Advice Line with Todd Graves of Raising Cane's

Summary

Podcast Summary: How I Built This with Guy Raz

Episode: Advice Line with Todd Graves of Raising Cane’s

Date: December 25, 2025
Host: Guy Raz
Guest: Todd Graves (Founder, Raising Cane’s)
Format: Advice Line - Call-in Q&A with founders and entrepreneurs

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Overview

This episode of How I Built This features an “Advice Line” format where Guy Raz invites Todd Graves—the founder of Raising Cane’s and a previous guest—back to the show. Together, they take live calls from founders and small business owners seeking advice on scaling, franchising, financing, and business strategy. The episode is a mix of practical, hard-earned wisdom, real-life founder struggles, and signature How I Built This storytelling, with a strong focus on maintaining brand integrity, sustainable growth, and the realities of entrepreneurship.

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Key Discussion Points & Insights

1. Todd Graves' Reflection on Raising Cane’s Growth

• Big Milestone: Raising Cane's has surpassed KFC as the third largest chicken quick-service restaurant in the U.S.—a major moment for the brand given its origin story.
  • "I grew up with KFC, right? ... Just all of a sudden you’re like, wow, it just blows you away." — Todd Graves (04:17)
• Growth Model: Fewer units, but high average unit volumes per restaurant.
  • "It’s kind of a different way to grow ... having the highest of the highest average unit volumes per restaurant, that really adds up." — Todd Graves (04:29)
• Maintaining Standards in Franchising: Todd stresses the importance of picking the right franchise partners and maintaining quality, especially internationally.
  • "Picking the best franchisees is so clutch, so clutch." — Todd Graves (05:20)
  • Example: Todd’s partnership in the Middle East took years to develop, focusing on shared values and quality.

2. The Power of Simplicity and Consistency

• Simple Menu Philosophy: Inspired by In-N-Out Burger, Cane’s has stuck with a simple menu and resisted relentless “innovation” fads.
  • "If you try to be all things to all people, you’re not really going to serve any of them very well." — Todd Graves (08:54)
• Against LTOs (Limited-Time Offers): Todd thinks that frequent menu changes sap energy and erode consistency.
  • "If I had LTOs ... my managers would have to, like, then be putting up point of purchase materials, getting training everybody ... and it would wear them all out." — Todd Graves (09:41)
• Operational Efficiency: Maintaining speed and quality is easier with fewer variables/menu items.

3. Callers & Advice

Caller 1: Evan Sledge – Whiskey Morning Coffee (Tolar, TX)

• Business: Flavored coffee (bourbon barrels, BBQ smokers), DTC and events, $924k revenue last year.
• Question: Should we franchise our planned drive-thru coffee stands in small towns, or grow more slowly through company-owned locations?
• Key Advice:
  • Cash Flow Comes First: “The quickest thing out there, if you bought this property, you got $150,000 in that... those payments don’t stop. So being profitable out of the gates is very, very important. I made 30 bucks my first month.” — Todd Graves (18:23)
  • Franchising Lessons:
    • You can scale faster with franchisees’ capital, but you lose some control and quality.
    • "Our franchisees were about at 85 [out of 100], which is exceptional ... but that 85 to 95 just drove me crazy..." — Todd Graves (21:01)
  • Guy’s Perspective: Prove your concept with the first few company-owned stores ("the laboratory"), then consider franchising only if it’s highly repeatable and you’ve dialed in training and operations (22:46).
  • Final Consensus: Focus first on learning and refining in your own stores; franchising is only viable after solidifying unit economics and brand voice.

Caller 2: David Burmeister – Midwest Pasta Company (St. Louis, MO)

• Business: Fresh & frozen pasta for restaurants, groceries, $800k revenue.
• Challenge: Wants to scale up (needs $1.4M–$5.5M), but can’t get traditional loans due to past bankruptcy/SBA default; doesn’t want to lose equity/control.
• Key Advice:
  • Angel Investors & Subordinated Debt: "I got angel investors ... I did not want to give up equity ... It was a 15% interest rate subordinated debt ... but there was no equity being done..." — Todd Graves (36:51)
  • Other Creative Financing Options: Guy suggests seeking local angel groups, government grants, strategic supply chain partnerships (e.g. minimum contracts), and equipment-focused loans (37:44–39:08).
  • Leverage Existing Relationships: "Those restaurant owners you’re selling to right now are a good place to go look [for investment]." — Todd Graves (41:15)

Caller 3: Shane Lyons – Vesti (Los Angeles, CA)

• Business: Chef-crafted sandwiches, CPG snacks, supplies 45+ retail/café partners, aiming for $1M sales.
• Question: Should we open a brick-and-mortar shop, or focus on scaling B2B and direct-to-consumer?
• Key Advice:
  • Stay Focused on What’s Working: "You can take that 45 retail partners and you can make a goal to say we want 90 retail partners ... double your sales ... I would table that brick and mortar thought." — Todd Graves (48:43)
  • Pop-Ups as Brand Builders: Guy notes temporary pop-ups can serve as marketing and experience without the overhead of permanent locations (51:17–52:19).
  • Beware of Distraction & Scope Creep: "It happens to all success. ... When you lose the focus, you mess up what really is your concept." — Todd Graves (55:43)
  • Hybrid "Embassy" Model: Guy floats idea of a commissary-plus-counter as a low-risk way to build brand without jumping fully into restaurants.

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Notable Quotes & Memorable Moments

• On founder discipline:
  "Staying focused is so clutch. It's so key. Knowing what you're good at and doing that ... is what will make you successful." — Todd Graves (09:41)

• On franchising vs. company-owned stores:
  "If this is something where you just ... you don’t even leave your shift if things aren’t right ... you’re not going to feel good if franchisees don’t have that same passion." — Todd Graves (20:12)

• On bouncing back from bankruptcy:
  "A lot of people think that once you default, you’re finished. But actually, there are all kinds of ways to find that cash." — Guy Raz (41:23)

• On progress vs. perfection:
  "Concentrate more on progress rather than perfection. Progress is way more important than perfection." — Todd Graves (56:17)

• Founders’ humility:
  "We went to every bank in town ... with our chicken finger business plan ... like somebody was going to steal our chicken finger business plan." — Todd Graves (57:54)

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Timestamps for Key Segments

• [03:18–06:21]: Todd Graves on Raising Cane’s growth and franchising philosophy
• [06:21–11:22]: Guy & Todd on menu simplicity, resisting trends, operational focus
• [11:34–24:22]: Call #1 - Evan Sledge, Whiskey Morning Coffee: scaling, franchising, profit focus
• [30:22–41:21]: Call #2 - David Burmeister, Midwest Pasta Company: creative funding, growth without equity loss
• [44:30–54:44]: Call #3 - Shane Lyons, Vesti: brick-and-mortar vs. scaling B2B, brand-building, focus
• [56:17–57:54]: Todd Graves’ closing advice on progress vs. perfection; early fundraising stories

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Concluding Takeaways

• Consistency and focus trump chasing every new opportunity—especially in food.
• Quality is easier to maintain with direct control; franchising means trade-offs.
• Creative financing is possible through relationships, community, and innovative structures—don’t default to giving up equity.
• If your core business is working, don’t get distracted by “shiny objects” or pressures to expand in new directions before perfecting and scaling what you do best.
• Entrepreneurial growth is about progress, not perfection.

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Episode captures Guy Raz’s thoughtful, probing style and Todd Graves’ candid, practical founder wisdom. Valuable listening—and reading—for any business builder.

Transcript

[Guy Raz]

Wondery subscribers can listen to How I Built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts. Listening on Audible helps your imagination soar. Whether you listen to stories, motivation, expert advice, any genre you love, you can be inspired to imagine new worlds, new possibilities, new ways of thinking. Audible has an incredible selection with over 1 million audiobooks, podcasts and Audible originals all all in one easy app. Find the genres you love and discover new ones. Explore best sellers, new releases, plus thousands of included audiobooks, podcasts and originals that members can listen to all they want with more added all the time. Enjoy Audible anytime while doing other things household chores, exercising on the road, commuting, you name it. Audible makes it easy to be inspired and entertained as part of your everyday routine without needing to set aside extra time. There's more to imagine when you listen. Sign up for a free 30 day Audible trial and your first audiobook is free. Visit audible.combilt I've stayed in awesome homes on Airbnb in places like Athens and Berlin and Rome. And each time these places have given our family a chance to feel like locals. It's the best way to travel. Picture this. You're spending a cozy evening out of town in a home you booked on Airbnb. Space is thoughtfully designed and you think, I bet I could host my own home on Airbnb. Your home might be worth more than you think. Find out how [e-mail] host if you run a small business, you know there's nothing small about it. Every day there's a new decision to make, and even the smallest decisions feel massive. When all of these decisions feel daunting, it helps to have the right platform with all all of the tools you need to be successful. Shopify Shopify's Point of Sale System is a unified command center for your retail business. It brings together in store and online operations across up to 1000 locations. Get all the big stuff for your small business right with Shopify. Sign up for your $1 per month trial and start selling today at shopify.com bilt go to shopify.com bilt shopify.com built. Hello and welcome to the advice line on How I built this Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week I'm joined by a legendary founder, a former guest on the show who will help me try to help you. And if you're building something and you need advice, give us a call. And you just might Be the next guest on the show. Our number is 1-800-433-1298. Leave us a one minute message that tells us about your business and the issues or questions that you'd like help with. All right, let's get to it. Joining me today is Todd Graves, founder of Raising Canes. Todd, welcome back to the show.

[Todd Graves]

Hey guy, how you been?

[Guy Raz]

Great. Great to have you back. You were first on the show a few years ago in 2022. A lot of people ask me what's your favorite episode of the show? And I don't have one because I love all my kids. But I do cite yours often cause it fun and I think you remember that. Do you hear from people about that episode now and again?

[Todd Graves]

Oh, I do all the time.

[Guy Raz]

Yeah, of course. It was so funny. And if you guys haven't heard that episode, go back and listen to it. It's so good. And we'll put a link to it in the show. Notes story about how you, you had this dream of starting a fried chicken joint in Baton Rouge where you grew up and you couldn't get a loan. So you worked in oil refineries and in commercial salmon in Alaska and you basically saved enough money to open the first restaurant. And then, you know, it took a while. But of course today it's just an unbelievable story. I think I read that this past summer of 2025, Cane's surpassed Kentucky Fried Chicken as the third largest chicken quick service restaurant in the U.S. yeah, you.

[Todd Graves]

Know I grew up with KFC, right? Chicken and buckets of chicken in the Colonel and the Red and white striped buckets in here. Just all of a sudden you're like, wow, you know, it's just blows you away.

[Guy Raz]

Bigger than the kernel.

[Todd Graves]

It's also really interesting too, our unit count, you know, we only have a thousand restaurants and looking at the average unit volumes, it's kind of a different way to grow, right? We just not have these mass volumes. But having the highest of the highest average unit volumes per restaurant, that really adds up. So anyway, sometimes that stuff hits you and I told the team, let's enjoy it, you know, let's enjoy it for a minute.

[Guy Raz]

I bet. I mean, you know, one of the things I think that you guys have done well and smartly is you've got kind of a hybrid model. You're not afraid. You're, you're, I think mainly corporate owned locations, but you do have some franchises and I think overseas they're mainly franchises. That's harder because you've got this quality Standard.

[Todd Graves]

Right.

[Guy Raz]

It's easier in a corporate owned store, but when you've got a franchisee, it's a different ball game. So what are the ways you're able to or you guys focus on maintaining those standards when it's, it's not you guys who are directly controlling it?

[Todd Graves]

Yeah. You know, it's number one is picking a good partner, obviously. Right. If you're going to have a, you're going to have a franchisee, you're basically, you know, you're licensing the brand package, you know, the, know how, the training, the product knowledge, all those things. But it's their business and they're running it. So picking the best franchisees is so clutch. So clutch. So, so let me give you an example. Muhammad Al Shaya, the Al Shaya company in the Middle east, that's my partner, been partner now for over 10 years. Yeah, I courted, we talked. Mohammed and I talked for two years before we did something. We got to know each other, we mystery shopped our, each other's brands. Right. Look, I spent weeks at a time over in the Middle east in the different regions seeing all the brands that his team ran. And I saw the same thing I do at Canes. Happy people giving good customer service, selling good product integrity. The brand standards were handled well. And then I had been in business now with this franchisee over 10 years and we've had no problems. Now it doesn't mean we had made mistakes, but we can work together to make them better because they were the right partner.

[Guy Raz]

Yeah. You know, one of the things, I'm sure you're asked this all the time and we are too, as a show, it's like, oh, well, what are you going to, how are you going to change? How you going to, how are you going to, what are the radical things you're going to do? And it's a common question. It's a good question people often ask. And one thing that I think a lot of people fail to recognize is consistency, especially when you've got a strong brand is critical. Right. It's actually oftentimes better to double down on what you do well. And I know you cited In N Out in our interview. In N Out was an inspiration for you because they did a very simple thing. They've been doing the same thing for whatever, 50 plus years, you know, very minor modifications like the double double. But it's like a menu with three things. Hamburger, cheeseburger, double double. Right. And you walk into a Cane's, it's got the one love, it's got the lemonade and the soda fountain and it's got a very simple menu. So when people say to you, hey Todd, what are you going to do next? You going to introduce tacos, you know, chicken tacos and stuff? And you guys going to do like, I don't know, chicken cheese dip things? What do you say?

[Todd Graves]

Yeah, I mean, look, I don't get it as much as I used to, but man, just from starting out and going through, even though our sales were of the highest unit volumes, it was literally us and Chick fil a, we blew away everybody's suggestions. Still kept coming in. Knowing from my core and having, you know, seen restaurants that do very well off that craveable product, you know, and staying true to that has had so much to do with our success. Right? Because the so called experts will tell you too, in the food industry, you're going to have to change, you're going to have to add spice. Spicy, spicy chicken, right?

[Guy Raz]

They're saying, oh, people can get tired of this and you're going to have.

[Todd Graves]

You'Re going to get a V2 vote. You don't have the variety. And then look, when, when the success of Nashville hot chicken, like in Dave's Chicken, you know, going all over the country, in the world and you know, even bankers would be like, well, you consider a spicy alternative? I'm like, no, we're not considering spicy alternative because, because our concept is quality food, quality craveable food served with fast food speed and convenience. You know, from speed, if you add choices and you add people thinking in their head, I know, you know what I do want spicy or I do want this, it's going to add a second or two. Second or two adds up and it adds up to a lot of profitability because as many cars you can get through there on low, low margins, on high volumes. What you do. Now let's also think about quality. I have a cook to order process. Just like In n out burger, right? You walk in and out burger, you see that grills filled with those burger patties and they're selling that product. Now if it's slow during the day, you might actually see them put that raw beef down and start cooking. Same at Canes, right? If you're the first one of the day, you're gonna, you're gonna wait your five minutes. But when we pick up volume, we're, we're the cooked orders process. We don't have heat lamps. We're selling that food. It's going out hot and fresh, right? If you added the Spicy. Now I got two things to cook. You would start doing what the other quick service do. They start cooking food, holding it in warming bins, and assembling it to orders what they do. So my quality and my speed would go down. So knowing I don't want to be all things to all people, because if you try to be all things to all people, you're not really going to serve any of them very well. Knowing that and staying disciplined to that is what's important.

[Guy Raz]

I think that's right. I think in a world where there's infinite choices, having fewer great choices is actually an advantage. You think of Trader Joe's, you know, they have 3,000 products compared to a Walmart which has 200,000 products in their grocery. And I think people see a Trader Joe's peanut butter, and it's like creamy or crunchy. They don't need like 15 different kinds. They know that the vetting's been done for them, and that's why they're doing 16 billion in revenue a year.

[Todd Graves]

Agreed. You know, it's a natural human condition to want to keep changing, evolution and growing. It's, it's, it's just in us, like, if you're doing something really well, it's, ooh, you know what make it even better. I mean, look, look, it's just for young entrepreneurs, staying focused is so clutch. It's so key. Knowing what you're good at and doing that and focusing your efforts on that is what will make you successful. So, like, let me just tell you, me specifically is like not having all these different LTOs, limited time offers, right? I've certainly saved menu for 29 years, almost 30 years. If I had LTOs, which might spike business for a tiny bit, right? Something new at Cane's, my managers would have to, like, then be putting up point of purchase materials, getting training everybody on how you cook this one thing during this small period of time, and it would wear them all out. Then my customer service would go down because the crew members are a little bit frustrated, and we wouldn't be doing what we do great every day consistently by adding different things to that. So we, you know, same menu Serve for 30 years. Good craveable food and good customer service.

[Guy Raz]

I love that. And it's so counterintuitive today because. And we've done brand, we've done awesome brands that do drops. Okay? It's gimmicky. It's like that's a thing that, that marketers and social media people that you gotta do these drops. You gotta Be on social media and Instagram. Hey, this week we're gonna do raising canes, you know, whatever. Chicken rolled in Doritos. But the thing is, you're right, it's like that might get you hyped for a couple weeks, but it's not. It doesn't necessarily bring in the repeat customers. That's what matters, right? I'd say that kind of be great. Rolling in Doritos. Crispy Doritos. Frying them.

[David Burmeister]

You might.

[Guy Raz]

If you do that. I want my name on that product.

[Todd Graves]

Todd, you won't have to worry about that.

[Guy Raz]

Anyway, you ready to take some calls?

[Todd Graves]

Yeah, it'd be fun.

[Guy Raz]

All right, let's bring in our first caller. Welcome to the advice line, caller. Tell us your name, where you're calling from, and a little bit about your business.

[Evan Sledge]

Hey, guy. Hey, Todd, it's Evan Sledge here. I'm out here in Tolar, Texas and I'm the owner of Whiskey Morning Coffee.

[Todd Graves]

Evan.

[Evan Sledge]

Yes, sir.

[Todd Graves]

Evan, how you doing, man?

[Evan Sledge]

Doing good.

[Guy Raz]

Tell us. Yeah, tell us a little bit about the business. Just a line.

[Evan Sledge]

Yeah, so pretty much we're a flavored coffee company that uses non traditional ways to flavor such as bourbon barrels, barbecue smokers, things like that.

[Guy Raz]

I love that. Welcome to the show, Evan. Thanks for calling in. All right, so do you know, many years ago we had Howard Schultz on the show and then I went out to Seattle to the roastery there with him and he gave me, this is like 10 years ago, he gave me a whiskey flavored Starbucks coffee. It was so good, I still remember it now. So I love this idea. How did you get into this business?

[Evan Sledge]

So I'll be honest. We grew up like drinking Folgers in community. So the last thing we thought we'd be doing is coffee Folgers at the.

[Guy Raz]

Church, like through the big coffee whatever, percolators.

[Evan Sledge]

Yes, sir. But my granddad, he's an old moonshiner. So we have a family distillery. So we grew up making whiskey and bourbon. Still do that. And had to start a business in college at TCU and said I could get a hold of some bourbon barrels and another kid said he knew how to get a hold of coffee beans and we just started aging it in our apartments and roasting it out in the parking lot.

[Guy Raz]

So how did a guy like you who grew up on Folgers Crystals or whatever in kind of small town Texas get into. Did you get into. Were you into coffee?

[Evan Sledge]

Oh, no, we, we didn't know nothing about it. We drank it every day, that's for sure. But yeah, we made our first coffee roasters, got some barbecue pits from tractor supplies and welded up a drum and definitely just learned by failure, that's for sure.

[Guy Raz]

How did you know that whiskey barrels was going to make coffee taste delicious?

[Evan Sledge]

We didn't. We heard from a guy that if they keep the coffee in the burlap too long, it'll start to taste like burlap. So that was the only research we had really done. And yeah, we got, we had 320 bucks as a group from the class and, and we bought green beans off of Amazon and, and aged it and, and luckily people around school bought it.

[Guy Raz]

How long ago was that?

[Evan Sledge]

That would have been 2018, senior year.

[Guy Raz]

Wow. Okay, so tell me where, tell me where the business is now. Do you guys have a store? Do you guys have a shop in. Are you in Tolar, Texas you said?

[Evan Sledge]

Yes sir. So really right now we're mostly online e commerce, direct to consumer. We do a lot of events and trade shows as well as roast for other coffee companies or coffee shops. Now last year it's still me and three buddies so there's four of us on the team full time. Last year we did about 924,000 which is wow, crazy.

[Guy Raz]

That's amazing. So what percentage of your business is roasting and what percentage your business is, is selling beans?

[Evan Sledge]

So we're about 60% direct to consumer from the website. Whether it be subscription or just one time purchases. The remaining 40%, that's either what they consider toll roast and for other people or coffee shops or events.

[Guy Raz]

That's a great business. You got a nice diversified business. Okay, before we dive in more, what's your question for us?

[Evan Sledge]

So my question is we seem to be Stalin at growth and we kind of looked at what we're good at and it's definitely the customer service, small town deal, word of mouth. And what we're starting to do is build these many drive thru coffee shops in small towns that you know your seven brewing Dutch brothers aren't going to.

[Guy Raz]

You haven't done this yet? This is your idea.

[Evan Sledge]

We're building out our first one right now that'll open in March in Tolar, Texas in Grand Barrie, which is same town pretty much.

[Guy Raz]

Okay, I'm looking at the map, I see it. So you guys are like an hour or a half hour out of Fort Worth.

[Evan Sledge]

Yeah. So it's going to be different because you know for us to build our stands, it's going to cost about 150 grand for all the equipment and buildings. It's going to be ran by one to two people. And we're trying to figure out as we start to grow, is there an advantage to franchising and partnering with other influential people in these small towns or should we look to grow kind of as our own and grow slowly?

[Guy Raz]

Oh man, you've come to the right place with Todd Graves. Todd, I want to bring you in. Do you have any questions for Evan or thoughts?

[Todd Graves]

Yeah, Evan, so when you just said 150,000, that is, that's all in. That's building equipment, everything you need to open up.

[Evan Sledge]

Yes sir. Besides the land.

[Todd Graves]

Got it. And so maybe you're ground leasing the land.

[Evan Sledge]

Yes sir, the first one where we purchased it. Okay, so we're going to own that.

[Todd Graves]

And you're building a facility, you're actually building a drive thru location.

[Evan Sledge]

Yes sir. They're kind of like these modular buildings you're seeing popped up, but a lot smaller scale. So it's going to be about 16 by 20.

[Todd Graves]

Okay. Okay.

[Evan Sledge]

And it drive through only and espresso.

[Guy Raz]

Drinks too, or just like, like more like Dutch brothers.

[Evan Sledge]

So it's going to be espresso drinks and it's going to be Tex Mex. So the only food is going to be tamales.

[Guy Raz]

Oh, okay. Food too. All right, all right.

[Evan Sledge]

Something different.

[Todd Graves]

So actually kind of, it's kind of funky. I kind of like it. It's, you know, it's our espresso drinks and some tamales for you. What are you estimating your sales will be at this first. First unit.

[Evan Sledge]

So at the location we're hoping to do about, I think we're going to try or get about 1500-2000 dollars a day in revenue and we're basing that off of other coffee shops that we supply beans for in similar locations.

[Guy Raz]

That seems a little high to me, Todd.

[Todd Graves]

It is as I was. But if he's basing it off of other drive through sales with other coffee shops they're selling to, it sounds like there are a lot of coffee drinkers in your part of Texas, man.

[Evan Sledge]

Yes sir, they do early in the.

[Todd Graves]

Morning and then throughout the day. And are you basing your sales off the tamales sales too or no?

[Evan Sledge]

Yes sir. We sell tamales at the distillery. So that's kind of taking information from ourselves at the distillery and Christmas orders, things like that.

[Todd Graves]

Okay, well, look, it sounds a little hot on me too, guy, but I think, you know, look, a normal Starbucks would be doing a lot higher than that every, every day. Dutch brothers, et cetera. So I think that could be achievable and then just real quick on your margins. Last thing I'll ask you, do you have financial projections and what your cost of goods sold margins will be and what you think you'll make on the bottom line?

[Evan Sledge]

So I don't have all of that figured out. I've got the coffee market's kind of crazy right now, so.

[Todd Graves]

Yeah.

[Guy Raz]

Oh, yeah.

[Evan Sledge]

So that part's changing every day.

[Guy Raz]

Yeah.

[Todd Graves]

It'd be good to do some financial projections. Right. You can get those models just looking. Just Google it. But I would look at that and your, your labor, your things like that just for opening, because you'll know what, where you're tight about and where you need to. What to work on to be profitable. Because that's the first thing you have to do is, man, you got a cash flow. Because the quickest thing out there, if you bought, bought this Property, you got $150,000 in that. I don't know if you're paying cash or you're financing that, but you're going to have payroll, you're going to have vendors to pay. You're going to have all those things, and those payments don't stop. Right. So being profitable out of the right of the gates is very, very important. I made 30 bucks my first month. Yeah. Which was, which was pretty funny. Right. But. But what that meant is I could pay everybody and I wasn't going further in the hole. So. And then. God. I don't know if you want to answer the franchising question on this perspective.

[Guy Raz]

I have some thoughts, but I know I'd love to hear your thoughts on it. I mean, you're. You've done this.

[Todd Graves]

Yeah. I mean, Evan, like, there's different ways to grow your business, right? And you know, the first way to grow it is at your mothership, which I call the first raising canes. Right? You're opening your mothership and learning the business inside and out. While you do that. That will be your plan. And then if it's something that's profitable, can be replicated, then you got to look at growth. And you can grow, you know, three different models. You can grow all company restaurants, you could grow all franchise restaurants, or you could do a mix of both. Now, I wanted to do a mix of both when I started. So I liked running my restaurants. I felt like I could run my restaurants very well. I like hiring people, bringing them to have new jobs. I like teaching them how to. How to become managers and lead and earn people's money. It's. It's a calling for me. And then I went up doing that. I wanted to grow quicker, and I couldn't grow quicker without using franchisees in my mind, because, one, I couldn't have that much access to capital. There's only a certain amount of money I could borrow from the banks. These franchisees had their own money to grow. And it wasn't for me about being debt averse. I'm not. I would take all the debt on I could. I just didn't have the capacity. So franchisees served, they could grow. And the second thing was I thought that the franchisees, like, I picked really good restaurant people, that they would actually be better in their community being, you know, right down the road of all the restaurants than I would. And so I went that route and I had exceptional franchisees and we grew company restaurants as quickly as we could, you know, as much money as we can get. Linton. But over time, I saw that the franchisees didn't run their restaurants as good as I did. Okay. And so let's say 100 point scale, if we're running our restaurants at a 95, which is like just. You got to care so much to do that, right? 95. Our franchisees were about at 85, which is exceptional in the franchise world because most of them in quick service food run at about a 6,570.

[Guy Raz]

Wow.

[Todd Graves]

And so we should be very thrilled about our, you know, about our franchise partners. And I appreciated them because they did care. But that 85 to 95 just drove me crazy, man. I mean, like, it was just like, oh, if you just do this, your customer service will get better. Or if you just did this, the quality would get better. And now an advantage about company is you can control that. Second thing that I thought was inefficient about franchising is we needed to change something that we were doing. Right? Like, here's a better operational procedure. There was so much time you had to talk in these franchisees because it's their business, and they're like, well, we don't agree with that. We think it should be this and. But that wasted time to me, that when, you know, we have company restaurants, we can roll something out. Three months later, it's adopted and we roll, the efficiency goes away. So that's there. Another advantage of having your own restaurants, company restaurants, is that your valuations are way higher.

[Guy Raz]

Right?

[Todd Graves]

Right. So your sales, your profitability, your ebitda, that goes through as you grow, company restaurants, just the company's worth so much more, man. Because if you think about it, if you were taking a franchise system and would say you were charging them 6% of sales, right? But that's what you're making. Then you have your G and A that's going to the constant support systems, branding processes, etcetera, etcetera. You're just not going to be worth nearly as much. So I would, if I were you, if you, I would think about some things and questions about am I debt adverse because if you are company restaurant model is not going to be a great model for you to grow because you're going to grow and you're going to need to take on more debt and grow. You can do the other franchisees. How, how much is this a baby? And you'll see that in that first year you're opening this your mothership down the road if this is something where you're just like, you don't even leave your shift if things aren't right, even though you had a great date planned that night, you're not going to feel good with franchisees don't might have that same type of passion as yours. So I just would figure out there's no good or bad to it, it's just a personality thing and really see where you're at.

[Guy Raz]

I totally agree and I would, I would say in, in your case again Evan, it's not, I don't know if you can make that decision now. You have to first prove the model right. You've got to take that store one and just instrument it like crazy. It's just everything is data in that store and once you figure out how to make that work, then you open two or three more stores and you write everything down. Because to make it successful as a franchise model it has to be, you've got to have repeatable unit economics, you got a training system, there's got to be a brand voice, you got to have quality control, you've got to have a solid menu, operational simplicity, all of these things. If and only if it works after three to five corporate owned stores, then you can start thinking about whether it makes sense. So I think it's a multi step process and step one is you've got this great laboratory now in Granbury and then you can answer the question if and when you get to a point where it does take all these boxes, does that make sense?

[Evan Sledge]

Yes sir, that makes total sense. I think both of you all just hit it right on the head because like what you were saying Todd, with the, the baby part in 95 and 85, we, we run everything at 105 miles an hour. And if it falls short, that's cool. But as long as you're all out. And I think the franchise model, like you said, people aren't going to do that, and that would probably frustrate us. And this really helped a lot, and I appreciate it.

[Guy Raz]

Awesome. The brand is called Whiskey Morning Coffee. Evan Sledge, thanks for calling in, man. Congrats. Good luck.

[Evan Sledge]

Thank you, guys.

[Todd Graves]

Good luck, Evan.

[Evan Sledge]

Yes, sir.

[Guy Raz]

That's awesome. I've done some work with a huge quick service restaurant a couple years ago, and I went to their annual convention and, man, the franchisees, they have the power. It's not corporate. You've got a guy who's got 200 franchise locations of this quick service restaurant. Like, he's the guy that everybody's got to talk to, not the CEO of the company.

[Todd Graves]

That is right. Which is the way it should be.

[Guy Raz]

Yeah. But of course, it can be like Dave's Hot Chicken as an example. They went franchise right away, and that's one of the ways they scaled so quickly and it worked out for them. Right. I mean, eventually they sold the business, but that was a model that worked for them.

[Todd Graves]

It is. Right. And they wanted to expand rapidly. They want to do it with people that had other concepts and knew how to do it and roll through it and then. And ultimately. But you just, you nailed in the head right there. The ultimate thing is they sold the business. Right. So what's the quickest to get to scale, to sell? Right. And so for me is I'm not selling the business. I love the business. I want it to be generational business and to keep rolling. And the best way to have something I'd be proud of for me personally, was to own them company restaurants.

[Guy Raz]

We're going to take a quick break, but when we come back, another caller, another question, and another round of advice. I'm Guy Raz. Stick around. You're listening to the advice line on how I built this. This past summer, I took my family to Athens, and it was unforgettable. We wandered through Plaka's winding streets and hiked up to the Hill of the Muses at sunset and spent hours exploring the National Archaeological Museum, standing inches away from artifacts that have shaped the world. But one of the things that made the trip truly special was the place we booked on Airbnb. It was tucked just off a quiet street in Koukaki with a terrace that looked out over the Acropolis. Every morning, we'd sit outside with Greek coffee and fresh bugattza from the bakery downstairs. With watching the city wake up. If you ever get a chance to go, I cannot recommend it enough. It's one of those cities that stays with you long after you leave your own vacations can be the perfect opportunity to host your home on Airbnb. The character of your space, your art, your kitchen gear, the details that make it uniquely yours could help another traveler feel instantly grounded. And with the earnings from hosting you, you gain an additional stream of income that can lighten or even cover the cost of your future trips. Your home might be worth more than you think. Find out how [e-mail] host this show is brought to you by American Express. Running a business means making countless choices every day, some small and some that can change everything. The business owners who thrive are the ones who are ready for whatever comes next, and having the right support behind those decisions can make all the difference. That's why so many business owners I talk to choose the American Express Business Platinum card. It's built to help them move quickly and take their business further. And with five times membership rewards points on flights and prepaid hotels booked through amextravel.com, you can turn any business trip into a chance to earn more and invest in your business's future. Plus, you get a flexible spending limit that changes as your business does, adapting to where you are and where you're headed next. Because when it comes to growing your business, there's truly nothing like Business Platinum. Not all purchases will be approved. Terms apply. Learn more at Go Amex bplat. You know, one of the most surprising things about how I Built this is just how many pitches we get. Every year, tens of thousands of businesses reach out, hoping to tell their story. Now, while we do try to read most of those pitches, we can't possibly read all. But we choose most of our guests through our own deep research. And that means my team and I spend hundreds of hours digging into companies, what they make, who's behind them, and whether their journey can inspire you. And that's exactly where Claude has become such an incredible thinking partner in my creative process, Claude is the AI for minds that don't stop at goodnot the thinking partner that works with you to explore the things that fascinate you. Whether you're researching late night curiosity spirals or working through complex creative challenges, Claude extends your thinking to tackle the problems together. For example, imagine I'm about to sit down with a founder of a snack company. I'll want to know what products they've released, how they've evolved, and which Competitors they're up against. In the past, it could take hours to track down reliable details. We'd search articles, databases, reports. Now Claude can give me a clear answer in seconds, and then I can decide what to dig into further. It doesn't replace my process, but it sharpens it. And that means I can spend more time doing what I love most, focusing on the human stories, the lessons, the decisions and the struggles behind the businesses you hear on this show. Experience what collaborative thinking feels like at Claude AI hibt and see why the world's best problem solvers choose Claude as their thinking partner. Welcome back to the Advice line on how I built this lab. I'm Guy Roz. My guest today is the legendary Todd Graves, founder of Raising Canes. And we're taking your calls. Todd, you ready for the next call?

[Todd Graves]

Yeah, let's go.

[Guy Raz]

Awesome. All right, let's bring in our next caller. Welcome to the Advice line. Tell us your name, where you're calling from, and just a line or two about your business, please.

[David Burmeister]

Thank you. I'm David burmeister calling from St. Louis. I have Midwest Pasta Company and I manufacture fresh pasta and frozen pasta for restaurants and grocery stores and farmers markets and the like.

[Guy Raz]

Awesome. Welcome to the show, David. I just went to a delicious restaurant in Nashville and had fresh pasta. So there are restaurants that will sell fresh pasta, but you guys basically are the white label. You make it for them, Right?

[David Burmeister]

I make fresh pasta for about 80 different restaurants, about 130 different grocery stores, food distribution, hotels, farmer's markets.

[Guy Raz]

So with the exception of the Farmers Markets, you're B2B?

[David Burmeister]

Basically, yes.

[Guy Raz]

Tell me a little bit about how you got into this business. Have you been in food your whole career?

[David Burmeister]

Yeah. Yeah. Well, I grew up in restaurants and when I was 25, I had $1,000 in idea and me and some friends bought a restaurant in South St. Louis and had a small pasta making component. Fast forward 10 years, I had a 4 year old and at that point it went from being 40 seats to 120 seats. 3 o' clock bar.

[Guy Raz]

Wow.

[David Burmeister]

And so we sold the restaurant and I took the pasta component with me and then I had some help along the way, and it's been about 13 years since then.

[Guy Raz]

And give me a sense of what you guys are doing in terms of sales a year. Sure.

[David Burmeister]

We're going to be pushing 800 grand this year. I hope to be pushing a million by the end of next year.

[Guy Raz]

And how big is your facility?

[David Burmeister]

3,000 square feet.

[Guy Raz]

Okay. Awesome. All right, before we dive in further, tell Us. Your question?

[David Burmeister]

Sure. So scaling up is something that I'm about ready to do and I don't have access to traditional capital streams. So I'm trying to figure out how do I finance and how do I get access to capital without sacrificing my equity.

[Guy Raz]

Okay, before we answer the question, tell us why you don't have access to traditional finance. Sure.

[David Burmeister]

Well, part of the sale of the restaurant had to do with some tax liability and default on an SBA loan. So I've been blacklisted by the sba and I had to take a personal bankruptcy in that transaction. So I don't have bad credit, but I don't have any credit.

[Guy Raz]

Right. So you can't get a traditional loan because of this default. And listen, running restaurants, tough business. Even as it's growing, margins are small. And so.

[David Burmeister]

Well, we were also hit by the Rather a session.

[Guy Raz]

Got it. Okay, so I want to bring in Todd Graves. Todd pasta business. 95% of his business is to food services restaurants. He's looking to expand. Thoughts, questions, Concerns?

[Todd Graves]

Yeah. So, David, sounds like you're doing pretty good, my man. I mean, something to be really proud of. 800,000 in sales right now. And you were saying by the end of next year you're looking to do 1 million. That's 20% growth right there. That you're just doing organically right now is fantastic, especially at 3,000 square foot. Can I ask you what you say you want to expand? What does that mean? What is. I mean, what is the how much capital you need to do that growth plan?

[David Burmeister]

I've got two different plans. The initial plan is about 1.4 million. The further plan is more like five and a half. What that would do is gain me capacity. So freezer space, for instance, is something that is a premium. I could expand my capacity, I could expand my offerings. I could improve equipment. The industry is very equipment reliant. Most of my gear has been on for years. I've been rebuilding and repairing. But a lot of my expenses are caught up in keeping that equipment going and producing. So new equipment, better facilities, and also more marketing. I could hire someone to handle more front end things. My focus is on the creation and the production and the quality of the product and managing my team. Not as much focus as I could have on outward sales, Internet presence, these kinds of front of the house tasks.

[Guy Raz]

Quick question for you. Does the current demand, David, outstrip your capacity?

[David Burmeister]

There is more demand than I have the ability to touch. I've actually been approached by national players asking to do co Packing.

[Guy Raz]

Wow.

[David Burmeister]

And I just couldn't. I just don't have the capacity to hold what they wanted. They were talking about £20,000 a week, which, with a larger facility that's, you know, big players in this industry, that's nothing. But for me, that's more than I could take.

[Todd Graves]

So for the 1.4 million or the five and a half million, I mean, just right off the bat, my, my gut says go the lower amount because of the exposure. Right. Get good traction and roll. So and David, if you run through those numbers, 1.54 million gets me X amount of more freezer space, this equipment. And that's going to relate to X amount of sales, which means, bottom line, I make this so you can measure that return. You've done that?

[David Burmeister]

Yes.

[Todd Graves]

Great. Your challenge is, is that you can't get conventional financing, which would be ideal, obviously. Right. Right now you've got a proven business model and you need to go get, you know, equity types of investments. But you don't want to give up equity.

[David Burmeister]

Well, I don't want to lose control of it. Yeah. That's what I did with the restaurant and I ended up with a small slice of big pie where currently I have my own, my very own whole small piece.

[Todd Graves]

Yeah. So there's, you know, there's lots of different ways to finance a business. It depends on what your, your appetite for debt is. Right. What your appetite is for, how much equity you want to sell. And you, obviously it's already non negotiable for you. You don't want to lose controlling interests of the business, which I highly recommend. This is your baby, you started it, you're making a success now. There's other ways that you can do things. There's, you know, angel investor networks. And these are the people that, you know, love your pasta. They're very passionate about this. And there are people that have enough money put away that they can do investments, tips to be a part of something. Right. Be a part of something special. And these are generally more favorable. That's why I call them angels. Right. And so I got angel investors to help me as I grew the business because I did not want to give up equity. I didn't want to give up control. I didn't even want having other equity shareholders just to have that in my head. Am I doing a good job for them? Because it took me off my focus of what I knew was the right thing, thing to do for our business and so generally higher interest rate things. So what I had was angel investors that I would do a 15% interest rate, subordinated debt. Okay. It was a one pager. And I personally endorse these. I mean, if I personally signed onto it. So they knew anything I had in the world, which is all just tied up the business anyway back then, that I was going to be 100% into this. And. But there was no equity being done. But it was a 15% interest rate, but my cash flow could pay for that. So that's why I was asking you about that. You run your numbers in that million four, and you feel real solid for that. I was able to do a higher interest rate, but they were a part of it. I made them feel a part of the business. They got Cane's gear all the time. They came to restaurant openings, and, you know, their family was thrilled. And we went and we put together photo albums of. Look, look at, look at how great this Houma, Louisiana, new restaurant is and how much the community loves it. And then they made a 15% return, which actually was really good. But as soon as I could pay that thing off, I did.

[Guy Raz]

And that wasn't convertible debt. It was just a straight up loan.

[Todd Graves]

Straight up loan. And look at banking back then was a lot, you know, more lenient. I could actually take that subordinated debt and actually use as equity to get. Get loans, traditional loans, but, you know, for. For a million four, if you had five to ten angel investors, you know, that really want to be a part of this, and everybody could break off. You put in $100,000, put in $200,000. There's plenty of people in St. Louis that do have that kind of money. But subordinated debt, they have no. No voting rights, no anything. They're just like, hey, look, here's this. I hope you can pay me back my interest rate and do that. It's an idea.

[Guy Raz]

Yeah.

[Todd Graves]

You know, look at anything from a 10% to a. Up to a 20% type of like. Like that. Up to mezzanine type lenders. That's a route you could go, right?

[David Burmeister]

Yeah, right.

[Guy Raz]

There are a couple of options for you. So as Todd mentioned, they're going to be local angel investors who are focused entirely on St. Louis makers. And you can find them on LinkedIn. They may have Facebook groups, a little sleuthing on the Internet. You'll find those groups, if you don't already know where they are. There are probably even some agricultural or food production grants available in the state of Missouri. I bet these are ways to support businesses in the state that employ people in the state. There are probably even Some food, investment groups. Those are all really interesting paths where you can do what Todd did with loans or you could basically give away some equity or you could take some convertible debt. The other idea, which I don't know if you've explored, as you mentioned, some of these big producers on the coast want to do co packing with you. Have you explored some kind of strategic financing from them where they basically they do a minimum volume contract or they commit to a certain amount every month, they prepay it, or you do some kind of joint venture with them for just one line. Right. So they don't own your company, but they co own one like production line or even financing some of the equipment through those equipment manufacturers or they're even equipment lenders. So I think that there are a couple of interesting options for you that don't necessarily rely on traditional financing.

[David Burmeister]

Yeah, absolutely. Actually, one of the companies that I was talking to is owned by a private equity firm. When I did a little digging, although I have a sense that I'm too small to even sit at that table. I know that venture capital, when I looked into that, it was way higher. The floor for that kind of a transaction was way higher than anywhere close to where I'm at.

[Guy Raz]

You're too small for that, but you're not too small for. Especially for passionate, committed, local. I mean, Todd, Baton Rouge has groups of people who are committed to investing in Baton Rouge. Right. I mean, you are probably one of those people today.

[Todd Graves]

That's right. They want to see St. Louis exceed you. They want to see him do better. And so the community people will invest. I love it. Guy. You said there's plenty of government resources to go into looking at. What are grants? What are those things going on that you're creating jobs and doing well? You're proven, hardworking person.

[David Burmeister]

Right.

[Todd Graves]

And equipment leasing company, since you have a successful company, look, it's going to be higher interest than if you went in and you know, you finance. It is traditionally, but that's how restaurateurs like us grow, man. You can go in and get. It'll be higher interest rate. But the equipment lending is another really big one. I love the idea of talking to these companies. I want you to come in and do all this pasta for them. And just saying, look, here's where I'm at. You're just gonna be. You're an honest guy. So you're gonna tell them, here's where I'm at. I can do this, but I need this. And would you be interested in helping me do that? These are all just creative ways to. Where you don't have to give up equity.

[Guy Raz]

That's right. There's a lot of creativity that you can build into those conversations.

[David Burmeister]

Yeah, great.

[Guy Raz]

I don't think you've got a capital problem. I actually think it's more of an opportunity for you to identify those places where you can get the cash from. And it may. It may work out ultimately in your favor.

[David Burmeister]

Right, right. Agree.

[Todd Graves]

And look at the rest of the restaurants you currently sell to now. I'm sure they're thrilled with your product. I'm sure they love you because you give them good product. That those are, those. Are those angel investors, you know, they're doing well and just saying, hey, look, I just, I want to grow. I'd like you to make a good return. Are you interested in this? I'm asking for smaller increments. I'll put together a group of this many people, and look, they start talking, they know each other, they start talking, hey, this is exciting. This is, you know, have them come out to your plant and look, this is what I'm going to do. And they feel a part of something, and you can do good for St. Louis, I think those restaurant owners you're selling to right now are a good place to go. Look.

[Guy Raz]

100% agree. Yeah. David Burmeister, Midwest Pasta Company. Thanks for calling and good luck.

[David Burmeister]

Thank you.

[Guy Raz]

Wow. It's interesting because a lot of people think that once you default or something like, you're finished, but it's actually, there are all kinds of ways to find. It's not easy, there's no question about it. But there are all kinds of ways to find that cash.

[Todd Graves]

Absolutely, man. That was a good advice, Guy. That was some good stuff.

[Guy Raz]

Stay with us because after the break, we'll talk to another founder working to take their business to the next level. That's after the break. I'm Guy Raz, and you're listening to the advice line right here on How I built this. And now a quick vital break, A little more from our sponsor, Vital Proteins. You might be familiar with Vital Proteins, the number one brand of collagen peptides in the US by taking collagen peptides daily, you can help support your hair, skin, nail, bone, and joint health. And now Vital Proteins is shaking it up and introducing a brand new way to get your collagen. A new collagen and protein shake. All the benefits of collagen now in a ready to drink shake with a light chocolatey smooth taste. And it's made with no added Sugar, artificial sweeteners or carrageenan. I find them perfect for after workouts because they taste great, they're super convenient, and it's 30 grams of protein. Go to www.vitalproteins.com to learn more and where to buy. Get 20% off your next order by entering promo code built at checkout. You know, every holiday season I think about Die Hard. Yes, that holiday movie. Because at its core, it's really about chaos slowly turning into teamwork. One guy trying to save the day with a little unexpected help from the people around him. To make these holiday favorites, it takes a team of talented people, from actors to editors to props people, the sound crew, and more. When it comes to building such a team, whether it's for the entertainment industry or a wide range of other industries, you need to hire the right people. The best way to do that is with ZipRecruiter. And right now you can try it for [e-mail] Bilt make your hiring a little merrier with ZipRecruiter. Four out of five employers who post on ZipRecruiter get a quality candidate within the first day. Just go to this exclusive web address right now to try ZipRecruiter for free. ZipRecruiter.com built again, that's ZipRecruiter.com built ZipRecruiter the smartest way to hire. Welcome back to the advice line on how I built this lab. I'm Guy Roz and today I'm taking calls with Todd Graves of Raising Canes. And let's bring in our next caller.

[Todd Graves]

Yeah, I'm ready. This is fun.

[Shane Lyons]

Hi Todd. And hi Guy. I'm Shane Lyons, longtime listener, first time caller.

[Guy Raz]

Awesome.

[Shane Lyons]

I'm the co founder of Vesti in Los Angeles, California. We specialize in delivering chef crafted snacks and signature sandwiches made on homemade focaccia to retail partners, offices and corporate campuses and direct to consumers via web orders all over LA and Orange County.

[Guy Raz]

Awesome. Vesti. So you make sandwiches, focaccia bread sandwiches. You're in la. Tell me a little bit about where you're like, where are you selling your stuff?

[Shane Lyons]

Sure. So we've been on quite the journey, my partners and I. We're just about three years in and we have 45 retail partners that we work with. So Alfred Coffee being one of our most notable. They've got, I believe, 22 locations in Los Angeles and we service 18 of them with sandwiches as well as gourmet grocers and other coffee shops.

[Guy Raz]

So you make the sandwiches like a central kitchen and deliver them fresh every day to these different places.

[Shane Lyons]

That's right. Yeah. We call it like a chef driven factory model because we're all chefs, my partners and I, long time fine dining boys and girls, and we love great food. We also wanted to make a really scalable, profitable business. So we're trying to find the balance of the two. And we landed on sandwiches. And the sandwiches we design actually, believe it or not, get better as they sit because of how we've designed them. They're low moisture, relatively high fat due to the nice olive oil that we use. And so they have a shelf life up to, we say three days, but in actuality it's four days, where you really see almost no degradation in the product.

[Guy Raz]

And just really quick, what you guys are profitable and what's. Roughly what are your sales?

[Shane Lyons]

Sure. Yeah. We had our first months of profit in June and July. We are targeting just under a million in sales this year.

[Guy Raz]

Nice. And you mentioned you were a fine dining chef. Tell me a little bit about your background. And why did you. I can imagine why you left that world, but why did you leave that world?

[Shane Lyons]

Sure. I've actually had dual careers my whole life. When I was a kid, I was a kid actor on Nickelodeon and Disney for many years. And then that train stopped. And at 16, I went to culinary school. I went to the CIA Culinary Institute of America. My mom's also a graduate from there. So sort of in the blood. And then I worked with some really fantastic chefs, David Chang and Daniel Boulud. And then I had the opportunity to open up a restaurant in New York City with my cousin Nicky Ovakini, and legendary restaurateur Drew Nippont. We did that for about eight years and eventually sold the lease to other restaurateurs. So after that, I was sort of beat on, you know, done with restaurants. I was working six, seven days a week, back to back, lunch, dinner into brunch, all that sort of good stuff that chefs do. And I was burnt out and then found myself working in film and TV again. And during COVID and like many people during COVID you know, I was going one direction. Then I was given a Covid diagnosis. I was supposed to actually star in a TV show. And they recast immediately.

[Guy Raz]

Wow.

[Shane Lyons]

And so I had to regroup. And I really spent a lot of time thinking about the background of being a chef and as well as an actor and the things I liked and the things I didn't like from the cultures that I was in and I was just dedicated to doing something with my friends.

[Guy Raz]

So it sounds like you got your weekends back. Basically.

[Shane Lyons]

I do have my weekends and I've seen what a Friday night not at a restaurant looks like, and it's really nice.

[Guy Raz]

Tell us what your question is before we dive in a little more.

[Shane Lyons]

So our question relates to brick and mortar. Should we invest in a brick and mortar? And if so, when it comes up often in conversation, we have internal debates about it. We have some active investor interests and then constant guest inquiries. And our model right now as a chef driven factory allows us to, to excel at high volume, high quality food production. But it's not currently set up for on demand single sandwich orders, which as you can imagine, leaves some of our guests really frustrated and potentially turned off from the brand entirely. But given that our model's low fixed costs and high margins, what are the compelling reasons that we should be exploring and investing in a traditional bricks and sticks location?

[Guy Raz]

Okay, great. Todd, I want to bring you in former Michelin star chefs and making focaccia bread sandwiches to offices and coffee shops. But they're thinking about opening a brick and mortar.

[Todd Graves]

Shane, I'll give you a few things just from my experience. What happens is when you start to have success, you have other influences that come in saying, hey, you're doing great doing this, but you know what, maybe you should go do this. And that's where I think this brick and mortar is coming. These people are like, your products are incredible, then why don't you go do this? And what's worked in my, you know, my passion, my career doing raising canes, it's been being staying focused, right? Focused on I know what I'm good at, I know what I can do to successfully make money, which you have to continue to make money. So for me, the whole thought of brick and mortar, and I'm not saying it's a bad one, but it's a, as you know, it's a completely different business. You know, you're still selling your product, but now, now you're the one doing, you know, all the front of house, back a house with people. You're taking on substantial debt doing that. And to me, it's a distraction away from building your current business that's doing very well. You can take that 45 retail partners and you can make a goal to say we want 90 retail partners and this is how we're gonna go out and do this and double your sales. So my advice would be go for the goals to keep doing great. What you're Doing right now, focus on that, make it better. And I would table that brick and mortar thought until after you get that next goal. Let's say it's 90. Retail partners say, hey, do we really wanna do that now and change our focus right now? Because this little guy, Todd Graves in Baton Rouge, Louisiana had a chicken finger dream and stuck with it. And now I got a thousand brick and mortars and we're playing on the next thousand, you know what I mean? But if I try to get into retail line, you know, grocery stores want canes frozen in the, in the, in the grocery stores retail, they want our sauce bottle, they want all these different lines and if I look at all those different product lines, it's going to take my focus away from doing what I'm really good at.

[Guy Raz]

Yeah, I, you know, it's So a couple of questions for Shane. I mean the first is, do you guys do pop ups?

[Shane Lyons]

It's funny you should say that. I'm actually suited up because right now we're working at the Meyden Market in Los Angeles. It's a really cool hybrid concept which we kind of consider an asset like brick and mortar. Basically we have a six week lease. So for us, you know exactly what you're describing, Todd. It's back, you know, we're there every day. I'm there from 9:00am to you know, 11, 12:00 clock at night and it's full on six days a week. And it's reminded me, you know, that I really like my core business. As much fun as it is to interact with guests, we're in hospitality for a reason. We love people, we love to make them feel great. We love delivering on the promise of providing a fantasy, which I think is what restaurants are ultimately there for, is to provide fantasy to some degree and fulfill on that promise. So it's been really nice to kind of be in a restaurant for this period, but then we'll be exiting.

[Guy Raz]

Yeah, I mean to me that's a brand building exercise which is important because a lot of chefs go into catering. It's just more efficient, it's more profitable, better margins. And by doing these pop ups right, you're exposing more and more consumers to what you offer. And really it's the lunchtimes, you know, it's at 500 sandwiches or 200 sandwiches for the lunchtime, you know, offices. That's really going to be your bread and butter. What's interesting to me about brick and mortar is that, and I totally agree with Todd, it's like, do you want to get back into that restaurant lifestyle that you walked away from. I think there's a kind of a happy middle there which is, is there a world where down the road it may not happen right away? You basically open up a commissary kitchen that is like an embassy, right? Like almost like a brand embassy where you, you might have a little counter where you can go in a little bit of a brick and mortar, where you do offer maybe a window, but really it's just about putting your brand out there and just building more awareness. But also having a kitchen, your own kitchen where you're making the product.

[Shane Lyons]

I think that's right. It makes total sense. And we've talked around ideas like that and we really love the hub and spoke model. We've kind of reversed, engineered. A lot of restaurants move into catering because their a la carte sales are lagging and instead we've started exclusively catering and now there's demand for a la carte. So trying to find that hybridization of the two is really what we're looking at now. And we do know that we would like to expand across at least North America. And there's the internal conversation of well, can you have a brand that can leave LA and go somewhere else and not have a brick and mortar presence? Is it even possible? And we don't know as far as.

[Todd Graves]

Expanding right now you'll have some aspiring goals. It's a dream. You know, you want to expand across the country when using retail partners, they need good products. Right. And I like what guys saying on some of your product. Having its own brand, it's a pop up in the new area, right? You set up that hub and spoke model, you're going to set up your commissary there and do it great. Some pop ups where people go, man, that's the best focaccia sandwich I've ever had. Using influencers to where people know it's your brand. But, but I don't think you need to have the brick and mortar. You also run the risk of that brick and mortar not hitting the way you want it to hit. And the retail partners are like, hey, you know what, you didn't, you weren't that successful in your brick and mortar. I don't want to get your product. You have something that's working very well right now and I would focus you and your team all that energy on that and growing that side of your business.

[Shane Lyons]

Yeah, yeah. We've been sort of like a slow growing indie band in la, but the word's getting out and like, we can see that the opportunities are sort of everywhere now. And I'm very afraid of the shiny objects. I've been around enough to say most of them are a distraction, and so it's a little challenging to navigate all the different feedback. We have three lines of CPG goods. I've never had anything on a shelf before, but I'm learning that I really like selling potato chips, and I love the margins on them, and people really love our potato chips. So I guess this is really helpful. And what I'm hearing is stay focused and go back to the core product, which is making sure that taste, texture, and temperature on all the things that we create are deliver on that promise, because that's what we can control.

[Guy Raz]

Yeah, Todd, they do a muffaletta. Oh, they're doing a New Orleans sandwich, man.

[Todd Graves]

That's not easy to do that, right?

[Shane Lyons]

Oh, we'll take the Pepsi challenge. Todd. We'll take the challenge.

[Todd Graves]

I can't wait to try it.

[Guy Raz]

Awesome. Shane Lyons. A brand is called Vesti Sandwiches and snacks in la. Congrats. Good luck, man.

[Shane Lyons]

Thanks, guys.

[Todd Graves]

Good luck. Shay.

[Shane Lyons]

Such a pleasure.

[Guy Raz]

Thank you. Yeah, it's. I mean, it's. It's interesting because do you guys. I mean, do you do. Is catering a significant business for you? I mean, your stores are so packed, so I don't know.

[Todd Graves]

Yeah, it's really not. You know, it's up to like, maybe 3% of total sales. Right. So we actually even looked at, like, when we could different times and experimented, like, going out, taking catering to places, and it didn't have the extra manpower to go get that done. Didn't make sense. So now we just make it easily packageable. You can pick it up at the restaurant and. But for us, it's just like, stay in our model, because if you're going after 3% and putting muscle behind that, you're losing focus, you're distracting. And just like with Shane, like, him. Like, we said that too. He said something interesting. He's like, then I can make the great potato chips to go with that. That's still in that same vein. That's a great add on your margins. Even better on potato chips. But you start doing two different businesses, which it is in that deal, he loses focus, he screws up something that's really working well right now. It happens to all success. Right? It's. You're doing great, but. But you could also do this. And when you lose the focus, you mess up with what really is your. Your concept.

[Guy Raz]

At the end of the day, I Call it God, faith, whatever, Buddha, divine intervention. It's gonna. What's supposed to happen is gonna happen. I think about Stacy's pita chips. It started out as a pita wrap sandwich place, but people wanted the pita chips, and then it turned into a different business. And you never know potato chips that might become the business.

[Todd Graves]

You're right, man. It's cool.

[Guy Raz]

Todd, before I let you go, quick question for you. If you go back to the guy that was work at the oil refinery on the ship and starting the first canes right in down the street from Louisiana State, what advice would you have given him that would have been helpful?

[Todd Graves]

You know, I think number one would be concentrate more on progress rather than perfection. And, you know, entrepreneurs, when you start something, it's your baby, right? You just. Everything's into it. It is. It's about an expression of yourself. And so I want everything to be perfect, right? So we'd be starting a new training program, but I wouldn't release it because it wasn't perfect yet. Y' all give me a couple more weeks. You're like, todd, we need this program. Like, two more weeks. I'll get it right. I missed out on a lot of progress just trying to make it perfect. And then some older mentors, they taught me, look, Todd, nothing's ever going to be perfect. And progress is way more important than perfection. So get that training program out. But it's version one, and you can get to your version 100 that you're going to do and get better. I still use that today, you know, here, 30 years into the business, because I will literally want something to be so perfect and what a new marketing campaign, a new thing is. And then I'm like, I can't stop progression in our business. Progress, progress, progress.

[Guy Raz]

Yeah, that's right. Todd, thanks so much for coming back on the show, man. Really great having you.

[Todd Graves]

Thanks for having me on.

[Guy Raz]

That's Todd Graves, founder of Raising Canes. And by the way, if you haven't heard that episode, it's so good. I swear to God, if you don't like it, send me a letter. I'll send you a dollar. And if you do like it, you can send me a dollar. Go back, check it out. It's just so good. We're gonna put a link to it in the show notes. And here's one of my favorite moments from that episode. Episode.

[Todd Graves]

You know, back then, we thought you could actually. This is being naive. You could actually go to a bank, bring a business plan, and they'd lend you money.

[Guy Raz]

Here's my plan. I need $100,000.

[Todd Graves]

Yeah. And I thought they would give it to you. Isn't this a great plan? Isn't this a great idea?

[Guy Raz]

And and so did you do that?

[Todd Graves]

Yeah, yeah, yeah. Look, we bought a couple of cheap suits and and went to Office Depot and bought boxy briefcases with the brass combination locks. You remember those?

[Guy Raz]

Yep, yep.

[Todd Graves]

We went and we went and saw every bank in town. I had a briefcase, Craig had a briefcase. And we would put it on their desk sitting across from in our chairs and we would open the brass combination lock like somebody was going to steal our chicken finger.

[Guy Raz]

Business Plan hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free free at guyraz.com or on substack. And of course, if you are working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the questions or issues that you're currently facing because we would love to try and help you solve them. You can send us a voice [e-mail] or call us at 1-800-433-123. Leave a message there and make sure to tell us how to reach you. And we'll put all of this information in the podcast description as well. This episode was produced by Alex Chung with music composed by Ramtin Arablouei. It was edited by Andrea Bruce. Our audio engineer was Jimmy Keeley. Our production staff also includes Chris Masini, J.C. howard, Casey Herman, Sam Paulson, Kerry Thompson, Kathryn Cipher, Rommel, Wilson Wood, Neva Grant, and Elaine Coates. I'm Guy Raz and you've been listening to the advice line right here on How I Built this Lab. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short [e-mail] survey.