the crew member and customer experience and make sure that goes. Because they're not these ltos, they have to learn, go through training modules and do that. You, you focus on what you do. Good. And so like you go back to that business plan they talked about not having all these different menu items. No veto vote on happen. They're like, you're not gonna get the frequency because you need frequency gets driven by different menu items. Because you get that all that stuff is. Our frequency is just as high as any other quick service restaurant. Meaning how many times somebody comes back in a month period of time.
- [88:14]
Nathan Latka
I see the doordash bills, I know how frequently.
- [88:17]
Todd Graves
But then when you come back, right, you come back. So it's it's anti. What they say is what drives this stuff. It's like there, there's no veto vote. There's no, there's no variety, draws more sales is actually frequency, our frequency as high as anybody else is serving the exact same thing people have day in, day out. Because it's good, because it's good. Our competitors can run chicken finger, chicken strip, whatever type sales. It doesn't affect our tails. It doesn't affect it because people say they might try it but two days later they're, they're coming back getting their chicken finger meal from us because it's the best. You know, it's actually, actually I love it when they run all these specials. They do all this stuff because it adds more, it adds more advertising out there for chicken fingers. And we're known for the chicken fingers fingers, man. It's like when I, when I want people to talk about chicken fingers, chicken strips, whatever they're talking about boneless chicken being dipped, I want them to say raising canes in their mind like Xerox, you know, it's not a cop anymore. Go give me a Xerox of that. That's what you want to be known for. Do what you're good at. Do what you're good at. When you can execute on a consistent basis consistently and you can teach other people how to do it and they can execute and operate the same way and you stay focused on that and delivering that high quality, craveable product with fast food speed and convenience and being friendly and doing that. When you focus on that day in, day out, the whole organization is around that. Then you can look at stuff like Haynes Love. You have time to do those other things that enhance that crew member experience. And when crew's happy, they're going to be, they're going to be friendly to your customers. That, that's why people come back. They don't just come back to canes because the food's so cravable. They come back because they know it's going to be food safe. They know people are going to be friendly. They know people are appreciate. Right. Customers want to be appreciated. We'll say thank you for your food. And people, our people mean that. It's like we appreciate you spending your hard earned dollars here. In fact, they want to go to the restroom, it's going to be clean. Those things get you that repeat business.
- [89:55]
Nathan Latka
Yeah, we went to, we landed and went directly to one last night and just greeting every single person that went to the door like it was like, how Obsessive. I love this idea because, again, focusing on one thing and being the best in the world at it, Right? To me, that should be completely obvious. I think humans crave simplicity, but our default state is we tend to overcomplicate things. So your competitors, like, okay, Todd's just going to have. Have chicken fingers, I'm going to have chicken fingers and nine other things. The problem with that is the distracted do not beat the focus.
- [90:25]
Todd Graves
That's exactly right.
- [90:26]
Nathan Latka
The distracted don't beat the focus.
- [90:27]
Todd Graves
They're going to say, we're new chicken fingers, but we're going to have 100 different sauces. People go back, get their same sauce, they might come, try it one time, and then there's also slowing down their order process and slowing down turnover time and all that stuff. And then they go back to the same sauce. So how much time did you spend on all those different sauces that when it comes down to, you might have narrow down to three sauces. What are the. One of the most popular. Narrow down your menu items. You're seeing more and more by dining restaurants narrowing their menu. It's happening now. I'm not saying I was, I was a part of that, but maybe they looked at Canes and said, wait a minute, I bring my kids here. We come here all the time. Maybe I don't need 50 different menu items.
- [90:59]
Nathan Latka
And people don't actually want to make choices they want you to make. What do you do the best? I went to Jiro in Tokyo and you know, it's a three star Michelin restaurant. It's 10 seats.
- [91:10]
Todd Graves
Maybe you can get me in.
- [91:12]
Nathan Latka
I can actually. I have a friend that knows how to do it.
- [91:14]
Todd Graves
Yeah.
- [91:14]
Nathan Latka
So Jiro's really old, so he only comes in frequently. But his son was the one that served us. But, like, you don't even get to choose. You sit down and he's like, I'm the best in the world. I want to do. And I'm going to serve it.
- [91:24]
Todd Graves
Brilliant.
- [91:25]
Nathan Latka
It's actually nice. I don't have to think of. As long as you can get in, then I don't have to think of anything else.
- [91:29]
Todd Graves
I'll flip through a menu like the.
- [91:30]
Nathan Latka
Like the. What's that? The. The restaurant that has a. Like a book this size. Something California, not California Kitchen. Cheesecake Factory. Yeah, Cheesecake Factory. I don't go there. It's like, I don't want homework. Like, I got other shit in my head. I don't want to think about this.
- [91:45]
Todd Graves
It calls it Anx. What do I go get here.
- [91:47]
Nathan Latka
This is what we love is like last night we were like, okay, what do you want? You want three chicken fingers, four chicken fingers or six? Like that's all you have to. You already know. Like that's all you have to think. So another way that you buck. So you have this limited menu, right? And then most people in your industry will, they, they're the franchise model. Why did you not choose to go down that path?
- [92:07]
Todd Graves
You know, when I started out, you know, when I had that vision. Yeah, grow canes, you know, so franchising was, was like one of the obvious ways to do it. And so everybody was franchising.
- [92:16]
Nathan Latka
Why do they do that?
- [92:17]
Todd Graves
Well, I mean, there's a lot of advantages. One is less capital cost. If you can grow off franchisees, money. So let's say you have a good concept, you have a few, few locations, and then from that, for you to grow company restaurants, then you have to keep putting in injecting a lot of capital. And on top of that, you have to take in a lot of debt to do that. Restaurants are very expensive. You can't, you know, you literally. And that's not a manufacturing plan. If I could do all, well, chicken fingers, one location, send it out, right, the cost wouldn't be there, the capital cost. But every, every one is a new restaurant, a lot of money. So people are like, you can grow in different areas and use other people's money to grow. There's also the thought of that other restaurateurs will bring other things to the table, other knowledge. They're good in their regions, they know the local knowledge better and it's better to grow that way and do it. But I think mainly it's the money play. It's literally we don't have to keep growing with our capital and we'll take a royalty off the deal. Deal. So I had the model of like, I'm gonna grow 50. I knew I wanted to go company, but I'm like, I'm not gonna be able to grow fast enough and I'm not gonna have the capital to be able to grow in all the areas. So I got really great people from the industry, people that were CEOs and other great big billion dollar businesses. And they were good people. They're people that I trust, trusted and good people. And so I'm like, that will fuel my company growth, right? Getting franchise royalties in and I'll be able to grow and we'll grow quicker. And so I did, I opened up in different boxes of country. I opened up in Ohio, opened up in Minnesota, opened up in Nevada, open areas. And they were good franchisees. And because I had the real friendship with them, we could talk through any problems or anything like that. The thing is they operated. We were saying, we'll say we're at 95 out of 100. They were about 85 out of 100, which I think other franchisees were like 65 out of 100, honestly on what they're doing. So other people have been thrilled with them as franchisees. But that 85 to 95 gap drove me crazy and I was just like, I know we could operate these better, I know I could do it better. It's a singular change of operational procedure. We had tested in our company restaurants. We knew it made us faster or it was better for management and crew is a better system. To talk them into changing that system took so much time. That was just totally inefficient because it's their business that you, you had to respect to show them like, ah, this doesn't work for us because it's different. It's like, well, what's different? The crew and customer, Your customers are exact same in both these areas. No, we just like it better this way. We think that. Or even crazy things like, no, we don't want to get that much faster because we like the longer interactions. Like, well, the longer interaction you can still be just as friendly but quick because they want to get out the door anyway. But talking them into things took too long and I was spending, I mean the team were spending too much time on something that should have been implemented overnight. And I'm like our company restaurants, once we tested it out in like five restaurants and we felt good about it. Our operator said man, great system, Boom, let's roll it. And so that time was less efficiency on us building the business and making our existing restaurants better and getting higher same restaurant sales. And so I ended up buying all them back and they did really well and they were great and they, they're all happy and actually too is they looked at like a more of a merger because we kept their teams and they had more opportunities for growth and it worked out really well. But for me is like, you know, franchisee is never going to run it like you do because it's your baby, it's your thing and they're not going to take it quite as personally me and they're not quite as fanatical as you are. Right? I'm a fry cooking cashier, man. That's what I live to do, right. And they were 85. That was at 95. And so I could, I could hire the people that had those same types of values as I did. And so like franchising for me, it's just, you're going to lose quality service, you're going to lose those things. And you're also going to lose a tremendous amount of efficiency because you're talking into things versus just adopting something system wise really quick. So we got way more efficient, we bought them out. We actually operated 95. Sales went up in all the franchise markets, literally. Sales went up, wages went up, everything went up and it actually improved out better. So look, I think it works for some organizations. For me personally, especially in the restaurant business, I think the company model just rules well.
- [96:17]
Nathan Latka
I think the important part that a lot of people like, hey, should I work on this? Or what's the idea I should pursue? And I actually got this idea from Michael Dell where I used to say, well, like, you just have to build a business authentic to you. It doesn't even matter if you could make more money from franchise. You just, it's not suited for your personality, right? So it doesn't matter. It has to be. And I used to use the word authentic all the time. You should build a business authentic to you. And then I was reading Michael Dell's autobiography and he, you know, he was in his early 20s, so he's like, man, this is really hard competing with IBM. So he actually gets a guy to come in and be I think the vice president or president and help him and the guy's like 20 years older. And he, him. And I found an interview with that guy who's now in his 80s, talking about what it was like working with Michael down in his 20s. And he's like, you know, I, I loved it, but I can only last four years because we're, we're playing for high stakes. There's a thousand other computer companies, we're taking on some of the biggest companies in the world. He's like, so after four years, like, I'm losing my hair, my back hurts. Like, I got digest. He's like, I've been there, I got digestive issues, I'm drinking too much. And he got goes. And Michael is thrilled. He's like energized because then he said this great line. He goes, because Michael built a business that was natural to him. It was unnatural to me, where my body is shutting down. And Michael's like, yes, let's do this. Natural is a better description than authentic. It has to be natural to the Creator. It has to be natural to the founder.
- [97:40]
Todd Graves
Absolutely.
- [97:41]
Nathan Latka
It's just like, I'm the same way. I'm obsessed with control. I spent 8 hours yesterday hand editing the transcript that no one gives a shit about about, because I care about it. This is like, I don't. And everybody's like, everybody tells me, outsource, delegate. They use that word all the time. No, I don't want to delegate. Like, I want to feel it.
- [97:57]
Todd Graves
I have a feeling for it. That's the key. That's key to success. That's common in everybody. That's. That's successful.
- [98:02]
Nathan Latka
I believe the time period you're describing, where in Kane's history was this happening?
- [98:06]
Todd Graves
And for the franchising.
- [98:08]
Nathan Latka
Yeah.
- [98:08]
Todd Graves
Yeah.
- [98:08]
Nathan Latka
So I, I was that five years in. Yeah.
- [98:13]
Todd Graves
Probably three years. I started talking, talking about it because. No, no, no. So, so for second restaurant was, was. Second restaurant was 18 months after the first restaurant. Then from there I had an opportunity when I really knew I wanted to grow. And that's when my partner got out, which is really interesting. You said it has to be natural to you. My partner, Craig, who was great, he loved the finance part of. He loved the it. He loved the business administration stuff. He wasn't a fry cook like me. And he's like, Todd, when. When I get a night off, if I get a night off, I go read the Wall Street Journal. He goes, you know what you do? You get a night off, you're. You're writing new schedules. That way better on that deal is. He's like, I just. Just doesn't make me happy. Happy. And so he ended up getting. We didn't have much money to buy out then, but he ended up getting a scholarship. Wait for us. Business. He did all the things he did. He actually came back canes for several years doing the things he likes to do. Has his own business now. He does. He does really well. Still one of my dear friends, but it wasn't happy. And he had the courage to say, I don't. I don't like this. Like, this is all we're doing is. Is, is. Is. Is being fry cooks doesn't turn me on. You know, it doesn't do it. And so, like, I encourage people. Like, do something you love and you'll never work a day in your life. Life.
- [99:14]
David Senra
Right.
- [99:15]
Todd Graves
It's just a part of your DNA. Like, there's no work. There's no, I'm working. I'm not working now. I mean, like, I'll be at the beach. And it's like, you know, Checking in and we got calls and I'll be well roll heads on the beat, you know, you're talking, doing and then you get back to hey, let's have a margarita. You know, it's like it's a part of what you do. So you have to do what you love, right? You have to. And if you do, you'll know you'll never work. There won't work. Words like career, it's not a career, it's a passion. It's just what you do. It's the same thing as I get up and I go take a walk and I love my dogs, I love my business, love my kids, kids. Things like that is what makes, makes the difference in being whole, I believe. So one of the disadvantages of having other partners in your business is that they might have different goals in mind that you have in your business, right. So an entrepreneur and a founder brings on an equity partner, whether it's an individual or whether it's a professional group, private equity, I mean very careful on what their motives are. And if their motives is about a financial return, you're generally going to end up bad because you have a, you have a fiduciary responsibility to the other owners of your business to meet their, their goals.
- [100:17]
Nathan Latka
Right.
- [100:18]
Todd Graves
And if those goals are financial on that deal is it can change your thinking. You change your thinking on quality in my business, you could change vision on quality food, you could try to lower food to make more profitability, which is a short term game. You could, you could cut wages, right. And so your crew members aren't as happy, they're not as appreciated on the deal. You could try to do different avenues of sales just to raise sales. That that's going to lose your focus. There's all kinds of bad things that go with that. The only way I do a partner, if they believe 100% in what you believe in and then you also believe that they're not going to sell that stock to somebody else that doesn't in the future. And rarely does that work out. If it's special to you, hold on to your equity, Take the risk, get more financing, but keep it yours because you'll always be able to protect your baby. You know what makes it worth work better than anybody else.
- [101:09]
Nathan Latka
I have one thing to add to. I think it's super important that you said that. There is this something that I've come across a lot of the biographies, like many times the best financial decision are not financial at all. And so there's this investor named Nick Sleep. Who wrote these legendary letters to his partners. And he made a great line. He's like, the best investors aren't investors at all. They're entrepreneurs who never sold. And what he was talking about is the fact that if you took. Look, obviously Sam Walton, right, He gave away the equity in Walmart to his kids before it was valuable. And that's how they wound up being very tax efficient. But if you look at his combined wealth that came from Walmart, right, that's still concentrating the family today. The last time I looked it up was like a month ago. It's like $432 billion. Okay, so one of the greatest fortunes that have ever been created. Do you think Sam Walton woke up every day like, oh, I need to maximize shareholder value. What's my stock price? No, he woke up up serving his customers.
- [102:01]
Todd Graves
Customers.
- [102:02]
Nathan Latka
And then they're like, why didn't you ever sell? It's like, why would I? It's like, I'm not doing this for money. I'm doing this because I wake up with a burning. He says something like, he wakes up with a burning desire every day to improve something.
- [102:10]
Todd Graves
And he's the most wealthy man in the world. He drove the old pickup truck and went to work every day.
- [102:14]
Nathan Latka
Yes.
- [102:14]
Todd Graves
It's not about the money.
- [102:15]
Nathan Latka
I've heard this for 200 years of entrepreneur history. It's like people think it's like some willy foo foo stuff.
- [102:20]
Todd Graves
Oh, yeah.
- [102:21]
Nathan Latka
You should do what you love. There's a underlying reason to that. Because work is going to be a grind mind. You are going to run in times where you are crying when you're in pain. Every day you want to give up. And if you don't love it, you will give up because you're sane.
- [102:35]
Todd Graves
Right?
- [102:35]
Nathan Latka
And so you have to love it. It has to be. You have to be irrationally obsessed with it. And then what happens goes back to the anti business billionaires, the people that are rationally obsessed with it. They make better products. And then customers. You know how many people I've told about raising canes? Like, I didn't. Even before I knew I was going to met you, I was going to meet you. And she's like, because I, I, it's in human nature when we find anything that we love. It could be a chicken quality chicken finger meal. It could be a movie, it could be a podcast, it could be a piece of art. It could be a city nonprofit. No one keeps it to themselves that just humans don't do that. They're just like, you got to have this chicken, this is just incred. It's incredible. And so that all this stuff, the love, the staying in, being hyperfocused, staying in something for a long time.
- [103:15]
Todd Graves
Molly says most mildly obsessive compulsive. Yeah.
- [103:19]
Nathan Latka
100. Well, it's funny you say that because there's this line in this Elon biography. So Larry Ellison, founder of Oracle, he only ever joined two boards and he was best friends with Steve Jobs. He was on Apple's board. He's good friends with Elon. Elon, consistent mentor. He's on Tesla's board and he's like, oh. And he was asked one time, what do they both have in common? He goes, OCD.
- [103:36]
Todd Graves
OCD. 100%. 100%.
- [103:39]
Nathan Latka
What do you mean? When they have a common, like, it's obvious like what they have in common to him.
- [103:42]
Todd Graves
Yeah. Being Milly obsessed with compulsive is actually a good thing.
- [103:46]
Nathan Latka
I'm only interested in fanatics. My entire podcast is just about. Think about, like, to get on the podcast, right? It's like you had to live a life. You had to be so good at your job that somebody wrote a book about your life. It's like, that's the tiniest. And in cases of people I'm super fascinated with, like you, it's like, oh, no, no book, fine, I'm gonna make my own. I literally printed out the transcripts for every single one of your interviews. And I went through it just like.
- [104:06]
Todd Graves
I did for this book.
- [104:08]
Nathan Latka
It looks the exact same way. It's the same personalities, like, whether you're playing basketball or you're building raisin canes. So wait, so how many years of doing the franchise, you're like, shit, this is not the right move.
- [104:18]
Todd Graves
Yeah, I mean, so it was exciting getting in. It's exciting to open up new Russian, exciting to teach what we do and do well. Exciting to learn. A couple years into is when I started seeing the lack of efficiencies and a little bit less, you know, like I said, they still did a good job. And so I want to give them credit. They did a good job, but not as good as we could do it. So if we couldn't do it as well, you know, we might be like, oh, wow, look, they took us another level. They just didn't operate as good as we we did. They cared about the crew, they cared about the customers. They just didn't operate as well as we did. And so that started a couple years into it, I started seeing it. We bought them out probably about the 10 year mark. Which was good because they were able to grow there and make good money. Another advantage of having company owned restaurants is the business is valued way higher. Like for franchises you'll get, you get a valuation of the 6% you're getting off that restaurant. That's part of the idea. But it's, but it's based off evaluation of what franchises markets go. So let's say franchise multiples off of EBITDA minus debt friends multiple would be like 4 to 7% is what they could sell in their market. Right. We're trading on, not trading, we don't trade. But we're valued on over 20 times EBITDA. Those company restaurants go into that. So the profitability that comes into all of it gets on that, that higher multiple. That's why we have a 20 billion plus valuation for the business. So it's, it's a better, better valuation model too if you do company.
- [105:37]
Nathan Latka
Okay, so let's go from two for how did you finance when you got up to 28?
- [105:44]
Todd Graves
Oh man. So, so this is, this is interesting, man. I said, I said look after the second restaurant I had an opportunity to go into some of these failing double drive through burger places. And so Greg, Dr. Hill, another great mentor of mine, he's like, look, we're just not operators, man. We, we, we, they had like 30 something, you know, they're called fast track. And then burger joints were down to like four of this, our best units and our best, we consolidated the best crew. We just, we want to be landlords. Like we're not operators and you can use equipment, you can have all this, look whatever you need and look, just we'll give you cheaper rent. And so I didn't want to go into him because I was like, it was these like double drive throughs. I thought like, you know, this place had a lot of soul, big dine ins and all that. But I said, you know what, it's an opportunity to get in cheap and prove what I want to prove that we can work on. We can, we can not just on campus, that we can do well, we can do well all over town. And we went into those places, we just painted them, use the equipment they had in there. And we started just doing sales, man. I mean like people loved it everywhere and they loved it. And so eventually turned all those into big, you know, dine in drive through locations. So I was able to do that new Amal food court. So I was able to get all these places. So we went from, what is that, two to eight restaurants. We opened Five restaurants in five months, man. We started rolling. Made a lot of mistakes, learned a lot, burned myself out, like. Like I couldn't beat all the locations. So then I really learned how to. To set up leaders at different restaurants and give them the support they need versus me. Bopping around to restaurants and then like putting out fires basically is all I was doing. I did that and then from there. So I was able to get into those there I was like, okay, I'm gonna come up with a prototype. Like, what is Raising Cane's ultimate location? The prototype I want to do, and I want to do it out of town and so out of Baton Rouge. And we chose that because. Because I wanted to prove the prototype. Starting off when no one really has the brand recognition that we have and show what this thing can really do. So literally one year, I'm like, no growth. We're gonna. We're gonna set up what the prototype is. And by the prototype, I didn't mean just. Just architectural design, kitchen design, and where our look and feel was everything marketing systems, human resource systems, training systems, everything globally. And I had a. I used to go to restaurant conferences to learn from people that were experienced. And I was able there to get. I know the. I know the marketing guy. I know the human resources training and operations person. I know the, you know, the crew relations. So I was able to assemble a team together with architects and with interior designers and branding people and is able to assemble a team coming in. We call them partners, not consultants. It was like they were partnered into the success of the business. And we came with that first prototype. Raising Canes opened up in Lafayette and we just went gangbusters, dude. We killed it. It was just like we had operational efficiencies. Our drive thrus got faster. We could stack more people around the restaurant. I had all these really good people that came in and gave us great. We came up with an original black and white logo. We changed it to this logo because we got it. That's when we came up with Raising Cane's one Love. All those things went into it. Comboing meals. I didn't combo. I had, you know, it was the box and a drink. You know, we said, let's combo it because people make it easier. You don't have to decide to. It's like just get. Get those menu items. And we created that. And so. But I got that on another conventional loan. Now I'm like, you know, with the money coming in and doing this thing is I'm bankable, but I'm not bankable to where I want to grow, which ended up being the 28. And so back then, bankrupt regulations were a lot more lenient, man. So, so what I said was, why don't we go in to all these, go to these community banks. Let's say we want to open up in Houma, Houma, Louisiana. Go to the community bank in Houma and let me go to angel investor. And this was Dr. Hill who had those fast tracks. He wanted to be a landlord. He also liked to do deals. And he said, hey, let me buy equity in the company. I don't want to have equity partners, but I'll give you a sub debt, a sub debt deal. So Dr. Hill, let's say I borrow $200,000 from you, I'll give you a 15% interest, interest rate. Subordinated debt. I mean it's a one page deal. Subordinated debt means subordinated to the banks. I know I can take that, that, that subordinated debt at 200,000 and the bank will look at that as equity, right? So it's 200, $200,000 on a million dollar deal. So I could go into the, to, to, to the location, get that finance boom. And I was creating cash when I did that because basically I could open up. I didn't have to pay my, my rent for 30 days, I didn't have to pay my vendors for 30 days. You know, all those things came. So I opened up, got this cash flow in and do it, boom, do the next one. Subordinated debt, no equity. And it was really stupid way to finance a business, man. But I was, I was young, I was 10 foot tall and bulletproof. We're going to work. I mean I had zero fear of any kind of risk on debt, right? And so I was going in, creating cash, doing this stuff. I get up to 28 restaurants and all of a sudden we have a, we have a storm coming in named Katrina. It's coming into Louisiana. We're used to, used to hurricanes. We knew what to do. We put crew to safety, shut down the restaurants, buckled everything down. Hurricanes would come through. We open up the next day, we'd have some power outage, whatever. But Katrina was different because it came up, went over New Orleans and it hovered. And then the levees broke, right? And we're watching on TV from our second location across here where you all go, we got this, whatever cracks up this power to where we could actually watch television. And when the levees broke, we're like, we've never seen this before. What is this flooding? Terrible, awful. Whole bit And I thought I said, man, you just screwed up bad. You screwed up bad. You just put this company in such bad financial condition because now there ain't no sales coming in. And we knew it was going to take a while to open up.
- [110:57]
Nathan Latka
And every single Keynes location is 21.
- [111:00]
Todd Graves
Out of the 21 of the 28 were down from either power to damage, to flooding, to whatever it was. And so no cash is coming in. I got the company levered to the hilt, right? I owe everybody. And in times like that, you think that, you know, you think that the banks still want their money, landlords still want their money. And I gathered, I gathered people together. We had teams that helped help people that actually had damaged houses and do all these things. We had to keep up through like SMS texting to make sure everybody. We actually said that pretty good before. And I'm like, look, we need to rally. And when I tell you we need to rally, like I said, we need to rally to save this business. And I explained to them how we had financed everything and they understood. And I said we need to open up because one, we need to save the business. Two, we need a place for our crew to come back to work because they have bills too. You got managers and things like that displaced. They're coming back and they don't have a job and we don't have money now like we have vendors and things like that to, to pay for their livelihood and, and then three people are going to start coming back to New Orleans and they, they need a place to eat. And we symbolize as a team and we had that same fanatical view of we're going to do it. We figured out, I figured how to get into New Orleans right away talking to the governor's office, they got us passes to go in. They weren't letting anybody in. We, we worked with the state on doing bull water acts because we didn't have formalizable water acts. You have to bull the water because I the, the rivers and all these things that hit everything you had to oil the water. But we came up with working with them on like how do you boil the water, how do you test it to where it's safe, those sort of things. And we reopen, man. We reopened like we start off on the North Shore, you know, slide out those areas on the west bank. Like some areas we open up like, like in Metairie, which is just a mass population of people where the only restaurant open, we open up 30 days after the storm. Other restaurants open like 90 days we opened up the west bank.
- [112:53]
Nathan Latka
So you had the whole market to yourself.
- [112:55]
Todd Graves
The whole market opened up in, in, in like the West Bank. We opened up in Harvey and like it was in like 120 days or whatever for the next restaurant open. We fed first responders first. And when people came back, they just came in and we were the only place to eat. They come in and eat. Like lord, come in and eat, right? Because it was like, you can come in. We got power. He's all generated power. We got generation all over the country, got them in and set it up and we galvanized that pool point. Like the team and the community and like us being open and then sales were nuts. Like it was nuts. So now we had cash flow coming in, we could do these massive crew bonuses. We could give back to the community organizations. And I mean I was just really, really proud of the team and at the same time proud. I was, I was disappointed in myself and I was just one of myself because I put all that in jeopardy. You know what I mean? I put all that in jeopardy for financing. From that day when I watched the levies break, I said I'll never, ever, ever put the position, the company in a position that we're financially strapped. Like I'll never do that again. And from that day we got our metrics and we work towards. It took us a couple years to get there, but we work towards those, right? You know, it's like three times debt, equity, you know, sales, all that stuff is. We'll never cross that. Like I have a capacity to get all kind of, you know, lending but, but we won't, but we won't go past our metrics, right? We won't go past that. So we learned that one the hard way. A lot of same things with COVID you know when Covid happened, we're like, like, oh my God, like, like you can't get, you can't serve, can't do food. We were, we were a necessary business. They said essential business to be open because we need to feed the public. Because they felt, they felt okay with going through drive thru because there's limited contact. But we had to learn everything. It was like literally, hey guys, we can we talk to the restaurant industries. All the authorities were like, we're going to tape off every six feet for people to be. We're going to put shields between people. It's like symbolizing the team like that, that. And then we took parking lots and we had three drive thru lanes. When I tell you when like we were the like of the first that figured that out. Could you imagine people now have a place to go get some food and not just eat at their house with what they get from the grocery store, man, it's like our sales went crazy. We're able to do huge crew bonuses, customer bonuses, but it's that fanaticism to figure it out right now. And it's like me leading with the people, and I have so many people are better at it than me, but. But, like, in the weeds with them, the restaurants. I flew to all of our markets and saw everybody. But at that point, too, I couldn't even go in the restaurant because it'd be cross contamination, like, if I had it and went in. So I just waved everybody outside, go to the next restaurant wave, fly the next market wave, you know, and do that sort of thing. But, like, that's how you get galvanized. But that same entrepreneurial fanaticism. Like, I'm sorry, you're not going to get that from some private equity group with that. That's a bunch of corporate people. I mean, are they going to fly out of the country to do that and say, let's go take this in the restaurants and do this stuff is when it's personal to founders. You know, these are my people, these are my customers, These are my communities. You figure out a way. You know, you figure out a way. And that's why. That's why I just wish more founders would hold on and stay with the business.
- [115:51]
Nathan Latka
I love what you said. It's like I watch the levees break and there's no way I'm ever going to jeopardize. Like, this is my life's work. This is a part of me. I cannot let this die. One of my great favorite quotes about this is, Steve Jobs says, victory in our industry is spelled survival. You see this over and over again. Biographies, like, just stay in the game long enough to get lucky. You took two. One of two gigantic, you know, tragedies that were outside of your control, which, of course, you're going to run into things that are outside of your control, and you turn them into. Not a li. You flipped it from a liability to an asset. And it goes back to, what have we been talking about? The fact that you're a fanatic, the fact that you're trying to create the world's best product in the category that you're to trying in the fact that you limit, you know, the amount of details. You perfect every single detail. So now these people, they. They've maybe never Would have tried racing cases. That didn't happen because you now, but you're the only game in town. And then you're like, oh, this is pretty good. And then think about how many customers that one person has got. Has. Has given you the one. One thing that comes to mind about this, like, this sounds crazy, but one of my favorite entrepreneurs I've ever come across. I found this biography, autobiography of Estee Lauder lauder published in 1980s. Okay. At the time, Estee Lauder was not the public company. It was still very successful. It was a family owned business. And she would get a lot of shit from people because they're like, her main distribution channel was like, she wants your, like Bloomingdales or Neiman Marcus to take care to. To as a distribution center. So she goes, okay, if you're willing to sell my products that I love, that I gave my life to, I'm gonna show up when you do that. And so she would go, she, oh, big Neiman Marcus open in Houston. That makes a lot of sense. You're gonna have a thousand customers. Customers. Why Estee? Why are you going down to Corpus Christi? There's going to be 20 people there. And she's like, every single customer matters. And so what she would do is on these trips, she wasn't, she didn't have any money to fly, so she'd have to take trains and buses. And let's say you're sitting across from Estee just like me, and you're sitting across the room and she sees a woman, she's like, hi, I'm Estee Lauder. Would you mind 20, give me 20 minutes of your time. I'll give you a free makeup. I make beauty products, or makeover rather. She's like, oh, I guess we're just in her suits. And then she does it for give one on one attention. People like, oh, that doesn't scale. You can't do that. It's going to scale because you're going to do this for the rest of your life. And so she says 30 years later she, she would get letters from people that she gave a free makeup on a train, talking about how much they love their products. Think about how many people that one woman that you spend 20 minutes with has told if she's a customer of.
- [118:13]
Todd Graves
Your absolutely fanatical fans, telling everybody they know, Right? Listen to this story.
- [118:17]
Nathan Latka
Exactly. I've been a customer's ears for, I don't know, four years, years. And then I make a podcast that's been listened to by like half A million people like you couldn't have. You couldn't have predicted that. There's probably going to be millions of people that watch what we're doing. The fact is, it all stems from the fact that you're a fanatic in purpose.
- [118:30]
Todd Graves
Right. And so what. What excites me about talking to you today is, is that the people that listen, if they get a little nugget from this, a little nugget that changes their life, that helps people like that fires me up. The reason why you're doing this and you're so fanatical about having. I mean, the question she sent me before. Before, Right. I had those questions. I was able to get to wrap my mind around it. Because you want it to be good for the listeners. But that's purpose, man. If it was just slapping something out to say, this is success, and do it. It's what people learn and what people will benefit out of this conversation is what matters.
- [119:01]
Nathan Latka
You have an insane amount of information and knowledge. How many people work on the same thing for 30 years? Just like so few people. Because everybody wants to. What we talked about earlier, they want to start, scale, sell. It's just like my favorite entrepreneurs. Like, sometimes I've got to speak to entrepreneurs. Entrepreneurs. I just had dinner with one of the wealthiest people in the world. He's 76 years old. He's been working the family business.
- [119:21]
Todd Graves
He was 6.
- [119:22]
Nathan Latka
Do you understand what's in that guy's head?
- [119:24]
Todd Graves
Absolutely.
- [119:25]
Nathan Latka
So much more impressive than the.
- [119:26]
Todd Graves
No disrespect.
- [119:27]
Nathan Latka
Anybody else was like the startup founder that ran the business for two years. They want nothing. They're like a baby. They're still in diapers. And even you. I love that you keep hitting. You haven't met. I'm just implying here, but like, you're like, yeah, we can get to 95. Yeah. Because, you know, there's no such thing as ever getting to 100. You're always looking for different ways to improve. Todd, you're going to do this for us, your life. I'm going to have conversations with founders. The rest of your life. I really appreciate you taking a risk and being one of my first guests.
- [119:50]
Todd Graves
Absolutely. I'm a big fan of what you do, man. It fired me up that I made one of the first, man. It's like, because everybody's going to want to watch it and see it. And it's like.
- [119:58]
Nathan Latka
So I'm going to keep having these conversations forever. I think we'll hopefully talk, you know, come back on the show every year, two years you have so much to give and to, like, share. I really appreciate you taking the time, and I really admire.
- [120:09]
Todd Graves
Oh, I appreciate what you do. I appreciate you having me on. I love the conversation. And we can actually talk for another five hours.
- [120:14]
Nathan Latka
All right, let's go check out the apartment.
- [120:16]
Todd Graves
Yeah. Yeah. I want to show you the kitchen here. Then I want to go back, and then let's go check out the apartment.
- [120:21]
Nathan Latka
All right, let's do it.
- [120:21]
David Senra
I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.