Raising Cane's: Todd Graves (2022)

0:05 Hey it's Guy here, and what better way to celebrate the new year than with one of our all time favorite episodes. The story of raising canes is so funny, it's so full of lessons, and In some parts so implausible That I promise you you will not be able to forget it once you've heard it.

0:23 We first ran this episode back in twenty twenty two and since then Raising Cains has expanded to more than eight hundred restaurants across the US. It is such a fun story, and I think you're gonna love it. 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. Here's my plan. I need uh a hundred thousand dollars. Yeah, and I thought they would give it to you. Isn't this a great plan? Isn't this a great idea?

0:52 And and so did you do that? Yeah, yeah, yeah. Look, we bought a couple of cheap suits and um And went to office depot and bought boxy briefcases with the brass combination locks, you remember those? Yep. Yeah. We went and we went and saw every bank in town.

1:07 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 gonna steal our chicken finger business plan.

1:26 Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. Guy Raz, and on the show today, how Todd Graves built one of the most popular fast food chains in the US by ignoring the advice of almost everyone. By going through hell and high water? Almost literally To raise the money. When you have an idea for something interesting, say a business or a product or an initiative inside of your workplace.

2:05 You will at some point Get asked the following question. How is it different from what's already out there? It's a perfectly fair question, and a question many of us are trained to automatically ask. Because we humans naturally assume that

2:22 If the idea you're coming up with isn't totally original, Well, then it's probably not worth pursuing. Except that Being different or original isn't necessarily a recipe for success.

2:36 Just look at Google Glass, or Heinz Blue Ketchup, or the short-lived, short-form video service Quibi. All of these were very different and very original and very much failures. which must mean at this point in my introduction, I'm obligated to quote Ecclesiastes chapter one, verse nine There is nothing new under the sun. Even some of the biggest companies in the world, like Google and Facebook, were originally improvements on existing technology.

3:07 So in some ways, the right question to ask isn't How is it different, but rather How is it better? Because that is the question Todd Graves could easily answer in 1996. His idea was not revolutionary. He wanted to sell fried chicken fingers.

3:26 But his execution is what would make his restaurant raising canes? Они домост фуд чайс індаде Стайс. On a per restaurant basis. Raising Canes earns more money than any other major fast food chain, with the exception of Chick-fil-A. And the entire menu is four simple items.

3:47 Chicken fingers, Crankle Cut fries. Texas toast. and coleslot. You can get a fountain drink, ketchup, and a container of Kane's special dipping sauce as well. That's it.

3:59 And what that means is that if you only have four things on your menu, you better be pretty confident that those four things are exceptional. Because Raising Cane's doesn't have burgers or frosty shakes or hot dogs or tacos to lean on if the rest of the menu sucks. But Todd's vision, at least at the beginning. Wasn't to build an empire of restaurants that now numbers more than six hundred.

4:24 He simply wanted a place in Baton Rouge where students at Louisiana State University could hang out after football games or after a night of partying. And while lots of people suggested that Todd introduce classic Louisiana Cajun spices or even healthy options like salad. He stayed laser focused on his short, simple, and efficient menu. But going from one restaurant to six hundred? Wasn't a seamless journey.

4:53 In fact, getting the money to finance his first restaurant required two dangerous detours to an oil refinery and And an Alaskan salmon fishing boat. But before that happened. Todd Graves grew up in Baton Rouge in a family of five. His dad sold warranties for car dealerships and his mom helped his dad with the business.

5:15 Todd's dad was actually a former professional football player too. a lineman for the New Orleans back in the nineteen seventies, and Todd grew up with dreams of playing college football. Just like his dad. I was six one, weighed almost two hundred pounds in high school playing two A football, right? And so I was a quarterback and then the defensive end, you know, going both ways. And um, you know, I didn't realize at the time but that really made for me having a smooth childhood. You know, I I was just really fortunate, you know, I was just one of the better kids, you know, or of the best kids.

5:49 playing sports, which also, you know, you know, at younger ages you know, makes you more popular, right? And so yeah, I was a reasonably smart kid and I worked hard in my classes. So I was part of all the honors classes. And then I liked drama, so I did You know, plays. Oh, you did theater. Yeah, yeah, I would say

6:08 I had different groups of friends. You know, I had the real smart kids that were friends, you know, and then sometimes they complained about the jocks. you know, not being friendly to them and I'd kinda bridge those together. Then you had the artistic kids and, you know, I would kinda bridge all those along and and and I didn't really think that was my role, but later on in life I kinda understood that it was, you know, when I look back. And You know, I think that made me more well rounded and made me more empathetic to people, being around different people and different backgrounds, different interests, but also seeing their challenges with the other groups.

6:42 So you were you were the high school quarterback and a pretty good athlete. I think I'm in Louisiana I would say Louisiana Texas. Big football. And Louisiana also baseball.

6:53 States. Did you ever ever like have dreams of playing at the college level? Did you ever think, well, maybe I can I can play in college? Yeah, I I I did and and I wanted to. I just wasn't good enough to play Division One. I wanted to play major college football, so we're talking LSU.

7:10 you know, a big south eastern conference school. And so I wasn't that good. I actually got offers some smaller schools uh to go play, but I realized I really wanted that college experience, you know, I wanted the big school. I wanted the I wanted the I wanted the party, you know, I wanted to have fun. You know, I'm a kid of the seventies and eighties, man. We grew up with the with the movies of college being just the ultimate, you know, so I wanted to be able to do that. So you actually uh wound up going to the University of Georgia. in Athens. Um and I I I I read that you

7:40 you majored in telecommunications and and I guess started working at a bunch of different restaurants Around campus while you were there, right? I did. I did. I worked at a lot of different uh different restaurants and bars. So everything from more quick service types of restaurants to like you know, mom and pop grills and Bars. Uh

7:57 You know, it's a great College job, and that's really where I fell in love with the restaurant business. I was always in love with cooking and and everything around food. Did you know how to cook when you were in college? Yeah, I did. You know, I I just growing up in South Louisiana, food is so much a part of our culture. And you know, I I grew up cooking in my mother's kitchen and I was always interested in it. So I learned to make intricate Cajun meals when I was young. So but we make a gumbo and uh you know that gumbo really could be made in a couple hours, but

8:26 You know, you want that thing to stretch at all day. And why you want it to is because you're spending time cooking with somebody. And then your family and friends are coming through the kitchen. They're they're coming in, they're checking on the progress of the gumbo. They want to come in and stir that pot. It's a way to spend time together. It's a way to connect. It's a way to say I love you. You were doing ruse for the for the gumbo? Absolutely, ruse for gumbo. Dark, dark, dark, dark, dark dark. I have to tell ya now, most of the time I cheat. And I use Sabra's roux and a jar, which which is almost as good. Yeah. No shame.

9:02 You're a busy guy. Yeah, it's fun too because I cook with my kids today, especially my son. He he loves it. It's the way we spend time together, like my mother and I spent time together, but all those caging dishes, the crawfish eight toothes, even things just like look steak and potatoes. Like I was a junior high kid just grilled the steaks for my parents, making gin and tonics for'em. You know what I mean? I don't know many other kids in seven Can you make me a gin and tonic son? I love that. Where was your first restaurant job? The first restaurant job I had was actually

9:31 I function as a kitchen steward for our fraternity. And uh that gave me great experience. I just signed up to do it, uh, you know, my freshman year. And uh from there, uh, we had a chef. Her name was Martha, and she was man, she was an amazing cook. She cooked, you know, just great southern food. We're talking mac and cheese and collard greens and fried chicken and I mean she could cook great. So I spent my time in the kitchen with her going over the food and the food quality and learning that way. And then the the owner of the business that did this for a lot of fraternities, uh, he taught me things'cause I asked about food costs, you know, what what is your food cost? And he had the real simple answers of, you know, it's a third of what you uh of what you should sell something for. So, you know, if you're gonna sell something for a dollar, your food cost should be thirty three cents.

10:18 Uh, and from there we just w worked at different I can't even remember all the names of them, just different college bars that other people worked at that I go jump onto and working for these entrepreneurs and learn learning about food. You realize, you know, how hard of a business it is. Uh and you also realize you have to love it. And you know, I loved it. Yeah. I loved I love the restaurant business, and it was like uh I love the the teamwork. I love the immediate gratification of

10:45 cooking something and serving something to somebody And them smiling, you know, and and saying when and that was good. So you are one of these I mean, I worked in in restaurants when I was in high school and I I liked it too. You know, I worked at a pizzeria and

11:00 even work to the gas station, making the burgers and chopping the onions. And actually I think I think that's why I know how to cook today,'cause I did it back then. But I can't say I loved it, but it was there was something About restaurants and the intensity of working in a restaurant that you just loved, that he just just connected with you. I it's two things. Uh one is my mind's always Rolling. It's always thinking of ideas. It's always these things. And

11:26 It's therapeutic to me. If I'm on a fry line and cook I can focus on Fry the chicken, you know, do the fries, deliver the box. So your it's immediate gratification. Like some people while they like to cut their grass, right? Yeah. You know, but then two, when you're slammed in busy, you're working with a team. and everybody's high stress, but that teamwork, man, when you're just cranking together, you know, servers like we're we're slammed, we're behind, a table's upset, no problem, we'll get it right to you. That intensity's good, and maybe that came from, you know, That's way sports is, right? You know, sports is high intensity, you gotta make quick decisions, you gotta roll and dude, if you mess up, make up for it, keep going. And I think you know, when you get done with your day, you know, you don't have a problem going to sleep that night. And you accomplish something.

12:11 Got a shot. Was there a point in college where you thought I think I wanna do this. I think I wanna I wanna see. start a restaurant or run a restaurant professionally'cause you were studying telecommunications.

12:23 It seems to me that you already in college were thinking, I think this is where this is where I'm headed, restaurants. Yeah, absolutely was. You know, it was It was something I knew I could do. And I also I wanted to What I wanted to do was open a restaurant at the north gates of LSU. I wanted to be home.

12:42 You know, I loved LSU and I was a college student and that was familiar to me. I knew what college students wanted to eat. I knew it how much c college students could spend. I knew what environment college students wanted to come to. I knew hours of operation. I knew I'd have a late night restaurant because they're up late either studying or going to the bars. And so I knew all this and so I looked at concepts and you know, what kind of restaurant I want to start. And At that time.

13:06 Boneless Chicken was becoming Incredibly popular. It was just really becoming popular. Like back in the eighties People started saying that red meat was terrible for you. All these studies came out and a lot of people were saying, look chicken as an alternative. But you know, not just bone in chicken, which is what I grew up on, you started getting boneless chicken, you know, white meat, boneless chicken, whether it's strips or fingers or nuggets.

13:30 And you were seeing'em on menus from everywhere to like national chains, like Chilies would have it on the menu with a great dipping sauce, or mom and pop's would have it. Like I saw it everywhere and we ate it like crazy. And you know, I started seeing them like, man, this trend is going. And you had people that specialized in it, like Guthrie's chicken fingers throughout the south, Saxby's chicken fingers and Buffalo wings and you know, different concepts like that were opening and doing well with it.

13:56 And so I thought that was a really good concept to start. So I I I call my old buddy Craig Sylvie uh dear friends still today and uh told him what I wanted to do and the restaurants and I talked to him and he said, Hey the look this sounds pretty good. You know, let's uh L let's go and do this. And I said, Are you serious? Yeah. And Craig by the way, Craig was at LSU?

14:16 Craig was at L Shoop. Yeah, C was at L shoop. And was a high school friend of yours? And yeah, yeah, actually Craig and I had uh had gone to school since uh since middle school. You know, we're just best of friends and Plus, you know I just knew I could rely on him. He's a guy that kind of guy that always has your back. He's one of those wasn't one of those kind of friends. So when you uh When you reach out to Craig with your idea.

14:36 What what was the idea you told him you had? What did you want to do? Yeah, I t I told him I want to do a college restaurant at North Gates of LSU. I mean I knew where the area I wanted to be. But you know, back then too, as you gotta realize, I was thinking about just one location. That was my dream. I wanted everybody to say, Man, that's the coolest restaurant, that's the greatest place. That's where we eat, that's our hangout, that's where we get our chicken fingers. Yeah. And and you knew that it was going to be Chicken fingers fries and drinks. Absolutely.

15:05 Absolutely. You know, I mean, if you look at it, our menu is like what Guthrie's originally came back up with like in the late sixties, you know, was that chicken finger meal with the sauce and the fries and the coleslaw and the and the Texas toast. I wanted to take that to another level. Um And I wanted to make it better and I wanted to make, you know, not only the menu better, but the operations better and uh and have a little more character.

15:31 But I I'm curious'cause you're twenty two and you're thinking let's focus on one thing and that's a really smart thing to think. Okay, that's like a really sophisticated a business. But uh but usually that doesn't come until many years later of just trying and failing and trying and failing, but

15:50 Already at the outset. you came to the realization that focusing on one thing is the way to go. And I wonder, I mean, did you come to that realization purely out of working for other restaurants and seeing the way they were doing it wasn't working? Or was there another Influence that.

16:08 It led you to that belief and that view. You know, I think a lot it was just instincts and just part of me and so You know, I I've just always been a focused person, you know? And

16:22 Also two is You know, I had worked at different type restaurants. Yeah. Right. You know, restaurants had served large menu. Mexican restaurants had had so many different menu items, all that that intimidated me. Doing all those different items and doing it well.

16:39 It is very, very, very hard, you know,'cause restaurant business hard enough by doing it, but if you focus on doing one thing that I knew I could handle at my young age. And look without having management experience in restaurants, I never managed a restaurant, I just worked there. Yeah. You know, these different restaurants. So that was less intimidating to me. Saying I can I can execute on this. Alright, so you reach out to Craig with this idea and he says, Hey that

17:04 He's still at LSU, right? He's in and and And about to graduate too. Same time you're about to graduate. Well, so no Craig had because he had changed majors, had another year of college, which actually was great because I was able to graduate and come back to Baton Rouge.

17:20 And Craig was able to enroll in business classes, which he hadn't had before, but to change his major to general studies and get a minor in business. And you know, Craig and I went through the classes he could take and he enrolled in uh business planning class, which was great because neither of us had a clue on how to write a business plan. And we used that semester. of his class at LSU to write the business plan. And just to be clear, you had just graduated from University of Georgia, so you're back in your hometown of

17:51 And what W what were you actually doing? Were you working in town? I bartended at night and while Craig was taking these business planning classes, I was going to use other resources in Batonridge area. So the small business development center. service corps of retired executives. These are retired executives that help aspiring entrepreneurs or people in startup businesses. All while Craig's going to class and learning about writing the business plan, and we're applying all this stuff during the day when he wasn't in class. But at night I had to bar tings. Look, I had to live, man. I had to

18:24 Pay my rent and I had to eat and I had to drink a few beers. programs that are exist in cities all over the country, the retired executives, mentors, and so on, and you were saying, Hey, I have this idea for a chicken restaurant Yeah, absolutely. You know, I I regretted not taking a business planning class, but I was doing a crash course.

18:42 you know, and used every resource I could. I you know, not only were these professional organizations I went to, I went to every smart business person I knew. uh that started their own business in Baton Rouge and they are always willing to sit down with me and give me their advice and What what I should do. I'm curious when you were when'cause that's the most one of the most exciting times of starting a business, when the the idea is in your head and it just consumes you and you're so excited and But what happens sometimes, oftentimes is You tell people your idea and then

19:11 you get enough people saying, Ah, it's not gonna work, or you know, I you may not want to go into that industry. And and and oftentimes that quashes the dream and people move on. I have to imagine that you you went to some of these business executives and they said Todd, don't get into the food industry. It's it's a death trap. You're you're you're not gonna survive it. Yeah, you know, it unfortunately when you have an idea, you know, good or bad, but that you're passionate about. Most people are negative. Yeah

19:39 They're ill intentioned people. It's just they wanna help you, protect you. They wanna protect you. You're you're exactly right. You know I got encouragement. From the you know, the small business development center people, the service corps retired executive people, and actually the entrepreneurs that start their own businesses.

20:00 I got a lot of encouragement from them and great advice. Where I got all the negativity, which was pretty much overwhelming negativity, was telling all the other people about my dream. Who were who are all the other people? Well I mean just just people I knew in in Baton Rouge, right? And so friends of my parents. So you know, um they would say, Hey, what do you do? And I'm like, Oh man, you know, Craig and I are gonna open this chicken figure restaurant and imagine hearing that. And da da da and they're like, you know, common responsibility But didn't you just graduate? Don't you have a don't you have a uh A degree? And I'm like, Yeah, they're like, Well why don't you just go get a job. Yeah. And then if you still want to do this ten years later, then you'll have enough money and then you can start your little chicken finger as well. Very sound advice, by the way. Very sound advice. Yeah. But With every you shouldn't do that, you know, I use it as fuel. You know, you tell an entrepreneur they can't do it, and they're gonna go and work harder to prove to you that they can.

20:55 But if you're coming to me and you're twenty two and you say, guy, I want some advice, I want to start a chicken place, chicken fingers, I'm thinking, okay, interesting, but I would say, alright, but Todd, I mean what makes you think you can make better chicken now, but you know, with with such limited experience in the industry? And what would you have said? Well, I mean I did get I got that a lot. You know, you don't have management experience. You you didn't learn a lot of these things. I said, Well, I was paying attention. You know, and also is my kitchen steward of the fraternity else. You know, imagine how funny that is sounded like. That's my experience. But you know, what I would tell them is is that no, it's now. Two years is too long. You're like, I know what I'm doing right now. Yeah. don't have time. I'm gonna figure this out. I wanna do this now. And they would go, Okay, okay, I gotcha, I gotcha. Well here's some advice if you want to do this. You know, you need to write a business plan and you need to take it to the banks'cause you need money to open and that's the hardest part. And they were right. So Craig's in his class and you say to him.

21:51 Let's do this as our business plan,'cause th there's a professional business school professor who can evaluate it. Uh, and by the way, I've seen an image of this business plan online. And there's some I uh there's some names on there that I thought they were made up names, but they're real names. They're like these two Swedish guys. Like were they from Sweden, like Sweden Swedish guys at LSU?

22:12 Yeah, yeah. These guys were brilliant. It was three of them. It was Casper. Casper Odquist, Frederick Norden, and Mans Holm Grand. I thought it was a I thought they were made up names. No, these are real Were they like exchange students? Yeah, they were so they were like MBA level for an exchange team, or LSU. Happened to get paired with Craig for this project. But I'm just wondering, was was Casper or Frederick or Manns were they like, Wait, who's this guy pointing at you? Like how the how is he how is he in the picture? He's not even in the class. Exactly, right. You know, but I mean that's the brilliance of like being a college student. You're just more accepting this stuff. They're like okay, this is cool. Plus they knew they had You know, a guy that's so motivated about this, plus I knew the restaurant business, you know I mean, I knew it. I and I knew food. For example, I knew exactly what an apron would cost per shift for each crew member.

23:05 Right. And I knew that because I met with a sales rep. And so nobody had that level of of detail their business plan,'cause it's more about ideas and what they want to do. We were we were gonna start this thing, man. So I needed to know every detail of the business. You know, so I basically took my time and during the days when they were in classes, I met with I met with sales rep. I called businesses companies And got an idea of everything. So our business plan was really spot on. Plus I'm a little mildly obsessive compulsive, I know so the details were just really over the top. So you were I mean you were like Literally going to like chic suppliers and And sort of working out those numbers, like sourcing the potatoes, or or would you would you were gonna use like f flash frozen fry like did you did you figure all the details out around the food?

23:47 Yeah, so around where we went yeah, I got general numbers, right? I knew I wanted a crinkle cut fry, right? That's a really popular southern fry plus my mom cooked us or right of Crinkle Cut fries. And so let's say I wanted to do Texas toast, right? you know, meeting with those vendors, I'm like, but I want a better Texas toast, right? You know Raising Kings has is just amazing bread, right? But like other concepts out of Texas toast, they use slice bread, right? And so it's just take a loaf, it goes through a slicer. Yep and then they you know either stick it through a toaster or they do like we do, critdle. It's basically a fat piece of white bread. Right, exactly. But I'm like I want it to be more moist. I want it to be more dense and you know, what are ways we could do that to where it's not a slice bread? Well like well we can put dough balls together.

24:33 And put'em together small dough balls. It'll bake together as a loaf, but it's pull apart bread. versus slice, which means it stays more moist and it's more dense, right? That's how you work with your benders. And so when I was getting information and getting these things, I started initial talks, right? And then it was like okay, these are things that are in my head I can mull over. Alright, so you you build a business plan and um by the way, how many pages was it? Oh man, I can't remember.

24:58 Uh forty, twenty? Pretty thick. Oh no, probably a hundred. We had all kind of different um you know s financial scenarios, researching wages and different things, you know, all the in information in the industry I could find about why we would be successful, right? You know, you know, articles like I can remember, you know, we're becoming a nation of chicken eaters and finding articles on Boneless Chicken populaire and ch Yeah, going to places and uh stealing menus, you know, so I could go back and copy'em on the thing to show look, chilies a serving this, you know, and

25:32 Things like that. And it would be very hard to talk bankers into a concept that was very foreign to South Louisiana, right? You know? Yeah. Very foreign. Um, what was the name of the restaurant in the plan? Well, we start off with a name called Folley's Chicken Fingers. Follies. Great name. Yeah, Craig Cra Craig worked construction one summer he had a a guy he worked with that called everybody folly. He's like, Hey Folly, hey folly that so we call each other Folly and uh And so that's what we thought the first name would be of the rest of the folly mean.

26:00 That's a good question. He just called everybody Folly. Hey, Folly? He's a really nice guy, you know, funny guy, older guy, you know. All right, so you guys so you so you you helped them write this proposal and your name is not on it because you're not in the class, but obviously you're intimately part of this business plan. And uh they submit it. To the professor.

26:20 And What happens? Well, they went to present it, so we were up all night. We're, you know, finishing the details of the plan, you know, I'm a perfectionist. So it's like, Wait one more time, they're like, Todd is good. And I'm like, No, no, no, no. And we're rehearsing it. And um, you know, it finished the last pot of coffee, you know, early morning, whatever time it was, mid morning. And they went to go present the class and uh I waited.

26:44 I literally waited. And um and they did they went and they did it and then we all met right afterwards. I said you know. How did it go? And they were a little bit discouraged, like, uh, you know, I I don't think he was that crazy about the concept. And uh I was like, What do you mean? You know, uh w w what on earth? And he said, Well, you know, they said good good business plan, you know, incredible detail

27:09 But uh Concept. serving just chicken fingers in South Louisiana. that's known for its Cajun and Creole foods, you know, plate lunches It doesn't sound like something that's regionally what the taste are of the people to start a restaurant. Th that was for one.

27:26 you know, and I'm in my head going over all the reasons that's wrong, right? And they said secondarily Uh he said that you know That the quick service restaurant. environment, you know, fast food restaurants. You know They're

27:38 They're they're going a different way than you're going. You want to do just one basically one product, one meal. Yeah. And do just that. And look where McDonald's is going. Salad. Apple slice. I mean look it was it was two things. It was variety. is what they were doing. They were saying variety. Get as as much variety as you can on the quick service menu so you don't get a veto vote. Like meaning somebody in the family says, I veto you and then also just healthy items, grilled items, salads, all those things were becoming that was the major trend during that point, and we were basically bucking that. And then, you know, a couple of days later we got the the grade back and it was actually the worst grade in the class. But it was only a B minus. It was only a B minus.

28:22 Uh it was devastating to me. I mean as far as like I was like the worst grade in the class, if we put all this into it, this is gonna work. You know, you're just like you know, you're emotional in that and like I said, it just fired me up. But he was an easy grader and I think he gave us a lot of credit. Uh because the plan was so comprehensive. He just had to ding it'cause the concept and it you know, to be honest with you, you know, like we talk about faith, you know, it's like questioning That belief. Is 'Cause I was like

28:50 I was like, you know, he brings up these good points. But I'm gonna buck that trip. We're g we're gonna make it work. That's why it's going to work. Why don't we come back in just a moment? How Todd sets out to fund his B minus business plan?

29:05 by doing some of the most dangerous jobs in the world. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1995, and Todd and Craig are mulling over the comments that Craig's business professor made about their business plan. You know about how fast food restaurants need to offer healthy options like fruit slices and salad?

29:40 And after carefully going over that critique. They said. Basically. to ignore it. I didn't want to lose focus, right? I could have easily said, Hey, let's add a chicken finger salad.

29:50 You know. But I knew customers didn't want that. If I make the best chicken finger meal, why would you get a salad? You know, go get a salad The next day Somewhere else for some place's greatest salad. You know? Like like it and and and I do. You know, I'll eat my I'll eat my food one day. I agree.

30:08 And and you know, hearing that from a smart professor It made me think for a second, then I was like, No. you know, we're gonna we're gonna stick with our our menu. And if we add healthy items, people aren't gonna order that anyway, and it's just gonna complicate our system. Meaning lettuce produce Produce goes bad quickly. Yeah. That's gonna complicate what we're trying to do. And it's not gonna equate to sales, and I and I knew this.

30:31 So now You were determined to make this happen. You've got to Business plan, B minus business plan, but you got a plan. There's a a slight

30:40 obstacle that you've gotta overcome, which is money. Money to start a restaurant. So where did you go? What did you what did you do? Well, we knew the next step was to take that business plan. And go see the banks. You know, we needed uh we needed the money. We didn't have any. And you guys didn't have any any family money or anything? No, no, we had no family money. I mean our families both, you know, did pretty well. We're middle class and you know, they did well, but you know, we were raised to the belief that you know

31:06 Once you're done with college, you're on your own. And so, 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. Here's my plan, I need uh a hundred thousand dollars. Yeah, and I thought they would give it to you. Isn't this a great plan? Isn't this a great idea? Oh goodness gracious. And did you do that? Yeah, yeah, yeah, like we bought a couple of cheap suits and um and went to office depot, true story, and bought briefcases because you know, we had seen businessmen and women with briefcases that looked official, right? So you know, they had those cheesy

31:43 Fake leather. Boxy briefcases with the brass combination lots, you remember those? Yep. Oh man, they were iconic, you know, and so we went and we went and saw every bank in town. You know, we'd walk in and you know there'd be a loan officer there, you know, he or she and they were nice enough, you know, and so we walked in with our suits and I had a briefcase, Craig had a briefcase, and

32:05 We would put it on their desks, sitting across from in our chairs, and we would open the brass combination lock like somebody was gonna steal our chicken finger business plan. And look, they were all nice enough, uh to us. You know, they were they were nice, we went through it. Uh but the common answer was, you know, this is not something that our bank would would lend towards. You know, the restaurant business is, you know It's ninety percent failure rate. and you know, you know, franchises are the things that work'cause they're proven systems. You both have college degrees. Why don't you Go work in the industry.

32:40 and get some management experience and and save some money And uh and then come back and see if you really want to do this and really wanna start your own uh your own business. In the meantime, were you like experimenting with chicken finger recipes in your apartment? Were you like frying up chicken for friends and and trying out different spices and 'Cause you you had the idea for the sauce and the chicken

33:04 And the Fries are another thing that's cringo. But the I mean were you doing that? No, not really. My focus was getting the money. Get the money and at that point.

33:13 Work with the vendors to tweak the recipes to to get a better product and do that. For example, like doing the business plan, I asked about spices. I thought it'd be just simple. Right. I need poultry seasoning. Yeah. I thought that'd be simple. It's like well there's six grades of poultry seasonings and one cost, you know A hundred bucks a box and one cost five hundred bucks a box. And I was like, Oh my goodness. You know, I didn't know this, you know, right? So I knew I'd have to come back later to be able to tweak with the vendors, which I did. So the idea was you would have a uh this kind of recipe that you would come up with or you would have a flavor that you liked. The

33:46 third party vendor could make it and then deliver it frozen or something like that and then you would fry it on site. No, no, no, no, no. I knew all I wanted to do everything. that I could from scratch in the restaurant. Yeah, a hundred percent, you know, a hundred percent the size. So I wanted to get the raw chicken, right? But I needed my vendors to tell me why that chicken tenderloin was the absolute best part of the chicken, right? I needed my vendors I knew I wanted to crinkle cut fry, but I need my vendors to tell me the difference between You know, a grade Triple A versus a grade A. Because I grew up cooking, but I didn't know the fundamentals outside of Cajun cooking.

34:19 You know, as far as other restaurants. But no but there was no point when when you were building the business plan where you were just like frying up chicken fingers for friends to say, Hey, you gotta try my chicken fingers. They're amazing. So a friend reminded me, you know, a couple of years ago, do you remember when you were doing different sauces that came up to cane sauce and you had us all try the cane sauce. Because yeah, you had a bunch of us in there and we were trying the different ways of of of the cane sauce. And so what I remember going over was I wanted a flavorful sauce. But I didn't want a Cajun sauce, right? I didn't want this to be a regional

34:54 Cajun thing. Exactly. We would have cayenne pepper in it, and everybody was like, You're gonna you can put some cayenne in that I'm like, No, no, no, black pepper Is and that's no secret'cause you can see the black pepper fakes in there. Black pepper's gonna be that base on that. I don't want this to be Cajun. I I this is this is a chicken finger restaurant and they're like, Well man, it's but it's caged. I say, Well look you don't when you order your pepperoni pizza, it doesn't come with you know with uh cayenne pepper and uh and you know, and and doing that does it. Oh yeah, good point. Okay, so the banks are saying

35:28 You're you're not gonna get the loan from the banks. You don't have access to family money. So you have to How much did you did you think you needed to raise? Uh ballpark was a hundred, a hundred and fifty thousand dollars was what in my mind I thought we could start it for, and that's without knowing the location. Right. Craig still has one semester left in college.

35:51 I'm bartending. We have a business plan, but we just got turned down by every bank in town. And so I'd put the word out there by my friend group, I have to raise a bunch of money to open my chicken finger restaurant. And y'all know how to make some quick money fast. I'm willing to work hard and do anything. Luckily Through a friend of a friend.

36:10 You know. I got to meet a guy named Carrie Travis who was a foreman for Louisiana Cruz doing turnaround shift work in refineries. And he said, Well that's great. Yeah, you go for your dream. Are you you know you're willing to do some hard work? Yes, sir, you know.

36:26 Are you willing to work ninety To a hundred hour weeks, absolutely. Seven days a week. Absolutely. Uh Okay. You seem excited, seem like a hard worker. We can teach you that business. It just It takes a certain person that wants to work that hard in those conditions in their finery.

36:42 And luck would have it, I got work. uh doing turnaround shipwork. Uh the title was Boilermaker. And refineries in Los Angeles. Wow. So what did you do? I mean you had no idea what this meant. I mean you grew up in Louisiana, it's an oil state, but doesn't mean you know anything about oil. What did the job actually mean? What did you do? Yeah, so you know, I had to learn all of it. Um I had no idea what being a bowler maker was. All I knew is you were gonna make uh a bunch of money in a quick period of time and work my butt off, you know, that was it. And a little bit dangerous. Um so what happens is when you know, when they shut down a certain section of their refinery to bring it up to date, right? You know, these things have been running for

37:20 many years and so there'll be to be safety upgrades, technology upgrades, uh just replacing and doing provenative maintenance. So they bring in boilermakers which I love that term, boiler makers. I thought that was a cool, cool, cool term. Uh you go in and do this work. And look, I learned great things like You know. cutting things with a torch, you know, like you have this hot rod you're holding with basically battery cables going to a lot of juice and you can slice the metal like butter, you know, and we cut these things out in pieces and and then bring'em out the tower. It's hot, right? Hot. It's all get out,'cause you're wearing these complete jumpsuits, right? You got your hard hat on, you got your goggles on, and if you were in there like I I I picture if you lit the whole thing on fire and you're walking through, that's kinda what hell would look like. You know? It's just a it's a pretty hard work environment, but at ninety hours a week you get quite a bit of overtime.

38:12 This is 1995. How long? Did you Do Work as a boilermaker. Yeah, it was probably about a four month period of time.

38:22 And presumably while you were working in Southern California, this is when you first encountered In and Out Burger. Absolutely. You know When I went to In and Out Burger for the first time, I never even heard of In and Out Burger'cause you know, it's a West Coast thing. I'm a Louisiana boy. And when I went out People talked about, you know, man, you gotta go buy in and out burger. Great, what do they have? Uh burgers. Great, what else? Uh fries. Is that all? No, they got shakes. Oh my goodness. That's

38:48 That's what I'm trying to do at Kane. And man, and I saw the lines the lines and taste that burger and God, it was amazing. And they could serve it quickly. and then learn the company history. Since nineteen forty eight they've been doing this. So if you imagine as all the other burger competitors, you know, they all opened around them and they added everything and did everything, but since nineteen forty eight

39:10 In and out burgers been doing the same thing. And doing extremely well. Yeah. And it gave me Just a lot more confidence. On uh knowing that my my concept would work. Yeah, and I wish I had as an example. I wish I could have said, Hey, look at it out, but it's nineteen forty eight and they're still doing great. So you

39:27 You spent about four or five months working in refineries and do you remember how much money you you you earned over that five month period? You know. I wanna say going out working in the refineries as a bowler maker. I think I made around twenty five, thirty grand is what I made, which is big money for a you know, a twenty three year old kid.

39:46 And so um I guess after four or five months of doing this Uh From what I understand there was a fellow boilermaker who Who said to you, Hey, if you want to make Big money you should go to Alaska and go to a fishing boat. Is that is that the story?

40:00 Yeah, you know, everybody bowler makers give each other nicknames. It's actually uh there's great camaraderie. uh among the group. This was the first group of people that believed in my dream. They were encouraging. You would talk about it with everybody. Yeah, I d everybody, they all knew. All these buller makers working at Shadower knew I was out working

40:18 these jobs then because I had this chicken finger dream. And they were all encouraging. And you know, and and everybody gives each other nicknames and so the group said, Hey, have you met Wild Bill Tolar yet? And you know, like I said, everybody's got a nickname. I'm like, No, which one's Wild Bill? And why should I talk to him? He said, Well he's the big guy over there And he does Alaskan fishing and you can make more money there anywhere else. And So I went and talked to Wild Bill and told him what I wanted to do and he had heard my story.

40:44 But he's like look, it this is real dangerous work. It's uh commercial fishing. Uh for Saka salmon, yel netting. in Kneck, Alaska. So about the point when I was wrapping up my buller making uh career Craig was graduating from college and I called him on the road. I said, Hey man uh I met this guy, Wild Bill. He's like, Wait what? And I'm like, Yeah, yeah, I'll tell you about him later but he spends his summers commercial fishing.

41:11 in Alaska and he says we can make a bunch of money real quick. But It's gonna be really hard work and it's very dangerous. And Craig said, Okay, let's let's do that and so we flew into Anchorage, Alaska. Then we flew to King Salmon, Alaska to Little Plane.

41:26 We hitchhiked to Natneck, Alaska. And we went to Tent City where they had a you know a little area where you could it's on the tundra where you could uh put your tent. And uh then proceeded to go and talk to every Yeah. But you guys Both

41:48 do wind up getting jobs. Uh to work on fishing boats at some I mean I should mention this is super dangerous work, right? I mean I I I actually looked this up because that summer that you were actually on a fishing boat in Alaska, uh There were six deaths. Six deaths in you know among salmon fishermen that summer of of nineteen ninety five. And it's like nonstop work, right? It's like you're all you're fishing all the time. Yeah, you know, this it's the the the salmon fishing trade at this point too was just incredibly lucrative. And what we were fishing for was Sakai salmon. Yeah. Which the Japanese bought uh I wanna say like ninety five percent of it because of the quality of the meat. So stakes are high and and it's very competitive. So

42:30 What captains, motivated captains would do is they play chicken. And uh I don't know if it's still okay to do that, but man, it was back then. And man It would hit other boats. R I saw other boats ram other boats. You saw other boats sink. Actually the boat Craig was on, the captain rammed a boat and it did sink. Wow. And it's a It's it's mostly dangerous. Because You're so tired. Yeah. You're so tired so you get you get careless, right? So someone gets thrown out with a net, or someone

42:57 doesn't get their footing when they're in seas and they break their arm, or you know, we're getting these reports, just someone gets scalped because the net thing broke off and went over. Or someone rammed your boat, or you know I saw two boats get nets caught up and someone threw a can of pork and beans and hit a guy on the boat. I mean just crazy stuff. totally nuts, but clearly you you had a single track mind here. You knew that this is what it what you're gonna do. That season ends. And you've got around I guess around fifty thousand dollars, right? That you've saved. Yeah, yeah. A lot of money.

43:29 And you go back to Baton Rouge and presumably Was this it's still not enough? to launch the business though, right? No, we didn't have enough. And and and we knew we knew we wouldn't have enough coming back. But we knew it could be a great start and

43:45 Before we went To Alaska. We had located a great piece of property, I mean, absolutely perfect for our business at the North Gates of LSU, where I always wanted to open up. Actually a good friend had told me this place came open and we met with a realtor, a guy named Red Reynolds, uh rest his soul. I mean what a great guy. And he bought into our more than anything, he bought into our passion.

44:09 And so he said, Hey I know you boys will work as hard as you can to make this place work. And the place had turned over so many different times because these different college entrepreneurs would start something and then it wouldn't work. And then the last tenant was a bike shop that's actually still in business, but they moved next door. Right. So we had the we had the place and so after I finished the commercial fishing Alaska, Craig had went back and I got a job uh real quickly working as a sport fishing guide, which was just amazing work. You know, it was Alaska, it was incredible. The salmon run, taking fishermen out, you know, there and fisher women women out. There was bears and eagles, and it was amazing. And actually Craig called me and said, Hey

44:49 Uh Mr. Red says you need to get your ass home. And I was like, Are you kidding me? He goes he goes, Yeah. I said, Tell'em I'm making money. He goes, No, you're not making the same money you did uh when we were commercial fishing. So he said, Get on back and open this thing up. So and I got on a plane that day and flew home. So this this location became becomes available. It's it's uh I guess Presumably the fall of ninety five, right? Or early early winter maybe when you're back in in Baton Rouge. Absolutely. And I knew this site we had it, but we didn't have the money to get it yet.

45:16 And so What we did have though, we had a year into this project. And I had originally talking to business people, you know, about it, would you ever be interested in in investing in this? And people started to listen now. It's been a year. It's been a whole year and you've stayed with it, and now you know, you went to Buller Making Refineries, Craig went commercial fishing Alaska. Like I think maybe you'll make this thing work. Two of my investors.

45:43 were bowler makers. that I had worked with, right? They they live these is like ten thousand dollar investors, five thousand dollar investors. One was Mr Red Riddles, our uh Realtor. Uh another one was a high school friend that actually worked buller making with me out there. He said he said, You're gonna make this thing work. And then my bookie of all things, my college bookie. He paid cash. So did they get equity? Yeah, absolutely. The preferred shareholders got equity into that first location. Um actually as we continue to grow. uh they want to be along for the ride. So we uh so we carry them over in a in a capacity and uh still have

46:19 most of the original shareholders. A lot of them got out different points, you know, of of growth. But we still have uh still have a handful of the original investors. Wow. And then We were able to talk to an SBA lender. And I didn't know what that was originally when we went to the banks, you know, and they're like, If you raise ninety thousand dollars, we'll give you a fifty thousand dollar loan. And you remember that number I had, about one fifty in my head, and you know I'd spent a bunch of the money to live on. I was like Bingo.

46:44 Wow. All right. So you uh you raise the money. You Get the SBA loan. You've got the location. And I I I think it was it was it been like a former bike shop, is that is that right? Yeah, th this location was ideal. And and cheaper in. I think it was like fifteen hundred bucks a month. And I ended up getting like after options like fifty years on the deal. It even had a billboard on the location. It was just ideal. And

47:08 And and but it was a good deal for the landlords'cause the old building was dilapidated. The old parking lot was dilapidated, and look, we were we were going in and doing all these improvements and So you got a fifty year lease. With all with options, yeah, absolutely. Alright, so you get a bike shop, how do you convert that into a chicken finger restaurant? You gotta have fryers, you've gotta have a counter, you've gotta have a drive-thru window, you've gotta have that that much stuff, but you still need a bunch of stuff. You got to turn it into a restaurant. And and you've got 140 grand. Was that enough money to convert into a restaurant and also like set up a drive-thru? Barely. Barely, barely, barely. But this was great. This is the best part about it, because you know

47:45 I didn't know anything about construction, but I could learn. Right, and I could do it cheap. I mean we originally got a contractor and got a bid and it was like over two hundred thousand dollars. Like well, we don't have that. And so uh I finally met a really nice man who said, Look, I'll help you. You can do the work you can, I can pull in experts when you need it. I knew a little bit about, you know, industrial construction with work as a bowler maker, but nothing about regular car Carpentry, electric, you know, plumbing, uh, all that good stuff, but I learned. And I learned it. And so, you know, we got a jackhammer and jackhammer it off the back, concrete. We learned how to do plumbing. Uh, we learn how to help out electricians. You know, we could save save money and get actually a real electrician to do things, but we could be the helper putting the pipes in, doing this stuff. I mean, So you're like completely gutting and and opening trying to open this restaurant. And by the way, the name was going still at this moment was going to be Folly's Chicken Restaurant?

48:38 Well, so we kinda got all Follies and we kicked around the idea of calling it Sakai's chicken fingers. Because of the salmon that we fished. For Alaska. Luckily we're telling a group of friends. And uh one of'em told us hey, we think that's a terrible name.

48:55 Chicken fingers. Yeah. It makes bacon salmon salmon chicken fingers. Exactly, right. I'm like, well look, we gotta get some signs made for this place, and so you know, that's the best Cracking I got. You got a better idea. And uh I had a yellow lab then, it was Raising Cain the First. Your dog was called Raising Cain the First? Yeah, well, it was just Raisin Caine. He was he was the first. Was he named after the Brian De Palma film, Raising Cain? The horror film? No. My sister named him. I see I didn't know this until I did research, but raising cane is an expression. It means like to cause trouble. Yeah, you know, raising a little hell, having a little fun. And so uh she thought that was a good name and the name stuck and You know, anyway, so when we were doing construction, I would have Kane

49:38 out there. knocking around. People in the neighborhood knew the dog, you know, and I brought it around. But you know, we all of a sudden we have a we have a a not only a good name, we got a good mascot for the restaurant and people in the neighborhood knew the dog and so that stuck. All right, nineteen ninety six, you finished the renovations I mean, I'm just curious. You n you were going to make everything in house. You were gonna

49:58 have the chicken, you know, marinating or in buttermilk or tenderizing, and then you're gonna hand batter it and fry it in the restaurant. No, we we wanted to start with some raw products. So number one being chicken and knowing that the absolute best and most tender white meat part of the chicken is the chicken tenderloin. Yep. Under the breast. You can cut it off, right? Yeah. Yeah, you literally put it and it's a whole muscle product and so it's perfect and we knew what size we wanted and then they'll talk about what size bird that comes from and I always went For the highest quality. And that paid off.

50:30 because people will pay for quality. Now I didn't price my menu accordingly. And and I didn't make much money till I finally adjusted our pricing, but always went for the higher quality and what we could do in house. Like our sauce. I knew we could make that in house, our garlic butter, I knew we could make that in house. And and that freshness of making your sauce in house, you know, we we evaluated that. versus having a place make it for us and putting in a you know in a little packet that's vacuum sealed that you have a peel off was night and day to us. Hm.

50:59 And uh by the way, I think right around this time, uh, you also started to date The woman who would become your wife, Gwen And uh and what I what I love about the story is that from what I read, she was actually a McDonald's franchisee, is that right? Yeah, she sure was. You know, I met Gwen uh although we went to high school together, uh we didn't really know each other, but I met Gwen and I told her the story about, you know

51:25 I'm gonna open this chicken finger restaurant. And she lived by LSU too. She goes, Oh, you're the guy that's doing that She's like, Good luck. And I'm like, What do you mean? And she was like playing with me. She goes, Look, I've grown up, my my parents have been McDonald's franchisee my whole life. She goes, I'm gonna franchise McDonald's. I mean, she grew up flipping burgers, right? And she's like c and I go with the sure thing. McDonalds franchise. She goes, You're crazy. You're totally different you know, different than me. You're an entrepreneur with this crazy idea, but good luck to you. And so I asked her out that night and but I said, I don't know when I can actually take you out on a date.'Cause you're busy. You're working all the time. Exactly. And and so anyway, I eventually was able to take her out one night and and uh we really hit it off and And it was fun because I tell you this'cause

52:03 Like we got to talk about things like how do you salt your fries? You know, you know, how do you uh how do you motivate your crew members and uh And we also she understood the business. and appreciated how hard it was. You know, and so so there was never a why are you working so much or things like that. I mean look, she would open up for breakfast and we would cross paths when'cause I closed down for late night. You know, there'd be weeks we wouldn't see each other. But yeah, she She individually opened her uh her franchise in Brulee, Louisiana, across the river here in Baton Rouge, and was a really successful franchisee for McDonald's.

52:36 Alright, so you got this restaurant. You got the name. You've got all the things in place. It's nineteen ninety six. You're ready to open. Do you remember what was the date that you opened? Yeah, August twenty eighth, nineteen ninety six. All right, so hot day.

52:52 In a hot summer Sticky. Humid. Cut it with a knife. And you're serving hot.

53:01 chicken fingers and hot French fries but cold drinks. And you open the door and I'm sure friends and family know, and was it crazy? Was it a mad rush? No, a actually quite the opposite, because we had all our friends and family come, you know, the days before opening'cause we needed to practice, right? We needed to practice, come in and do tweaking final recipes, Okay, try this sauce, doubt dip your chicken finger with this sauce, you know, that sort of thing. And so they've already tried it. They're they're actually they've had their chicken finger filled for a while. And I couldn't tell, you know LSU community when we're gonna open because it's a good thing. I didn't know when we were get the ro uh registers program. So literally I'm like, all day they're working on these things and I know, hey, I got the fryers ready, drive through's working.

53:44 You know. When are we gonna open? And so finally, sometime at night, it might have been ten o'clock, whatever, it was like we opened. You opened at ten at night. Yeah, yeah, yeah, yeah. But one day we were just like, Let's open. Because we finally got the registered work. No flyers, no like advertisements, nothing. No like brand opening. No ribbon cutting ceremony. Nothing. And you know how we got people? Nothing. I walked out front.

54:07 And you know, it's a bustling college area and started waving customers in. Hey, we're open. We're open. So a few customers started kinda trickling in. But When the bar crowd Got done at two o'clock. Oh yeah. Then people started coming. They're hungry. So you had to be open late,'cause it'cause that they're they want

54:28 They want fried chicken. Yeah. So they started coming and, you know, mostly dying in'cause it was people walking from bars and they wanted to continue their night, but a couple of people in drive thru. And then word started spreading. And then we started picking up. And I couldn't get out physically get out of the restaurant. Because I had to be frying chicken.

54:46 I mean we we we were opening up. You were your guy tried to chicken and Craig was at the register? Uh yeah, and vice versa. We would just kinda, you know, work wherever we worked, and we were open from ten thirty of the morning till three thirty at night, you know, seven days a week. And so uh we had hired only uh you know about a dozen crew members. We were w really understaffed. We didn't really know what we're doing. And uh and they were all working just crazy loads, and we had a nap schedule. I actually got an apartment right behind the original Kane's upstairs. It luckily it came open right before we opened. And we would just take different breaks and go nap. And uh you know, by the time you close the restaurant at three thirty and you clean everything up, you'd be about five thirty, and they need to get there back about eight thirty in the morning to open up again. And so uh so I couldn't get out there and and and do advertising and things like that, but luckily it spread around LSU and our story got out. Uh about

55:36 about who we were and what we were trying to do. Ара,<unk>чид є дрем. You you got your restaurant. You got your college Hang out. Late night.

55:47 Post partying restaurant. This was your dream. You're like twenty four. You've achieved it.

55:54 You're done. But of course that was not the end of the story. there was gonna be a second store. And when did you When did you come to the realization that actually this was not a one off, one location business? You know

56:07 Seeing the popularity with the students didn't surprise me. I knew they loved the concept. I knew they'd love it. Um I was excited and and actually surprised on how quickly semester we were open. of our volumes. You know, we really did well. I mean look, our first month we made thirty bucks in profit. Thirty bucks in profit. And and when I told people they were like, Oh, I'm sorry, that's all I'm like That's all. I mean,

56:34 That means I'm positive. It meant I could pay my crew, I could pay my rent, you know, I could pay my vendors. Like that's amazing. Like y'all don't understand this doesn't happen in startups. You know what I mean? And from there the next month we made more money, we made more money. And you know, this went on for me, it was that first semester And I just really got the bug. I all of a sudden started realizing how to be a better leader, a better manager, and I started hiring more people. And I'm like, wow, we can do one on the other side of campus. It's a different traffic flow and it's there. And I started thinking of that that second semester. It is now nineteen ninety seven. Early in that year, we had been open three, four months and then I started thinking about growth. Now here's a question I have about the quick service restaurant business. If i i from what I understand, if you open up uh uh one location, so called fast food restaurant, you know, mom pop kind of place. It's really hard to make significant money from just one location. You actually have to have more and multiple locations to really begin to create an economy of scale and make money. Is that right? That is that is so right. Yes, absolutely. You know, I mean it's quick service restaurants make tiny margins on large volumes. It's just what it is. And

57:50 Look, you can have a whole family work in in a restaurant, and I know a lot of great family restaurants that do that. So you you lower your labor cost and everybody kinda lives out of it and you expense things out of it. But it's not the way to garner wealth. When you open multiple locations, you actually get buying power. Right. You get uh you know you get you're you're ordering more product, so your prices go down, your margins get better. It's a really tight margin business. I mean did you Did you Have to get another loan to open that up, or did you have enough cash flow? to take that money and and open the next location.

58:26 Well, you know, I do I wanted to design a building and and do it. And so I went back to those original SBA lenders that lent us that fifty thousand dollars. And I told him, Hey, I want to do another location on the other side of campus. uh the numbers were good and uh we were able to actually go in get a SBA loan for the same lenders and actually Buy the piece of property. Build a building.

58:50 From a ground up and open up just eighteen months, just eighteen months after we opened the first location. Wow. Yeah, I mean uh you can imagine just in in short order, I mean I opened the first restaurant when I was twenty four years old and now here I am out to open it up when uh before I turn twenty six years old. Wow. And and look, brand spanking new equipment and you know brand spanking new furniture and nice landscaping and everything. And I mean you talk about, you know, feel like the Taj Mahal to me. Well here's a thing that I did not know until I started doing this show seven years ago, which is It sounds amazing when you go from one

59:26 location to the second in the food business. But actually oftentimes that's the death knell. That's what kills businesses when they open the second restaurant because they get in over their heads and then it takes the entire enterprise down. Man, it's uh it's so true. Uh there has never been a harder growth period at rays and cane's over the past twenty five years. Then going from one to two. Going to one to two. Never been a hard growth period. The rays and cane is going from one to two. What was so hard about it?

59:52 Well, you know, it you get excited about it and you're like, Wow, we're gonna grow and then then you then you grow and then you realize, Wait a minute, you know, I can't be at two places at once. And so I lived at that first restaurant. Now I got a second location. And I have to split my time. I literally was like, Holy cow, now I got people and I got new managers, they're not trained well enough, then all of a sudden I have double double the workload and this and when I opened that second restaurant, man, it was it was it was really busy. You know, it it got frantic. It got really frantic because you know my manager would quit. I mean so wait a minute, I don't really have any more time in my day.

1:00:27 But I have to cover all those shifts until we can, you know, hire a new manager or train a new manager and uh I wanna say I learned my lesson then, but uh it took me years to really learn it, to not stretch myself through growth. But I think that's what happens when people grow one to two. Yeah. It it multiplies, you know. Exponentially.

1:00:51 When we come back in just a moment, how Todd deals with yet another blow. Just as he's adding that second restaurant. He loses one of his most important assets, his partner Craig. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Welcome back to How I Built This. I'm Guy Raz. So it's 18 months after the first Raising Cains is opened, and Todd is dealing with the growing pains from doubling the business. He now has two restaurants located at opposite ends of the LSU campus.

1:01:35 We were very busy uh at the second restaurant and the first restaurant was busy. So sales were there. Profitability was there. It was just in the in the under staffing and with people quitting and not showing up, I would burn out more crew members who would quit and it was a cycle, you know, of what was going on. And that's when Craig came to me. And said hey man, you know Whenever

1:01:58 You can, I want you to buy me out of the business. Uh, which was uh You know, it it hit me as a shock and I'm like, Craig, Craig what are you doing? Yeah, this is working. Like like like We work so hard. I mean, you fished in Alaska for this. You the from one to two, you put in all this work and effort and it's actually working. We're cash flowing. And he said, No, no, I I know that and I'm very proud of that, but he says The restaurant business isn't My dream.

1:02:23 He was burned out. It's not my deal. You'd burn out and it's he says it look, it's it's it's just it's not what makes me happy. He said I love the starting of the business. Yeah. And all the business side of that. And he said, like, for example, Todd, if I get a night off, I'll go home and read like the the Wall Street Journal. Yeah. He goes, you'll go home and work on better ways to train crew members are better ways to do the schedule. And he says you're this is what you love. And Craig's just one of those people doesn't measure his uh

1:02:49 success by the thickness of his wallet. You know what I mean? He's like He's like, I wanna go do something else and he stayed with me because he said, I know it might be here a while because we're so under staffed and we gotta get it right, but I mean for months, for months. And then when I got staffed, but he went back and got his MBA I was actually able to hire Craig back later years later to do uh uh to help us be like CFO and uh technology and all kinds of uh other parts of the business he liked. Nineteen ninety nine.

1:03:15 About two and two and a half years in. He he steps up. He steps away. You buy'em out. Um and you're on your own. Without your partner.

1:03:25 And Friend. uh to run this thing. I think at that point you had at least two locations and And we're looking to open a few more. In and around Baton Rouge.

1:03:35 When Craig left the business, I went through a period and I don't know if it was Depression. It was or if it's a fog or or how to really describe it. It felt like I had a bucket over my head full of water. It was just this, wait a minute. It's just me now.

1:03:49 And this might have lasted a couple of months and it was like a fog and I go to work, but I was just not really there. And All of a sudden I popped out of it, you know, it was a couple of months in and then I I popped out of it and I was like, You know what? I love this business. And I wanna grow it. And the reason I wanted to grow outs of just, you know, seeing we grow teams and what we could do in the community.

1:04:12 It was The fact that the South Gates of LSU location. It wasn't just students that were coming in. I mean they come in You know.

1:04:20 late night, late lunch and things like that. I was having business women and men come in during lunch. I had like T ball teams on Saturdays, I had churchgoers on Sundays. I mean I was like, wait a minute, this concept I thought was just a college concept. Everybody's liking it. I mean this thing can grow. I can be on different corners. You know, I can be like McDonald's, you know, and as luck would have it, again, there was a man, Dr. Hill in Baton Rouge, one of my my good mentors.

1:04:48 And he has started like a double drive through burger chain, like rallies and checkers. Double drive thru meaning you pull up and they come out. Yeah, no dine in, it's no dine in, it's just like two lanes of drive through going different directions, either side. These little tiny buildings. And then they have like four locations left with their best and with their best crews. And they said, hey, look, we wanna be in the rental business, you know, we wanna be mailbox money, we're not restaurant operators. You got a great concept, you want to take over these four locations.

1:05:17 And at first I was like wait a minute. Like that looks to me like it's a Like If you did a movie making fun of fast food, you know, it'd be these little buildings, right? You know it's like that's not my crew, that's not our culture. But then I was like Wait a minute.

1:05:33 Like it absolutely is a great way to grow. So uh I talked to my team and we did it, and then we we opened four restaurants in four months. We gone from wow, two restaurants four us in four months, and then the next month. On the fifth month, we opened a mall Food Court in Baton Rouge at the Mall, Louisiana. because I wanted to prove that we could work in mall food courts as well. So that was five restaurants in five months. So once you're

1:05:57 In and around you're all over. Baton Rouge now. At at some point, you know, within the that that sort of first three, four year period. Did you get people coming up to you saying, hey, I'd like to Can I franchise this thing?

1:06:09 Can I start a location? Yeah, like crazy, right? Because we they could see the lines of the restaurants. They love the product. So people love the concept and they wanted to franchise. They wanted to bring it back to different areas, but look, this is my baby, you know, it was absolutely my baby. So I'm like Man, I absolutely don't want to franchise to people that aren't operators. Like if you're not a operator, if you're not If you're not in this business, you don't realize how hard it is. But I did see franchising as a great way to expand the concept with experienced operators. Yeah, when when did that happen? I mean we've we've done um you know many interviews with different industries in the past. Um five guys who did five guys on the show y a few years ago

1:06:48 That model, the franchising model, really is The sort of clearest way. to scale a business rather than than try to own and operate every single business, every single location. Yeah, I mean that's what I thought. I thought that too. Uh that was my original plan, you know, and

1:07:05 couple of things happen and these are some hard lessons to learn when I started all this. So my first expansion, you know, out of the state of Louisiana Uh was around two thousand four, two thousand five. So down. Yeah, yeah, Dallas and Houston. And it's this is eight eight, nine years into it. And we got our butt kicked. You got your butt kicked in Texas? Oh yeah, absolutely, because look, I I just

1:07:28 I just thought and this was being cocky. That you know, we'll just open a location like we do in Louisiana and everybody'll come. Yeah. You know? Of course. And not the case. Not the case. Louisiana had that original LSU start. And so people around the state are all fans. They knew about it, right? Well you open in Dallas and Houston.

1:07:45 And I'm not open by the campuses there. I'm open up and Louisville and off of West Timer and expensive leases And uh also putting inexperienced managers. They never opened in new markets. And I put'em there. I didn't support them. I didn't have a company's marketing plan. And man, we lost some money. I mean, we really lost some money, yeah, absolutely. Because people just didn't know what it was. It was just another thing and cars would drive by, people pass it, they had no idea what this was.

1:08:10 Yeah, they saw a big fancy building. I mean, we're building nice facilities now with this sign that says Raising Cains Chicken Fingers, and they're like, Huh? And uh those are some hard lessons learned at that point because you know uh I I basically got too confident and then we had to restart over and I had to go into those communities, help the management better, actually replace some management'cause they're different skill sets, bring them back to our other restaurants, build comprehensive marketing plans. They really go after getting those restaurants to where they actually get cash flow and stop losing a lot of money. Once once you started to franchise to to sort of pursue the franchise model. And you've got people, right, paying you franchise fee and then

1:08:49 Th there's a risk there. Wh where you do start to Potentially lose control. over how they're gonna

1:08:59 Operate the business. I mean There must have been some tension. With with operators, owners.

1:09:07 to your specifications. Yeah, you know, franchisees, uh it's tough because look, they're putting their money into it, their belief. This is their business that you're franchising to them. And you know They have a lot of say in in in You know, if you talk about the entrepreneur that that built this from the ground up, who wants it to be done perfect. I mean I'm a perfectionist. On the dealer's gonna be tension. But yeah, we had some knockdown drag outs, right? And and they saw some things different ways. Now not on standards, not on

1:09:38 quality of food or taking care of our crew and giving back communities. But look, no, we don't need to do it that way. We don't need to be open those hours. And you only have so much say. If you say we recommend this price for your meal, but they're like, no, I like this price better, you can't make them do that. And uh and that's actually good laws in place. you know, to protect franchisees, but it look it it does didn't bode well with me. Uh I loved all our franchisees. We've We've since bought most of them out. But anyway, I had a lot of challenges. You know, with not being able to maintain the control that I like and not being able to go fix their problems for them. And so um, you know, it it it didn't take that long for me to realize that franchising was not the way that I personally wanted to grow.

1:10:22 Who I wanted to grow with, I realized at that point was I wanted to grow with our internal, which we call general managers. And I'm like, those are the people I want to partner with. And those are the people I want to grow with. Just out of curiosity, what percentage of your restaurants today are owned by the Raising Kane's corporate. Yeah, by me, I'm at like ninety I would say ninety five percent. Wow, so you really are

1:10:44 Um it's not But this is not a traditional franchise model at all. No, no, this is this is a company owned model. It it started off because of all the obvious reasons to do franchising. It just didn't fit with my personality. So as you kind of transitioned from you know, these few restaurants in Baton Rouge and then to Dallas and further out. I have to assume it wasn't banks that were financing this anymore. You had to become You have to go raise capital. You had to go kinda look for investors.

1:11:11 Bigger investors. Yeah, you know, um I had to get clever. Right. Yeah. So you know. This is a long time ago and banks were different.

1:11:19 And so Uh, this is when Craig was CFO of the business and I was I was like Craig How about this concept? we had some angel investors, you know, namely this guy Dr. Hill became a mentor of mine that had those original fast tracks. But I went to Doctor Hill, I'm like, look.

1:11:35 That From This location we're gonna do. I don't want any other owners in the business. I don't want to give equity. But I'll give you

1:11:43 A fifteen percent guaranteed. Interest rate. Simple loan, one pager that's gonna be subordinated to the bank. So Mm-hmm. If you lend me two hundred fifty thousand dollars and subordinate to the bank,

1:11:56 I'll personally sign a note to you, subordinated Lone. At fifteen percent I'll sign it. You know, and you'll have everything I have. And

1:12:05 It worked great for Doc. He thought it was a great investment. Now What I would do with that two hundred fifty thousand dollars for that subordinated note. Craig would then take it to the bank. And we go to these community banks.

1:12:16 And basically that subordinated Dad. was considered equity. Yeah. So I would do a location. We'd start off this way. And we'd have immediate cash flow because why? Sales were in, but I didn't have to pay my rent for thirty days. I didn't have to pay my f

1:12:31 food vendors for two weeks, my crew for two weeks. So we got into rapid growth, I was creating cash and generating cash to put in the locations and I keep going back to these angel investors, support data loans and using we had a network of so many different community banks all over uh that we were doing uh they wanted that business. Now That is not the proper way to leverage your company, but I was in my twenties and I was stupid. You were stupid you were stupid, but the flip side is you maintained your Your equity stake. You didn't have to give up too much of your ownership. I didn't give up any, yeah, absolutely. Wow. But I got the ultimate lesson on financial security. When Hurricane Katrina hit.

1:13:11 And we had twenty one of twenty eight late locations go down in the area and that cash flow stopped. And you owned them all. And we owned them all. And that cash flow I was doing that came, all the expenses came and we had zero sales. Now, luckily we formed as a team and we were able to reopen quickly. And we got out of that crisis, but if I couldn't of, I could have really, really hurt our company. Because

1:13:34 You'cause you basically took out all these different loans and so you owed p lots of people lots of money. I owed banks and I owed uh owed angel investors, that subordinated uh subordinate loan. You mean debt to equity You know, you should have proper balances in your business and that helps you get through tough times like a major hurricane, right? But I levered everything. Now Interestingly enough, I didn't have to go get any capital per se. I didn't have to get any partners, right? Uh luckily I lived through that. But uh That's when I really learned to balance risk.

1:14:04 Alright, so about ten years in, two thousand six. You've got about I think of roughly hundred and fifty locations. in the US mainly I think in the south. and Midwest at that point.

1:14:16 I w I wanna ask you about chicken. For a moment here because you had seen Ten years earlier. That chicken was gonna be This thing that we're going to do.

1:14:25 was gonna explode. kind of move away from burgers. That didn't entirely happen. I wonder Did the sort of

1:14:37 Chick fil A Popeye's phenomenon that really began in the two thousands. Also have that same impact on your business? Yeah, I think so. You know, it's you know w It rises all ships. So When Popeyes went crazy the chicken sandwich wars, right? We're not known for our chicken sandwich, but our sales went up ten and fifteen percent because people were talking about chicken sandwiches and they were coming and buy our chicken tenders. It made people think more about chicken. And the chicken sandwich wars were that was really like KFC Popeyes, right?

1:15:05 It was uh Chick fil A and and and Popeye's when it started, then then everybody jumped in. That's what I'm wondering. I mean, ten years in You know, you're you are Hundred fifty locations in ten years, amazing, right? But at the same time you're watching all these other competitors introduce new products on their menus.

1:15:23 I'm I'm sure people are saying, Hey, just do a Cajun chicken version. Just do just roll it in Cajun spice, it's not for that or Offer, you know, Cajun fries like Five Guys does. I mean, I'm sure people said that to you all the time, and and how are you able to resist doing those things? Golly, if I could if I could have a dollar for every time someone said, Add ranch, add barbecue, add spicy, you know, everything, grilled everything else and You know, these companies keep adding and changing and different ideas, they lose their identity. They lose who they are in and You know, I like to say if you try to be all things to all people, you're nothing to none. You know, it's just it's it's y you you spread yourself then and so

1:16:01 Uh you know, it it one thing too that's that's sad in my industry, it's not Used to be founder driven. Yeah. you know, all the founders. It was you know, of their businesses. And there's very few now. Yeah. You know, and so when you're a founder, you know, and and this is a family business and you care about your crew, like you're it's a lot of integrity. And so many of these these these people in the rest these restaurant industry in general

1:16:25 Founders get bought up by private equity. Right. And then it becomes a business transaction and CEOs come and go and CFOs come and go and marketing comes and goes and everybody's got new ideas and new things and sales this quarter and this, you know, I mean and all those things. And it's not really built for longevity. It's built for Profit. Profits and five year turnarounds and selling and all that stuff is and so If the reason why I never gave in was I knew it was the right thing for us, you know, it's our one love. It makes us successful, and we're gonna stick to it. And it holds true. We have we're the we're the second highest average unit volume in all of Quick Circus. Wow. It's like I reps from like three and a half million dollars per restaurant. Yeah, or over uh four billion average unit volume. And and I guess to put that into context, I think number one is Chick-fil-A.

1:17:10 One number one is Chick-fil-A. And by comparison, McDonald's is like two and a half to three million dollars per location. Right, right. I know that you've got Uh something like

1:17:21 At the time of this recording, something like five hundred and sixty five Seventy locations, maybe more. Yeah, I think we're at six and thirteen. We actually just opened seven restaurants yesterday. Uh and growing quickly. Like in an average year, how many restaurants do you do you plan to open now? Yeah, we plan to open a hundred to a hundred and ten restaurants the next twelve months and uh then increase that number. And now when you open them people know what they are. Absolutely. They're lines. It's it's nice having that. You know, we've been a business now for twenty five years, so you have people that have actually been to Kane somewhere. You know, we're in like thirty three states, and they're just fanatical about it.

1:17:56 Yeah, well when you think about it, this journey, I mean I know you were so motivated and you were confident this was gonna work. But when you now see what you build. I mean, how much of of that do you attribute to to luck and how much to the work you put into it.

1:18:12 So one, you gotta have a great concept and then two, you gotta work your butt off to do it, but you need help along the way and you need luck. So you need people that help you. These angels come about and help you and a lot of things come along, that that's luck and you take advantage of it, right? I mean Naming the dog, right? That was luck. You know, the our our our our logo comes off a mural uncovered in the first location renovating it. That's the that was luck to see that. And these are rich things in Kane's History and lore. I mean Looking back at your story, I'm not surprised at your tenacity and you know.

1:18:43 All the things that you did. and your commitment and all the people said, Don't do this and and you were just committed to this. But on the other hand, it is quite amazing. I mean it is a Theory.

1:18:54 straightforward, simple concept. Chicken fingers. Fries. Toast coleslaw. billion dollar business is a quite an amazing

1:19:05 thing. I mean do you ever sort of step back and just think Wow, how did that happen? Uh yeah, pretty much every morning when I wake up, you know I I'm so blessed. that the restaurant was so hard to start. So when you have that, you don't take anything

1:19:21 For granted. Our projections this year we'll do about three billion dollars in sales, right? And opening another hundred hundred restaurants and these are all great things, but it still gives me that little bit in my gut That little scare feeling in your gut, that little feeling that keeps me, you know, waking up and and working late and working hard and doing this. So I'm always blown away by it. I mean I think the day

1:19:43 This doesn't cease to amaze me will be the day I'd have to get out of it, you know, and that day will never come. What's a great quote, When you think you've arrived, it's time to show you the door. Like I feel like we're just getting warmed up. That's Todd Graves, founder and CEO of Raising Kains. The Graves family still owns a majority of the company, and Todd's wife and kids are all involved in the business. And the family still has a pet yellow Labrador retriever.

1:20:12 The current dog is Raising Cain III. And every year from Mardi Grad, Cain III like her predecessor Cain II. serves as Grand Marshal of the Crew of Mutts Parade in Baton Rouge. I'm gonna give you

1:20:29 I'm gonna give you my secret ingredient for my fried chicken. I'm gonna tell you I've m I don't think I've ever told anybody. I'm gonna tell you right now. Okay, wait to hear it. My secret ingredient. For my fried chicken.

1:20:40 Ground Fenigreek. No kidding. So now that I've told you my secret ingredient, what what's in the what's in the cane sauce? I knew this was coming. Well, you know the old adage I would you know I could tell you, but then you know, then you know what happens, what I'd have to do. Fair enough. Only me and the dog actually know everything that goes into it. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show, and as always, it's free.

1:21:09 And if you're interested in insights from some of the world's greatest entrepreneurs, sign up for our newsletter at guyroz.com or on Substack. This episode was produced by Liz Metzger with music composed by Rautin Erablui. It was edited by Neva Grant with research help from Claire Murishima. Our production staff also includes Devin Schwartz, JC Howard, Carrie Thomson, John Isabella, Alex Chung, Chris Massini, Carla Esteves, Sam Paulson, and Catherine Seifer. I'm Guy Raz and you've been listening to how I built this.

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