How I Built This with Guy Raz: Raising Cane's – Todd Graves
Hosted by Guy Raz | Wondery
Episode Release Date: January 6, 2025
Introduction
In this compelling episode of How I Built This, Guy Raz delves into the inspiring journey of Todd Graves, the founder and CEO of Raising Cane's Chicken Fingers. Todd shares the story behind building one of the most beloved fast-food chains in the United States, highlighting his unwavering focus, resilience in the face of adversity, and commitment to quality.
Early Life and Education
Todd Graves hails from Baton Rouge, Louisiana, growing up in a family deeply rooted in business and sports. His father, a former professional football player for the New Orleans Saints, instilled in Todd the values of hard work and determination. Throughout high school, Todd was an accomplished athlete, playing as a quarterback and defensive end. However, his passion extended beyond sports into the culinary arts, influenced by his mother's love for cooking Cajun meals.
During his time at the University of Georgia in Athens, Todd majored in telecommunications while simultaneously working various restaurant jobs. This hands-on experience ignited his passion for the restaurant industry. “I was just really fortunate,” Todd reflected, “[My diverse friendships] made me more well-rounded and empathetic.”
The Birth of Raising Cane's
In 1996, armed with a fervent desire to create a unique dining experience, Todd envisioned a chicken finger restaurant tailored to the tastes and lifestyle of LSU students. Despite suggestions to incorporate Cajun spices or healthier options, Todd remained steadfast with a simple, focused menu: chicken fingers, crinkle-cut fries, Texas toast, and coleslaw.
Todd Graves [02:48]: "I stayed laser focused on his short, simple, and efficient menu."
Partnering with his long-time friend Craig Silvi, Todd embarked on drafting a comprehensive business plan. Despite initial setbacks, including receiving a B-minus on their proposal due to skepticism about the concept’s regional appeal, Todd's determination did not wane.
Todd Graves [03:38]: "The B-minus... it just fired me up."
Funding and Building the Dream
With traditional bank loans proving elusive, Todd took unconventional routes to secure funding. He worked as a boilermaker in Southern California refineries, earning between $25,000 and $30,000 over four months. This intense and hazardous work environment taught him invaluable lessons in resilience.
Subsequently, Todd and Craig undertook a perilous stint on Alaskan fishing boats, further demonstrating Todd’s commitment to funding his dream. These experiences not only provided the necessary capital but also reinforced his tenacity.
Upon returning to Baton Rouge, Todd utilized his earnings to purchase a prime location at the north gates of LSU, transforming a former bike shop into the first Raising Cane's restaurant. Through sheer grit and hands-on construction, Todd and Craig managed to convert the space with minimal funds.
Todd Graves [52:20]: "I could learn and I learned it... we could save money and get actually a real electrician to do things, but we could be the helper putting the pipes in."
Grand Opening and Initial Success
Raising Cane's officially opened its doors on August 28, 1996. The inaugural day saw minimal promotion, relying instead on word-of-mouth and the bustling LSU environment. The simplicity of the menu and Todd’s commitment to quality quickly resonated with customers.
Todd Graves [59:05]: "We were open from 10:30 in the morning until 3:30 at night, seven days a week."
The restaurant's first month yielded a modest profit of $30, a testament to its potential. Encouraged by steady growth, Todd contemplated expansion, recognizing the necessity of scaling to achieve significant profitability in the tight-margin fast-food industry.
Challenges of Expansion and Partnership Changes
Eighteen months after opening, Raising Cane's expanded to a second location. However, this growth introduced operational challenges, including understaffing and managerial issues. During this period, Craig decided to exit the business, seeking fulfillment outside the demanding restaurant environment.
Todd Graves [65:44]: "When Craig left the business, I went through a period... it felt like I had a bucket over my head full of water."
This transition was a pivotal moment for Todd, forcing him to navigate the complexities of running multiple locations independently. Despite the setbacks, Todd's resilience shone through as he continued to expand Raising Cane's within Louisiana.
Franchising and Further Expansion
While early interest in franchising surfaced, Todd opted to maintain corporate ownership to preserve the brand's integrity and quality standards. This decision allowed him to exercise greater control over operations and ensure consistency across all locations.
However, expansion beyond Louisiana proved challenging. In Texas, Raising Cane's struggled due to factors like unfamiliar markets and inexperienced management. These experiences underscored the importance of strategic planning and localized understanding in successful expansion.
Todd Graves [76:56]: "Franchisees, it's tough because... I'm a perfectionist on the deal. There's going to be tension."
Learning from these challenges, Todd shifted his focus towards internal growth and corporate-owned stores, emphasizing operational excellence and brand consistency.
Navigating Financial Complexities
As Raising Cane's continued to grow, Todd faced financial hurdles, especially during crises like Hurricane Katrina, which impacted numerous locations. These experiences taught him the importance of balancing risk and maintaining financial security to sustain long-term growth.
Todd Graves [80:22]: "I owe banks and I owed angel investors. That subordinated loan... I leveraged everything."
Sustained Growth and Success
Despite early setbacks, Raising Cane's flourished, boasting over 600 locations across 33 states by the time of this recording. The brand's unwavering focus on a simple, high-quality menu and exceptional customer service propelled it to become one of the top-performing fast-food chains in the nation.
Todd Graves [84:30]: "I have to have a great concept, and then two, you got to work your butt off to do it. But you need help along the way, and you need luck."
Raising Cane's now enjoys impressive average unit volumes, rivaled only by giants like Chick-fil-A. Todd's strategic decisions and commitment to maintaining brand integrity have solidified Raising Cane's as a beloved staple in the fast-food industry.
Reflections and Key Insights
Todd Graves attributes Raising Cane's success to a combination of a strong concept, relentless work ethic, invaluable mentorship, and seizing opportunities. He emphasizes the importance of staying true to the brand's core values and resisting the urge to overcomplicate the menu or operations.
Todd Graves [86:14]: "Our projections this year, we'll do about $3 billion in sales. ... I feel like we're just getting warmed up."
His story underscores the significance of perseverance, strategic focus, and the courage to defy conventional wisdom in building a successful business.
Conclusion
Todd Graves' journey with Raising Cane's exemplifies the power of a clear vision, unwavering dedication, and the ability to navigate challenges with resilience. From humble beginnings and risky ventures to establishing a nationally recognized brand, Todd's story offers invaluable lessons for aspiring entrepreneurs aiming to leave their mark.
Notable Quotes
- Todd Graves [03:38]: "The B-minus... it just fired me up."
- Todd Graves [65:44]: "When Craig left the business, I went through a period... it felt like I had a bucket over my head full of water."
- Todd Graves [76:56]: "Franchisees, it's tough because... I'm a perfectionist on the deal. There's going to be tension."
- Todd Graves [84:30]: "I have to have a great concept, and then two, you got to work your butt off to do it. But you need help along the way, and you need luck."
- Todd Graves [86:14]: "Our projections this year, we'll do about $3 billion in sales. ... I feel like we're just getting warmed up."
About the Episode
In this episode, Todd Graves shares the intricate details of founding Raising Cane's, from conceptualization and financial struggles to strategic growth and overcoming partnerships challenges. His story is a testament to the entrepreneurial spirit, highlighting the blend of passion, hard work, and strategic decision-making required to build a successful business.
Listeners gain firsthand insights into the realities of starting and scaling a business, the importance of maintaining brand integrity, and the invaluable role of mentorship and support networks in achieving entrepreneurial success.
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