Raising Cane's: Todd Graves (2022)

By his early 20s, Todd Graves knew exactly what he wanted to do—open a restaurant near Louisiana State University that would make four things better than anyone else: chicken fingers, crinkle-cut fries, Texas toast, and coleslaw. After he and his partner Craig Silvey got rejected from every bank in Baton Rouge, Todd set out to fund his dream by working two treacherous jobs; first at an oil refinery and then on an Alaskan fishing boat. With roughly $150,000, he remodeled an old bike shop and opened his first restaurant in 1996. As word spread, Todd began building more restaurants, fueling the expansion on a rickety system of loans, and dreaming of making Cane’s as ubiquitous as McDonald's. Over the years, he has retained ownership of the business and watched it grow to over 600 stores, with 3 billion dollars in sales projected this year. This episode was produced by Liz Metzger, with music by Ramtin Arablouei. Edited by Neva Grant, with research help from Claire Murashima. You can follow HIBT on You can follow HIBT on X https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. Sign up for Guy’s free newsletter at guyraz.com http://guyraz.com/. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

  Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned, money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back

• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

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• 3:45Guy Raz?

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• 4:27Guy Raz?

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• 5:15Guy Raz?

  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. We first ran this episode back in 2022, and since then, Raising Canes has expanded to more than 800 restaurants across the US. It is such a fun story, and I think you're gonna love it.

• 5:47Speaker 01

  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 $100,000. Yeah, and I thought they'd give it to you. Isn't this a great plan? Isn't this a great idea? And so, did you do that? Yeah, yeah, yeah. Look, we bought a couple of cheap suits and went to Office Depot and bought boxy briefcases with the brass combination locks. You remember those? Yep, yep. We went and we went and saw every bank in town. I had a briefcase, Craig had a briefcase, and we would put it on their desks, sitting across from them in our chairs, and we would open the brass combination lock like somebody was going to steal our chicken finger business plan.

• 6:36Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:48Guy Raz?

  I'm 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 and by going through hell and high water, almost literally, to raise the money.

• 7:08Guy Raz?

  When you have an idea for something interesting, say, a business, or a product, or an initiative inside of your workplace, 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 if the idea you're coming up with isn't totally original, well, then it's probably not worth pursuing.

• 7:40Guy Raz?

  Except that being different or original isn't necessarily a recipe for success. 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 1, Verse 9, "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. So in some ways, the right question to ask isn't, "How is it different?", but rather, "How is it better?".

• 8:25Guy Raz?

  Because that is the question Todd Graves could easily answer in 1996. His idea was not revolutionary. He wanted to sell fried chicken fingers. But his execution is what would make his restaurant, Raising Cane's, one of the most successful fast-food chains in the United States. On a per-restaurant basis, Raising Cane's 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: chicken fingers, crinkle-cut fries, Texas toast, and coleslaw. You can get a fountain drink, ketchup, and a container of Cane's special dipping sauce as well. That's it.

• 9:09Guy Raz?

  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 600. 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 introduced classic Louisiana Cajun spices

• 9:50Guy Raz?

  or even healthy options like salad, he stayed laser focused on his short, simple, and efficient menu. But going from one restaurant to 600 wasn't a seamless journey. In fact, getting the money to finance his first restaurant required two dangerous detours: to an oil refinery 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. Todd's dad was actually a former professional football player, too, a lineman for the New Orleans Saints back in the 1970s. And Todd

• 10:34Guy Raz?

  grew up with dreams of playing college football, just like his dad.

• 10:38Speaker 01

  I was 6'1", weighed almost 200 pounds in high school, playing 2A football, right? And so I was a quarterback and then the defensive end, you know, going both ways. And, you know, I didn't realize at the time, but that really made for me having a smooth childhood. You know, I was just really fortunate, you know, I was just one of the better kids, you know, or of the best kids, playing sports, which also, you know, at younger ages, you know, makes you more popular, right? And so 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.

• 11:15Guy Raz?

  Oh, you did theater?

• 11:16Speaker 01

  Yeah, yeah. I would say 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 kind of bridge those together. Then you had the artistic kids, and, you know, I would kind of bridge all those along. And I didn't really think that was my role, but later on in life, I kind of 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.

• 11:53Guy Raz?

  So you were, you were the high school quarterback and a pretty good athlete. I think, I mean Louisiana, I would say Louisiana, Texas, big football and Louisiana also baseball states. Did you ever, ever like have dreams of playing at the college level? Did you ever think, you know, maybe I can, I can play in college?

• 12:11Speaker 01

  Yeah, I, I did 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, you know, a big southeastern conference school. And so I wasn't that good. I actually got offered some smaller schools 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.

• 12:43Guy Raz?

  So you actually wound up going to the University of Georgia in Athens.

• 12:48Speaker 01

  Yeah.

• 12:49Guy Raz?

  And I, I read that you, you majored in telecommunications and, and I guess started working in a bunch of different restaurants around campus while you were there, right?

• 12:57Speaker 01

  I did, I did. I worked at a lot of different, different restaurants and bars. So everything from more quick service types of restaurants to like, you know, mom and pop grills and bars. Uh, 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.

• 13:16Guy Raz?

  Did you know how to cook when you were in college?

• 13:18Speaker 01

  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 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 of hours, but you know, you want that thing to stretch out 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.

• 13:53Guy Raz?

  You were doing rues for the gumbo?

• 13:55Speaker 01

  Absolutely. Rues for gumbo.

• 13:57Guy Raz?

  What's the color you're looking for in that roux?

• 14:01Speaker 01

  Dark, dark, dark, dark, dark roux. I have to tell you, now, most of the time, I cheat. And I use Savaros roux in a jar, which is almost as good.

• 14:10Guy Raz?

  Yeah, that's all right. No shame. No shame. You're a busy guy.

• 14:14Speaker 01

  Yeah, it's fun, too, because I cook with my kids today, especially my son. He loves it. It's the way we spend time together, like my mother and I spent time together. But all those Cajun dishes, the crawfish etouffee, even things just like, look, steak and potatoes. Like, I was a junior high kid, just grilling the steaks for my parents, making gin and tonics for them. You know what I mean? I don't know many other kids in 7th grade that are doing that.

• 14:33Guy Raz?

  Can you make me a gin and tonic, son? I love that. Where was your first restaurant job?

• 14:38Speaker 01

  The first restaurant job I had was actually I functioned as a kitchen steward for our fraternity. And that gave me great experience. I just signed up to do it, you know, my freshman year. And from there, 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, the food quality, and learning that way. And then the owner of the business that did this for a lot of fraternities, he taught me things, because I asked about food costs, you know, what is your food cost?

• 15:17Speaker 01

  And he had the real simple answers of, you know, it's a third of what you should sell something for. So, you know, if you're going to sell something for a dollar, your food cost should be 33 cents. And from there, I just worked it differently. 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 learning about food, you realize, you know, how hard of a business it is. And you also realize you have to love it. And, you know, I loved it.

• 15:47Guy Raz?

  Yeah.

• 15:47Speaker 01

  I loved, I loved the restaurant business. And it was like, I loved the teamwork. I loved the immediate gratification of cooking something and serving something to somebody, and them smiling, you know, and saying, and that was good.

• 16:02Guy Raz?

  So you are one of these, I mean, I worked in restaurants when I was in high school. And I liked it, too. You know, I worked at a pizzeria and... Even worked at a gas station, making the burgers and chopping the onions. And actually, I think, I think that's why I know how to cook today, because 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 you just, just connected with you.

• 16:28Speaker 01

  It's two things. One is my mind's always rolling. It's always thinking of ideas. It's always these things and it's therapeutic to me. If I'm on a fry line and cook, I can focus on fry the chicken, do the fries, deliver the box. So you're, it's immediate gratification. It's like some people, why they like to cut their grass, right?

• 16:49Guy Raz?

  Yep.

• 16:49Speaker 01

  You know, but then two, when you're slammed and busy, you're working with a team and everybody's high stress, but that teamwork and when you're just cranking together, you know, servers like, 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 the 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.

• 17:19Guy Raz?

  And you accomplished something.

• 17:21Speaker 01

  You accomplished something.

• 17:23Guy Raz?

  Was there a point in college where you thought, I think I want to do this. I think I want to, I want to start a restaurant or run a restaurant professionally, because you were studying telecommunications. It seems to me that you already in college were thinking, I think this is where, this is where I'm headed, restaurants.

• 17:40Speaker 01

  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, 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 what, how much 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, Boneless chicken was becoming incredibly popular. It was just really becoming popular.

• 18:22Speaker 01

  Like back in the eighties, people started saying that red meat was terrible for you. All these studies came out.

• 18:27Guy Raz?

  Right.

• 18:28Speaker 01

  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 with strips or fingers or nuggets. And you were seeing them on menus from everywhere to like national chains like Chili's would have it on the menu with a great dipping sauce. Our mom and pops 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. Zaxby's Chicken Fingers and Buffalo Wings and you know, different concepts like that were opening and doing well with it. And so I thought that was a really good concept to start.

• 19:09Speaker 01

  So I, I, I called my old buddy Craig Sylvie, a dear friend still today and told him what I wanted to do in the restaurants. And I talked to him and I said, hey, this sounds pretty good. You know, let's, uh, let's go and do this. And I said, are you serious? He said, yeah.

• 19:24Guy Raz?

  And Craig, by the way, Craig was at LSU?

• 19:26Speaker 01

  Craig was at LSU. Yeah.

• 19:28Guy Raz?

  And it was a high school friend of yours?

• 19:30Speaker 01

  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 got that kind of guy that always has your back. He's one of those, one of those kind of friends.

• 19:43Guy Raz?

  So when you, when you reach out to Craig with your idea, what, what was the idea you told him you had? What did you want to do?

• 19:50Speaker 01

  Yeah, 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. And I wanted everybody to say, man, that's the coolest restaurant. That's the greatest place.

• 20:05Guy Raz?

  That's where we eat, that's our hangout, that's where we get our chicken fingers.

• 20:08Speaker 01

  Yeah.

• 20:09Guy Raz?

  And, and you knew that it was going to be. Chicken fingers, fries and drinks.

• 20:15Speaker 01

  Absolutely, 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 60s, you know, it 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.

• 20:32Guy Raz?

  Right.

• 20:33Speaker 01

  And I wanted to make it better and I wanted to make, you know, not only the menu better, but the operations better and, and have a little more character.

• 20:42Guy Raz?

  But I, I'm curious because you're 22 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 way to think about a business, but, but usually that doesn't come until many years later of just trying and failing and trying and failing. But 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 led you to that belief and that view?

• 21:21Speaker 01

  You know, I think a lot of 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 also too is, you know, I had worked at different type of restaurants.

• 21:37Guy Raz?

  Yeah.

• 21:38Speaker 01

  Right? You know, restaurants that served large menu, Mexican restaurants that had so many different menu items and all that. That intimidated me, doing all those different items and doing it well. It is, it is very, very, very hard, you know?

• 21:52Guy Raz?

  Yeah.

• 21:52Speaker 01

  Because restaurant business is 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.

• 22:03Guy Raz?

  Yeah.

• 22:04Speaker 01

  At these different restaurants. So that was less intimidating to me, saying I can, I can execute on this.

• 22:10Guy Raz?

  All right. So you reach out to Craig with this idea and he says, hey, that seems pretty good. He's still at LSU, right? He's, and, and, and about to graduate too, same time you're about to graduate?

• 22:22Speaker 01

  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. 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 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.

• 22:55Guy Raz?

  And just to be clear, you had just graduated from University of Georgia, so you're back in your hometown of Baton Rouge. And what were you actually doing? Were you working in town?

• 23:06Speaker 01

  I bartended at night. And while Craig was taking these business planning classes, I was going to use other resources in Baton Rouge area. So 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 bartend. Look, I had to live, man. I had to pay my rent and I had to eat and I had to drink a few beers.

• 23:37Guy Raz?

  So you were going to these like free, you know, programs that exist in cities all over the country, retired executives, mentors, and so on. And you were saying, hey, I have this idea for a chicken restaurant.

• 23:47Speaker 01

  Yeah, absolutely. You know, I regretted not taking a business planning class, but I was doing a crash course, you know, and used every resource I could. You know, not only were these professional organizations I went to, I went to every smart business person I knew that started their own business in Baton Rouge. And they were always willing to sit down with me and give me their advice and what I should do.

• 24:08Guy Raz?

  I'm curious, when you were, because that's the most, one of the most exciting times of starting a business, when the idea's 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 you get enough people saying, ah, it's not going to work, or you know, you may not want to go into that industry. And oftentimes, that quashes the dream and people move on. I have to imagine that you went to some of these business executives and they said, Todd, don't get into the food industry. It's a death trap. You're not going to survive it.

• 24:40Speaker 01

  Yeah, you know, unfortunately...

• 24:43Speaker 01

  When you have an idea, you know, good or bad, but that you're passionate about, most people are negative towards that good idea, you know? And it's not, and it's not because they're ill-intentioned people. It's just-

• 24:56Guy Raz?

  They want to help you, protect you.

• 24:57Speaker 01

  They want to protect you. 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 started their own businesses. 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.

• 25:21Guy Raz?

  Who were all the other people?

• 25:23Speaker 01

  Well, I mean, just, just people I knew in Baton Rouge, right? And so friends of my parents, you know, they would say, hey, what are you doing? I'm like, oh, man, you know, Craig and I are going to open this chicken finger restaurant. And imagine hearing that and da, da, da. They're like, you know, common responsibility, didn't you just graduate? Don't you have a, don't you have a degree? And I'm like, yeah. They're like, well, why don't you just go-

• 25:44Guy Raz?

  Get a job.

• 25:45Speaker 01

  Get yourself a real job.

• 25:46Guy Raz?

  Yeah.

• 25:46Speaker 01

  And then if you still want to do this 10 years later, then you'll have enough money. Then you can start your little chicken finger restaurant.

• 25:52Guy Raz?

  Very sound advice, by the way. Very sound advice.

• 25:54Speaker 01

  Yeah. But with every you shouldn't do that, you know, I used as fuel, you know? You tell an entrepreneur they can't do it and they're going to go and work harder to prove to you that they can.

• 26:06Guy Raz?

  But if you're coming to me and you're 22 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, all right, 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?

• 26:24Speaker 01

  Well, I mean, I did get that.

• 26:25Guy Raz?

  Yeah.

• 26:26Speaker 01

  I got that a lot. You know, you don't have management experience. You didn't learn a lot of these things. I said, well, I was paying attention, you know? And also is my kitchen steward at the fraternity house, you know? Good, I know how funny that is sounding 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.

• 26:44Guy Raz?

  I don't have time.

• 26:46Speaker 01

  I'm going to figure this out. I want to do this now. And they would go, okay, okay, I got you. I got you. 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 banks because you need money to open. And that's the hardest part. And they were right.

• 27:00Guy Raz?

  So Craig's in this class and you say to him, let's do this as our business plan. Cause there's a professional business school professor who can evaluate it. And by the way, I've seen an image of this business plan online. And there's some, there's some names on it 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?

• 27:22Speaker 01

  Yeah, yeah, these guys were brilliant. It was three of them. It was Casper.

• 27:26Guy Raz?

  Casper, Odquist, Frederick Norden, and Mans Holmgren. I thought it was, I thought they were made up names. No, these are real. Were they like exchange students?

• 27:35Speaker 01

  Yeah, they were. So they were like MBA level Ford Exchange students or at LSU. All right. Happened to get paired with Craig for this project.

• 27:44Guy Raz?

  But I'm just wondering, was, was Casper or Frederick or Mans, were they like, wait, who's this guy pointing at you? Like, how is he, how is he in the picture? He's not even in the class.

• 27:55Speaker 01

  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 and I knew food. For example, I knew exactly what an apron would cost per shift for each crew member, right? And I knew that because I met with a sales rep. And so, nobody had that level of detail in their business plan because it's more about ideas and what they want to do. We were, we were going to start this thing, man. So I needed to know every detail for the business. You know, so I basically took my time and during the days when they're in classes, I met with, I met with sales reps. I called businesses, companies, and got an idea of everything. So our business plan was really spot on.

• 28:37Speaker 01

  Plus, I'm a little mildly obsessive compulsive, you know, so the details were just really over the top.

• 28:42Guy Raz?

  So you were, I mean, you were like literally going to like chicken suppliers and, and sort of working out those numbers? Like sourcing the potatoes or would you, were you going to use like flash frozen fry? Like, did you, did you figure all the details out around the food?

• 28:58Speaker 01

  Yeah, so around, well, 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 a 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 Canes has just amazing bread, right? But like other concepts out of Texas toast, they use sliced bread, right? And so it's 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, griddle. It's basically a fat piece of white bread. Right, 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 sliced bread?

• 29:41Speaker 01

  Well, like, well, we can put dough balls together and put them together, small dough balls. It'll bake together as a loaf, but it's pull apart bread versus sliced, which means it stays more moist and it's more dense, right? That's how you work with your vendors. 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. All right, so you, you build a business plan. And by the way, how many pages was it? Oh, man, I can't even remember. Forty, 20? Pretty thick, oh no, probably 100. We had all kinds of different, you know, financial scenarios, researching wages and different things, you know? All the information in the industry I could find about why we would be successful, right?

• 30:24Speaker 01

  You know, articles like I can remember, you know, we're becoming a nation of chicken eaters and finding articles on boneless chicken popularity. And, you know, going to places and stealing menus, you know? So I could go back and copy them on the thing to show, look, Chili's is serving this, you know? And things like that. I knew it would be very hard to talk bankers into a concept that was very foreign to South Louisiana, right? You know? Yeah. Very foreign. What was the name of the restaurant in the plan? Well, we started off with a name called Follies Chicken Fingers. Follies. All right, so Follies Chicken Fingers, it's a great name. Yeah, Craig, Craig worked construction one summer. He had a guy he worked with 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 restaurant.

• 31:09Speaker 01

  What does Folly mean? 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?

• 31:17Guy Raz?

  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 they submit it to the professor. And what happens?

• 31:32Speaker 01

  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, it's good. And I'm like, no, no, no, no. And we're rehearsing it and, um, you know, we 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. I literally waited and, uh, 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. They're like, oh, you know, I don't think he was that crazy about the concept. And, uh, well, I was like, what do you mean? You know, what, what on earth?

• 32:14Speaker 01

  And he said, well, you know, they said, good, good business plan, you know, incredible detail. But a 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. Uh, that was for one, 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, they're, they're going a different way than you're going. You want to do just one, basically one product, one meal.

• 32:54Guy Raz?

  Yeah.

• 32:55Speaker 01

  And do just that. And look where McDonald's is going.

• 32:58Guy Raz?

  Salads and apple slices.

• 33:01Speaker 01

  Yeah. I mean, look, it was, it was two things. It was variety. Is what they were doing. They were saying variety, get as much variety as you can on a 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 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.

• 33:31Guy Raz?

  It's not bad, not bad.

• 33:32Speaker 01

  It was devastating to me. I mean, as far as like, I was like, the worst grade in the class. We put all this into it. This is gonna work. You know, you're just like, you know, you're emotional and 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, because the plan was so comprehensive. He just had to ding it because the concept and, you know, to be honest with you, you know, like we talked about faith, you know, it's like questioning that belief is, is good. Because I was like, I was like, you know, he brings up these good points, but I'm gonna buck that trend. We're gonna make it work. That's why it's going to work.

• 34:08Guy Raz?

  When we come back in just a moment, how Todd sets out to fund his B minus business plan 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. Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in. So the work is production ready from day one. And you can get it done with help from Framer's AI agents. Framer is the

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• 35:16Guy Raz?

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• 36:43Guy Raz?

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• 37:28Guy Raz?

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• 38:01Guy Raz?

  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. And after carefully going over that critique, they decide, basically, to ignore it.

• 38:25Speaker 01

  I didn't want to lose focus, right? I could have easily said, hey, let's add a chicken finger salad. 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 where someplace is great at salad. You know, like, and I do. You know, I'll eat my food one day and another.

• 38:46Guy Raz?

  I agree. I agree.

• 38:47Speaker 01

  You know, and you know, hearing that from a smart professor, it made me think for a second, and 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 going to order that anyway. And it's just going to complicate our system. Meaning lettuce is produce. Produce goes bad quickly.

• 39:05Guy Raz?

  Yeah.

• 39:05Speaker 01

  That's going to complicate what we're trying to do. And it's not going to equate to sales, and I knew this.

• 39:10Guy Raz?

  So now, you were determined to make this happen. You've got a business plan, B minus business plan, but you got a plan. There's a slight obstacle that you've got to overcome, which is money. Money to start a restaurant. So where did you go? What did you, what did you do?

• 39:27Speaker 01

  Well, we knew the next step was to take that business plan and go see the banks.

• 39:32Guy Raz?

  Yeah.

• 39:32Speaker 01

  You know, we needed, we needed the money. We didn't have any.

• 39:34Guy Raz?

  And you guys didn't have any, any family money or anything?

• 39:37Speaker 01

  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 with the belief that, you know, 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.

• 39:56Guy Raz?

  Here's my plan. I need a hundred thousand dollars.

• 40:00Speaker 01

  Yeah, and I thought they'd give it to you. Isn't this a great plan? Isn't this a great idea? Oh, goodness gracious.

• 40:05Guy Raz?

  And did you do that?

• 40:07Speaker 01

  Yeah, yeah, yeah. Look, 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 fake leather boxy briefcases with the brass combination lock. You remember those?

• 40:28Guy Raz?

  Yep.

• 40:29Speaker 01

  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 we would put it on their desk, sitting across from them in our chairs, and we would open the brass combination lock like somebody was going to steal our chicken finger business plan. And look, they were all nice enough to us, you know, they were, they were nice, went through it. 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 90% failure rate. And, you know, you know, franchises are the things

• 41:12Speaker 01

  that work because they're proven systems. You both have college degrees. Why don't you go work in the industry 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 want to start your own, uh, your own business?

• 41:30Guy Raz?

  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, because you had the idea for the sauce and the chicken and the fries are another thing, that's critical. But the, I mean, were you doing that?

• 41:47Speaker 01

  No, not really. My focus was getting the money. Get the money and at that point, work with the vendors to tweak. The recipes 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. I thought it'd be simple. It's like, well, there's six grades of poultry seasoning. And one costs, you know, a hundred bucks a box and one costs 500 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.

• 42:18Guy Raz?

  So the idea was you would have this kind of recipe that you would come up with, or you would have a flavor that you liked. The third-party vendor could make it and then deliver it frozen or something like that. And then you would fry it on-site.

• 42:30Speaker 01

  No, no, no, no, no. I knew I wanted to do everything that I could from scratch in the restaurant. Yeah, 100%, you know, 100%. 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 AAA versus a grade A. Because I grew up cooking, but I didn't know the fundamentals outside of Cajun cooking, you know, as far as other restaurants.

• 42:59Guy Raz?

  But there was no point 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.

• 43:07Speaker 01

  So a friend reminded me, you know, a couple of years ago, you remember when you were doing different sauces that came up, cane sauce? And you had us all try the cane sauce. He goes, yeah, you had a bunch of us in there and we were trying the different ways 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 Cajun thing.

• 43:35Guy Raz?

  Cajun sauce was gonna have cayenne pepper for sure, right?

• 43:38Speaker 01

  Exactly. We would have cayenne pepper in it and everybody was like, you're gonna put some cayenne in that? And I'm like, no, no, no. Black pepper is, and that's no secret because you can see the black pepper fakes in there. And they said, you know, black pepper's gonna be that base on that? I don't want this to be Cajun. This is a chicken finger restaurant. And they're like, well, man, but it's Cajun. I said, well, look, when you order your pepperoni pizza, it doesn't come with, you know, with cayenne pepper and, you know, and doing that, does it? And they're like, good point.

• 44:06Guy Raz?

  Okay, so the banks are saying, you're not gonna get the loan from the banks. You don't have access to family money. So you have to come up with some money to make this happen. How much did you think you needed to raise?

• 44:19Speaker 01

  Ballpark was $100, $150,000 was what in my mind I thought we could start it for. And that's without knowing the location.

• 44:27Guy Raz?

  Right.

• 44:27Speaker 01

  Craig still has one semester left in college. 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, you know, I got to meet a guy, I didn't carry Travis, who was a foreman for Louisiana Cruz doing turnaround shift work in refineries. And he said, well, that's great. That's great. You go for your dream. Are you willing to do some hard work? Yes, sir. You know, are you willing to work 90 to 100 hour weeks? Absolutely. Seven days a week? Absolutely. Okay.

• 45:13Speaker 01

  You seem excited. You seem like a hard worker. We can teach you that business. It does. It takes a certain person that wants to work that hard in those conditions in their refinery. And luck would have it, I got work doing turnaround ship work. The title was boiler maker in refineries in Los Angeles.

• 45:29Guy Raz?

  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 it doesn't mean you know anything about oil. What did the job actually mean? What did you do?

• 45:40Speaker 01

  Yeah, so, you know, I had to learn all of it. I had no idea what being a boiler maker was. All I knew is you were going to make 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. 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 many years. And so there'll be to be safety upgrades, technology upgrades, just replacing.

• 46:07Speaker 01

  And doing preventative maintenance. So they bring in boiler makers, which I love that term, boiler makers. I thought that was a cool, cool, cool term. 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 through metal like butter, you know, and we cut these things out in pieces and then bring them out the tower.

• 46:31Guy Raz?

  It's hot, right?

• 46:32Speaker 01

  Hot as all get out because you're wearing these complete jumpsuits, right? You've got your hard hat on, you've got your goggles on. And if you were in there, like I picture if you lit the whole thing on fire and you're walking through, that's kind of what hell would look like. It's just, it's a pretty hard work environment, but at 90 hours a week, you get quite a bit of overtime.

• 46:51Guy Raz?

  This is 1995. How long did you do work as a boiler maker?

• 46:57Speaker 01

  Yeah, it was probably about a four month period of time.

• 47:01Guy Raz?

  And presumably while you were working in Southern California, this is when you first encountered In-N-Out Burger.

• 47:07Speaker 01

  Absolutely. You know, when I went to In-N-Out Burger for the first time, I'd never even heard of In-N-Out Burger because you know, it's a west coast thing.

• 47:13Guy Raz?

  Yeah.

• 47:14Speaker 01

  I'm a Louisiana boy. And when I went out, people talked about, you know, man, you gotta go by In-N-Out Burger. Great. What do they have? Ah, burgers. Great. What else? Fries. Is that all? No, they got shakes. And I'm like, oh my goodness. That's, that's what I'm trying to do at Kane's.

• 47:29Guy Raz?

  Yeah.

• 47:30Speaker 01

  And man, and I saw the lines, the lines and tasted that burger and God, it was amazing. And they could serve it quickly. And then learn the company history. Since 1948, 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 1948, In-N-Out Burger's been doing the same thing and doing it extremely well.

• 47:53Guy Raz?

  Yeah.

• 47:54Speaker 01

  And it gave me just a lot more confidence on

• 47:58Guy Raz?

  On your concept.

• 47:59Speaker 01

  Knowing that my concept would work. Yeah. And I wish I had as an example. I wish I could have said, hey, look at In-N-Out Burger. It's 1948 and they're still doing great.

• 48:06Guy Raz?

  So you, you spent about four or five months working in refineries. And do you remember how much money you, you earned over that five month period?

• 48:12Speaker 01

  You know, I want to say going out, working in the refineries as a boiler maker, I think I made around 25, 30 grand is what I made, which is big money for a 23 year old kid.

• 48:26Guy Raz?

  And so I guess after four or five months of doing this, From what I understand, there was a fellow bowler maker 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?

• 48:39Speaker 01

  Yeah, you know, everybody, bowler makers give each other nicknames. It's actually, there's great camaraderie among the group. This was the first group of people that believed in my dream. They were encouraging.

• 48:51Guy Raz?

  You would talk about it with everybody?

• 48:52Speaker 01

  Yeah, everybody, they all knew, all these bowler makers working in this refinery knew I was out working these jobs with them because I had this chicken finger dream. And they were all encouraging. And, you know, 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? They 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. But he's like, look, this is real dangerous work. It's a commercial fishing for sockeye salmon, gill netting in Knack Neck, Alaska.

• 49:32Speaker 01

  So about the point when I was wrapping up my bowler making career, Craig was graduating from college. And I called him on the road. I said, hey, man, 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 in Alaska. And he says, we can make a bunch of money real quick, but it's going to 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 in a little plane. We hitchhiked to Knack Neck, Alaska. And we went to Tent City where they had a, you know, little area where you could, it's on the tundra where you could put your tent.

• 50:15Speaker 01

  And then proceeded to go and talk to every boat captain in the whole fishery to get a job as a greenhorn, which is a rookie, which is very hard to do.

• 50:25Guy Raz?

  Yeah. But you guys both do wind up getting jobs to work on fishing boats as summer. I mean, I should mention, this is super dangerous work, right? I mean, I actually looked this up because that summer that you were actually on a fishing boat in Alaska, there were six deaths, six deaths in, you know, among salmon fishermen that summer of 1995. And it's like nonstop work, right? It's like you're all, you are fishing all the time.

• 50:51Speaker 01

  Yeah, you know, this, it's, the salmon fishing trade at this point, too, was just incredibly lucrative. And what we were fishing for was sockeye salmon.

• 51:00Guy Raz?

  Yeah.

• 51:01Speaker 01

  Which the Japanese bought, I want to say like 95% of it because of the quality of the meat. So stakes are high and it's very competitive. So what captains, motivated captains would do is they play chicken. And I don't know if it's still okay to do that, but man, it was back then. And man.

• 51:17Guy Raz?

  It would hit other boats?

• 51:18Speaker 01

  I saw other boats ram other boats. You saw their boats sink. Actually, the boat Craig was on, the captain rammed a boat and it did sink.

• 51:25Guy Raz?

  Wow.

• 51:26Speaker 01

  And it's, it's mostly dangerous because you're so tired.

• 51:31Guy Raz?

  Yeah.

• 51:32Speaker 01

  You're so tired, so you get, you get careless, right? So someone gets thrown out with a net or someone doesn't get their footing when they're in seas and they break their arm or, you know, we're getting these reports, if 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 a boat. I mean, just crazy stuff.

• 51:54Guy Raz?

  That's totally nuts, but clearly you, you had a single track mind here. You knew that this is what you're gonna do. That season ends and you've got around, I guess around $50,000, right? That you've saved.

• 52:06Speaker 01

  Yeah, yeah.

• 52:07Guy Raz?

  A lot of money. And you go back to Baton Rouge and presumably was this, it's still not enough to launch the business though, right?

• 52:16Speaker 01

  No, we didn't have enough and, and we knew, we knew we wouldn't have enough coming back, but we knew it could be a great start. And 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 L.A. Shoe, 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, rest his soul. I mean, what a great guy. And he bought into our, more than anything, he bought into our passion. 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

• 52:59Speaker 01

  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.

• 53:06Guy Raz?

  Right.

• 53:06Speaker 01

  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 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, and fish or women, women out, there was bears and eagles and it was amazing. And actually Craig called me and said, hey, 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 him I'm making money. He goes, no, you're not making the same money you did when we were commercial fishing. So he said, get on back and open this thing up.

• 53:39Guy Raz?

  Right.

• 53:39Speaker 01

  So, and I got on a plane that day and flew home.

• 53:41Guy Raz?

  Wow. So this, this location became, becomes available. It's, it's, I guess, presumably the fall of 95, right? Or early, early winter, maybe when you're back in Baton Rouge.

• 53:52Speaker 01

  Absolutely. And I knew this site, we had it, but we didn't have the money to get it yet. 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.

• 54:16Guy Raz?

  Yeah.

• 54:16Speaker 01

  Craig went Commercial Fishing Alaska. Like I think maybe you'll make this thing work. Two of my investors were Buller Makers that I had worked with, right? They, they, at least it's like $10,000 investors, $5,000 investors. One was Mr. Red Reynolds, our Realtor. Another one was a high school friend that actually worked Buller Making with me out there. He said, he said, you're going to make this thing work. And then my bookie, of all things, my college bookie, he paid cash.

• 54:44Guy Raz?

  So did they get equity?

• 54:45Speaker 01

  Yeah, absolutely. The preferred shareholders got equity into that first location. Actually, as we continue to grow, they wanted to be along for the ride. So we, so we carried them over in a, in a capacity and still have most of the original shareholders, a lot of them got out. Different points, you know, of growth, but we still have, uh, still have a handful of the original investors.

• 55:05Guy Raz?

  Wow.

• 55:05Speaker 01

  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 $90,000, we'll give you a $50,000 loan. And you remember that number I had about 150 in my head and you know, I'd spent a bunch of the money to live on. I was like, bingo.

• 55:23Guy Raz?

  Wow. All right. So you, uh, you raised the money. You get the SBA loan. You've got the location and I think it was, it was, it'd been like a former bike shop. Is that, is that right?

• 55:34Speaker 01

  Yeah. This location was ideal and cheap rent. I think it was like 1,500 bucks a month. And I ended up getting like after options, like 50 years on the deal. It even had a billboard on the location. It was just ideal.

• 55:47Guy Raz?

  Wow.

• 55:47Speaker 01

  And, and, but it was a good deal for the landlords because 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.

• 55:55Guy Raz?

  So you got a 50 year lease.

• 55:56Speaker 01

  With, with options. Yeah, absolutely.

• 55:58Guy Raz?

  All right. So you get a bike shop. How do you convert that into a chicken finger restaurant? We got our fryers. You've got to have a counter. You've got to have a drive through window. You've got to have not that much stuff, but you still need a bunch of stuff. You've 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 through?

• 56:18Speaker 01

  Barely, barely, barely, barely. But this was great. This is the best part about it because, you know, I didn't know anything about construction, but I could learn, right? And I could do it cheap. I think we originally got a contractor and got a bid and it was like over $200,000. 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 boiler maker. We know about regular 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 jackhammered it off the bag, concrete. We learned how to do plumbing. We learned how to help out electricians, you know, we could save, save money and get actually

• 57:03Speaker 01

  a real electrician to do things, but we could be the helper putting the pipes in, doing this stuff.

• 57:09Guy Raz?

  So you're like completely gutting and opening, trying to open this restaurant. And by the way, the name was going, still at this moment, was going to be Follies Chicken Restaurant?

• 57:17Speaker 01

  Well, so we kind of got off Follies and we kicked around the idea of calling it Sock Eyes Chicken Fingers because of the salmon that we fished for in Alaska. Luckily, we were telling a group of friends and one of them told us, hey, we think that's a terrible name.

• 57:34Guy Raz?

  Sock Eyes Chicken Fingers?

• 57:36Speaker 01

  Yeah, they're like, it makes no sense.

• 57:37Guy Raz?

  I'm thinking salmon, salmon chicken fingers?

• 57:39Speaker 01

  Exactly, right?

• 57:40Guy Raz?

  I don't know about that.

• 57:41Speaker 01

  I'm like, well, look, we gotta get some signs made for this place. And so, you know, that's the best crack that I got. You got a better idea? And I had to yell aloud then, it was Raising Cain the First.

• 57:51Guy Raz?

  Your dog was called Raising Cain the First?

• 57:53Speaker 01

  Yeah, well, he was just Raising Cain. He was, he was the first.

• 57:56Guy Raz?

  Was he named after the Brian De Palma film, Raising Cain? The horror film?

• 58:02Speaker 01

  No, my sister named him.

• 58:04Guy Raz?

  See, I didn't know this until I did research, but raising Cain is an expression. It means like to cause trouble.

• 58:09Speaker 01

  Yeah, you know, raising a little hell, having a little fun. And so she thought that was a good name and the name stuck. And, you know, anyway, so when we were doing construction, I would have Cain 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, 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.

• 58:30Guy Raz?

  All right, 1996, you finished the renovations. I mean, I'm just curious, you, you were going to make everything in-house. You were gonna 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?

• 58:44Speaker 01

  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.

• 58:55Guy Raz?

  Yep, under the breast, you can cut it off, right?

• 58:57Speaker 01

  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 because people will pay for quality. Now, I didn't price my menu accordingly, and I didn't make much money until 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.

• 59:38Guy Raz?

  And by the way, I think right around this time, you also started to date the woman who would become your wife, Gwen. And what I love about the story is that, from what I read, she was actually a McDonald's franchisee. Is that right?

• 59:55Speaker 01

  Yeah, she sure was. You know, I met Gwen, although we went to high school together. We didn't really know each other, but I met Gwen and I told her the story about, you know, 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 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, and I go with the sure thing. McDonald's franchisee. She goes, "You're crazy. You're totally different than me. You're an entrepreneur with this crazy idea, but good luck to you." And so I asked her out that night. But I said, "I don't know when I can actually take you out on a date."

• 1:00:33Guy Raz?

  Because you're busy. You're working all the time.

• 1:00:35Speaker 01

  Exactly. And so, anyway, I eventually was able to take her out one night. And we really hit it off. And it was fun, because I tell you this, because like, we got to talk about things like, how do you salt your fries? How do you motivate your crew members? And we also, she understood the business and appreciated how hard it was. And 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, because I closed down for late night. There'd be weeks we wouldn't see each other. But yeah, she eventually opened her franchise in Brewley, Louisiana, across the river here in Baton Rouge, and was a really successful franchisee for McDonald's.

• 1:01:15Guy Raz?

  All right, so you got this restaurant. You've got the name. You've got all the things in place. It's 1996. You built it out. You're ready to open. Do you remember what was the date that you opened?

• 1:01:27Speaker 01

  Yeah, August 28, 1996.

• 1:01:29Guy Raz?

  All right, so hot day in a hot summer, in a hot, sticky, humid Baton Rouge, Louisiana.

• 1:01:37Speaker 01

  Cut it with a knife.

• 1:01:38Guy Raz?

  And you're serving hot chicken fingers and hot french fries with cold drinks. And you open the door, and I'm sure friends and family know. And was it crazy? Was it a mad rush?

• 1:01:49Speaker 01

  No, actually quite the opposite because we had all our friends and family come, you know, the days before opening because we needed to practice, right? We needed to practice, come in and do tweaking final recipes. Okay, try this sauce, dip your chicken fingers in this sauce, you know, that sort of thing. And so they've already tried it. They're actually, they've had their chicken finger fill for a while. And I couldn't tell, you know, the LSU community when we're going to open because Yeah. I didn't know when we were going to get the registers programmed. 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, you know, when will we get open? And so finally sometime at night, it might've been 10 o'clock, whatever, it was like, we opened. You opened at 10 at night? Yeah, yeah, yeah, yeah. You just, one day, you were just like, let's open.

• 1:02:34Speaker 01

  Because we finally got the registers working. No flyers, no like advertisements, nothing. No like, hey, grand opening. No ribbon cutting ceremony. Nothing. And you know how we got people? Nothing. I walked out front 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 kind of trickling in. But when the bar crowd got done at 2 o'clock. Oh, yeah. Then people started coming. They're hungry. Yeah, they're hungry. So you had to be open late because they want, they want fried chicken. Yeah, so they started coming and, you know, mostly dine-in because there's people walking from bars and they wanted to continue their night, but a couple of people in drive-through.

• 1:03:17Speaker 01

  And then word started spreading and then we started picking up. And I couldn't get at, physically get out of the restaurant because I had to be frying chicken, you know, and we were open every night. You were the guy frying chicken and Craig was at the register? Uh, yeah, and vice versa. We would just kind of, you know, work wherever we worked and we were open from 10:30 in the morning until 3:30 at night, you know, seven days a week. And so Wow. Uh, we had hired only a, you know, about a dozen crew members. We were 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. Actually got an apartment right behind the original Canes upstairs. 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

• 1:03:59Speaker 01

  Close the restaurant at 3:30 and you cleaned everything up, you'd be about 5:30 and they need to get there back about 8:30 in the morning to open up again.

• 1:04:06Guy Raz?

  Wow.

• 1:04:07Speaker 01

  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 about, about who we were and what we were trying to do.

• 1:04:18Guy Raz?

  All right, you achieved your dream. You, you got your restaurant. You got your college hangout, late night, post-partying restaurant. This was your dream. You're like 24, you've achieved it. 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?

• 1:04:45Speaker 01

  You know, seeing the popularity with the students didn't surprise me. I knew they'd love the concept. I knew they'd love it. I was excited and, and actually surprised on how quickly that first semester we were open of our volumes. You know, we really did well. I mean, look, our first month, we made 30 bucks.

• 1:05:07Guy Raz?

  In profit.

• 1:05:07Speaker 01

  30 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, 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 about that second semester.

• 1:05:49Speaker 01

  It is now 1997, early in that year, we had been open three, four months, and then I started thinking about growth.

• 1:05:56Guy Raz?

  Now, here's a question I have about the quick-service restaurant business. From what I understand, if you open up one location, so-called fast food restaurant, you know, mom and 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?

• 1:06:21Speaker 01

  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, look, you can have a whole family work in a restaurant, and I know a lot of great family restaurants that do that. So you lower your labor cost and everybody kind of 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, you know, you're ordering more products, so your prices go down, your margins get better. It's a really tight margin business.

• 1:06:53Guy Raz?

  All right. So you decide to start a second location. And how were you able to do that? 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 open the next location?

• 1:07:05Speaker 01

  Well, you know, I knew I wanted to design a building and do it. And so I went back to those original SBA lenders that lent us that $50,000. And I told them, hey, I want to do another location on the other side of campus. The numbers were good and 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 from ground up and open up just 18 months, just 18 months after we opened the first location.

• 1:07:36Guy Raz?

  Wow.

• 1:07:37Speaker 01

  Yeah. I mean, you can imagine, just in short order, I mean, I opened the first restaurant when I was 24 years old and now here I am out opening it up before I turned 26 years old.

• 1:07:47Guy Raz?

  Wow.

• 1:07:48Speaker 01

  And, look, brand spanking new equipment and, you know, brand spanking new furniture and nice landscaping and everything. I mean, you talk about, you know, feel like the Taj Mahal to me.

• 1:07:57Guy Raz?

  Well, here's the 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 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.

• 1:08:17Speaker 01

  Man, it's so true. There has never been a harder growth period at Raising Canes over the past 25 years.

• 1:08:25Guy Raz?

  Than going from one to two?

• 1:08:27Speaker 01

  Going from one to two. Never been a hard growth period at Raising Canes of going from one to two.

• 1:08:30Guy Raz?

  What was so hard about it?

• 1:08:31Speaker 01

  Well, you know, you get excited about it and you're like, wow, we're going to grow. And 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 were like, holy cow. Now I've got people and I've got new managers. They're not trained well enough. Then all of a sudden, I have double, double the workload. And when I opened that second restaurant, man, it was really busy. You know, it got frantic. It got really frantic because my manager would quit. That means, wait a minute, I don't really have any more time in my day. But I have to cover all those shifts until we can, you know, hire a new manager or train a new manager. And I want to say I learned my lesson then,

• 1:09:14Speaker 01

  but 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.

• 1:09:22Guy Raz?

  Yeah.

• 1:09:22Speaker 01

  You know, it's not like their problems double. It like, it multiplies, you know, exponentially.

• 1:09:30Guy Raz?

  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.

• 1:09:58Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 18 months after the first Raising Canes 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.

• 1:10:14Speaker 01

  We were very busy at the second restaurant and the first restaurant was busy. So sales were there. Profitability was there. It was just in the understaffing and with people quitting and not showing up, I would burn out more crew members who would quit and it was this cycle of what was going on. And that's when Craig came to me and said, hey, man, whenever you can, I want you to buy me out of the business, which was, you know, it hit me as a shock. And I'm like, Craig.

• 1:10:45Guy Raz?

  What are you doing?

• 1:10:46Speaker 01

  Yeah, this is working. Like, we worked so hard. I mean, you fished Alaska for this. 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 know that and I'm very proud of that. But he says, the restaurant business isn't my dream.

• 1:11:02Guy Raz?

  He was burned out.

• 1:11:03Speaker 01

  It's not my deal. He's burned out. And he says, look, it's not what makes me happy. He said, I love the starting of the business 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 Wall Street Journal. He goes, you'll go home and work on better ways to train crew members or better ways to do the schedule. And he says, this is what you love. And Craig's just one of those people that doesn't measure his success by the thickness of his wallet. You know what I mean? He's like, I want to go do something else. And he stayed with me because he said, I know I'm going to be here a while because we're so understaffed and we got to 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 years later to do,

• 1:11:47Speaker 01

  to help us be like CFO and technology and all kinds of other parts of the business he liked.

• 1:11:52Guy Raz?

  1999, about two and a half years in, he steps up. He steps away. You buy him out. And you're on your own without your partner and friend to run this thing. I think at that point, you had at least two locations and were looking to open a few more in and around Baton Rouge.

• 1:12:13Speaker 01

  When Craig left the business, I went through a period, and I don't know if it was depression, or if it's a fog, 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. And this might have lasted a couple of months. And it was like a fog. And I'd 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 popped out of it. And I was like, you know what? I love this business and I want to grow it. And the reason I wanted to grow. Outside of just, you know, seeing me grow teams and what we could do in the community, it was the fact that the South Gates of LSU location, it wasn't just students

• 1:12:57Speaker 01

  that were coming in. I mean, they'd come in, you know, 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, and he had started like a double drive-through burger chain, like Rally's and Checkers.

• 1:13:33Guy Raz?

  Double drive-through, meaning you pull up and they come out?

• 1:13:36Speaker 01

  Yeah, no dine-in. It's no dine-in. It's just like two lanes of drive-through going in 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 want to be in the rental business. You know, we want to be mailbox money. We're not restaurant operators. You got a great concept. You want to take over these four locations. 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?

• 1:14:06Guy Raz?

  Yeah.

• 1:14:07Speaker 01

  It's like, that's not my crew. That's not our culture. But then I was like, wait a minute. Like, it absolutely is a great way to grow. So I talked to my team and we did it. And then we opened four restaurants in four months. We'd gone from

• 1:14:20Guy Raz?

  Wow.

• 1:14:21Speaker 01

  Two restaurants, four restaurants in four months. And then the next month, on the fifth month, we opened a mall food court in Baton Rouge, the Mall of Louisiana, because I wanted to prove that we could work in mall food courts as well. So that was five restaurants in five months.

• 1:14:33Guy Raz?

  So, once you're in and around, you're all over Baton Rouge now, at some point, you know, within 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? Can I start a location?

• 1:14:50Speaker 01

  Yeah, like crazy, right?

• 1:14:51Guy Raz?

  Yeah.

• 1:14:52Speaker 01

  Because they could see the lines, the restaurants, they loved the product. So people loved 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 an operator, 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.

• 1:15:16Guy Raz?

  Yeah, when did that happen? I mean, we've done, you know, many interviews with different industries in the past. Five Guys, who did Five Guys on the show a few years ago. That model, the franchising model, really is the sort of clearest way to scale a business, rather than try to own and operate every single business, every single location.

• 1:15:39Speaker 01

  Yeah, I mean, that's what I thought. I thought that, too. That was my original plan, you know? And a couple of things happened, and these were some hard lessons to learn when I started all this. So my first expansion, you know, out of the state of Louisiana was around 2004, 2005.

• 1:15:55Guy Raz?

  To Dallas, right?

• 1:15:57Speaker 01

  Yeah, Dallas and Houston. And this is eight, eight, nine years into it. And we got our butt kicked.

• 1:16:02Guy Raz?

  You got your butt kicked in Texas?

• 1:16:04Speaker 01

  Oh, yeah, absolutely. Because, look, I just, I just thought, and this was being cocky, that, you know, we'll just open a location like we do in Louisiana and everybody will come.

• 1:16:14Guy Raz?

  Yeah, of course.

• 1:16:15Speaker 01

  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, and I'm not opening by the campuses there. I'm opening up in Louisville and off of Westimer and expensive leases. And also putting inexperienced managers.

• 1:16:34Guy Raz?

  Yeah.

• 1:16:34Speaker 01

  They never opened in new markets. And I put them there, I didn't support them, I didn't have a comprehensive marketing plan, and man, we lost some money. I mean, we really lost some money, yeah, absolutely.

• 1:16:43Guy Raz?

  Because people just didn't know what it was. It was just another thing, and cars would drive by, people would pass it. They had no idea what this was.

• 1:16:49Speaker 01

  Yeah, they saw a big fancy building. I mean, we're building nice facilities now with a sign that says Raising Cane's Chicken Fingers. And they're like, huh? And those were some hard lessons learned at that point because, you know... I basically got too confident and then we had restart over and I had to go into those communities, help the management better, actually replace some management because they're different skill sets, bring them back to our other restaurants, build comprehensive marketing plans and really go after getting those restaurants to where they actually could cash flow and stop losing us a lot of money.

• 1:17:19Guy Raz?

  Once, once you started to franchise, to pursue the franchise model and you've got people, right, paying you franchise fee and then they open a Raising Cane's shop, there's a risk there where you do start to potentially lose control over how they're gonna operate the business. I mean, there must have been some tension early on with, with, with operators, owners of some of the locations who weren't doing it to your specifications.

• 1:17:50Speaker 01

  Yeah, you know, franchisees, 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 and, and, you know, if you talk about the entrepreneur that, that built this from the ground up, who wants to be done perfect. I mean, I'm a perfectionist. On the deal, there's gonna be tension. But yeah, we had some knockdown dragouts, right? And, and they saw some things different ways. And not on standards, not on 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, and that's actually good

• 1:18:34Speaker 01

  laws in place, you know, to protect franchisees. But it, look, it didn't bode well with me. 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.

• 1:18:54Guy Raz?

  Yeah.

• 1:18:54Speaker 01

  And so, you know, it didn't take that long for me to realize that franchising was not the way that I personally wanted to grow. 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.

• 1:19:12Guy Raz?

  Just out of curiosity, what percentage of your restaurants today are owned by the Raising Cane's corporate?

• 1:19:17Speaker 01

  Yeah, by me, I'm at like 90, I would say 95% is owned.

• 1:19:21Guy Raz?

  Wow. So you really are. It's not, this is not a traditional franchise model at all.

• 1:19:27Speaker 01

  No, no, this is, this is a company-owned model. It started off because of all the obvious reasons to do franchising. It just didn't fit with my personality.

• 1:19:35Guy Raz?

  So as you kind of transitioned from, you know, these few restaurants in Baton Rouge, then to Dallas and further out, I have to assume it wasn't banks that were financing this anymore. You had to become, you had to go raise capital. You had to go kind of look for investors, bigger investors.

• 1:19:51Speaker 01

  Yeah, you know, I had to get clever, right?

• 1:19:55Guy Raz?

  Yeah.

• 1:19:55Speaker 01

  So, you know, this is a long time ago and banks were different. And so 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 Dr. Hill. I'm like, look, Doc, for this location we're going to do, I don't want any other owners in the business. I don't want to give equity, but I'll give you a 15% guaranteed interest rate. Simple loan, one pager, that's going to be subordinated to the bank. So if you lend me $250,000 and subordinate to the bank,

• 1:20:35Speaker 01

  I'll personally sign a note to you, subordinated loan at 15%, and I'll sign it, you know, and you'll have everything I have. And it worked great for Doc. He thought it was a great investment. Now, what I would do with that $250,000 for that subordinated note, Craig would then take it to the bank, and we'd go to these community banks. And basically, that subordinated debt was considered equity.

• 1:21:00Guy Raz?

  Yeah.

• 1:21:00Speaker 01

  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 30 days. I didn't have to pay my food vendors for two weeks, my crew for two weeks. So we got in a rapid growth. I was creating cash and generating cash to put in the locations. And I'd keep going back to these angel investors, subordinated loans, and using, we had a network of so many different community banks all over that we were doing. They wanted that business. Now, that is not the proper way to leverage your company, but I was in my 20s and I was stupid.

• 1:21:35Guy Raz?

  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.

• 1:21:42Speaker 01

  I didn't give up any, yeah, absolutely.

• 1:21:44Guy Raz?

  Wow.

• 1:21:45Speaker 01

  But I got the ultimate lesson on financial security when Hurricane Katrina hit. And we had 21 of 28 late locations go down in the area and that cash flow stopped.

• 1:21:55Guy Raz?

  And you owned them all.

• 1:21:57Speaker 01

  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 have, I could have really, really hurt our company.

• 1:22:13Guy Raz?

  Because you, because you basically took out all these different loans. And so you owed lots of people lots of money.

• 1:22:19Speaker 01

  I owed banks and I owed, owed angel investors that subordinated.

• 1:22:23Guy Raz?

  Right.

• 1:22:24Speaker 01

  Subordinated 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? Luckily, I lived through that. But that's when I really learned to balance risk.

• 1:22:44Guy Raz?

  All right, so about 10 years in, 2006, you've got about, I think, roughly 150 locations in the US, mainly, I think, in the South and Midwest at that point. I want to ask you about chicken for a moment here because you had seen 10 years earlier that chicken was going to be this thing that was going to explode, that people were going to kind of move away from burgers to chicken. That didn't entirely happen. You get the Five Guys phenomenon, there are burger places all over. But I wonder, did the sort of Chick-fil-A Popeyes phenomenon that really began in the 2000s also have that same impact on your business?

• 1:23:23Speaker 01

  Yeah, I think so. You know, it's, you know, it rises all ship. So when Popeyes went crazy, the Chicken Sandwich Wars, right? We're not known for our chicken sandwich, but our sales went up 10 and 15%. Because people were talking about chicken sandwiches and they were coming and buying our chicken tenders. It made people think more about chicken.

• 1:23:40Guy Raz?

  And the Chicken Sandwich Wars, that was really like KFC Popeyes, right?

• 1:23:44Speaker 01

  It was Chick-fil-A and Popeyes when it started, then everybody jumped in.

• 1:23:49Guy Raz?

  That's what I'm wondering. I mean, 10 years in. You are 150 locations in 10 years. Amazing, right? But at the same time, you're watching all of these other competitors introduce new products on their menus. I'm sure people are saying, hey, just do a Cajun chicken version. Just roll it in Cajun spices and offer that. Or offer Cajun fries like Five Guys does. I mean, I'm sure people say that to you all the time. And how are you able to resist doing those things?

• 1:24:16Speaker 01

  Golly, if I could have a dollar for every time someone said, add ranch, add barbecue, add spicy.

• 1:24:22Guy Raz?

  Yeah.

• 1:24:23Speaker 01

  Everything grilled, everything else. These companies keep adding and changing and different ideas. They lose their identity. They lose who they are. I like to say, if you try to be all things to all people, you're nothing to none. You spread yourself thin. And so, one thing too, that's sad in my industry, it's not, it used to be founder-driven. It used to be all the founders of their businesses. And there's very few now.

• 1:24:53Guy Raz?

  Yeah.

• 1:24:54Speaker 01

  And so, when you're a founder, and this is a family business, and you care about your crew, it's a lot of integrity. And so many of these people in the restaurant industry in general, founders get bought up by private equity. 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. And all those things, and it's not really built for longevity. It's built for profit.

• 1:25:22Guy Raz?

  Profits and five-year turnarounds and selling and all that stuff is.

• 1:25:26Speaker 01

  And so, the reason why I never gave in was I knew it was the right thing for us. It's our one love. It makes us successful, and we're going to stick to it. And it holds true. We're the second highest average unit volume in all of quick service.

• 1:25:39Guy Raz?

  Wow. I read some like $3.5 million per restaurant.

• 1:25:42Speaker 01

  Yeah, we're over $4 billion average unit volume.

• 1:25:46Guy Raz?

  And I guess to put that in context, I think number one is Chick-fil-A.

• 1:25:49Speaker 01

  Number one is Chick-fil-A.

• 1:25:50Guy Raz?

  And by comparison, McDonald's is like $2.5 to $3 million per location.

• 1:25:55Speaker 01

  Right, right.

• 1:25:57Guy Raz?

  I know that you've got something like, at the time of this recording, something like 565, 70 locations, maybe more?

• 1:26:07Speaker 01

  Yeah, I think we're at 613. We actually just opened seven restaurants yesterday.

• 1:26:10Guy Raz?

  And growing quickly. Like, in an average year, how many restaurants do you plan to open now?

• 1:26:16Speaker 01

  Yeah, we plan to open 100 to 110 restaurants in the next 12 months and then increase that number.

• 1:26:22Guy Raz?

  And now, when you open them, people know what they are.

• 1:26:23Speaker 01

  Absolutely.

• 1:26:25Guy Raz?

  They're lights.

• 1:26:26Speaker 01

  It's nice having that. You know, we've been in business now for 25 years, so you have people that have actually been to Canes somewhere. You know, we're in like 33 states, and they're just fanatical about it.

• 1:26:35Guy Raz?

  Yeah, well, when you think about it, this journey, I mean, I know you were so motivated, and you were confident this was going to work, but when you now see what you built, I mean, how much of that do you attribute to luck and how much to the work you put into it?

• 1:26:51Speaker 01

  So, one, you've got to have a great concept, and then, two, you've got to 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, help you, and a lot of things come along that's luck, and you take advantage of it, right? I mean, naming the dog, right? That was luck, you know? Our logo comes off a mural I uncovered in the first location renovating it. That's, you know, that was luck to see that, and these are rich things in Canes' history and lore.

• 1:27:17Guy Raz?

  I mean, looking back at your story, I'm not surprised at your tenacity and, you know, all the things that you did and your commitment, and all the people said, "Don't do this," and you were just committed to this. But on the other hand, it is quite amazing. I mean, it is a very straightforward, simple concept. Chicken fingers, fries, toast, coleslaw into a billion-dollar business is quite an amazing thing. I mean, do you ever sort of step back and just think, "Wow, how did that happen? How did they do that?"

• 1:27:50Speaker 01

  Yeah, pretty much every morning when I wake up, you know? I'm so blessed that the restaurant was so hard to start. So, when you have that, you don't take anything for granted. Our projections this year will do about $3 billion in sales, right? And opening another 100 restaurants, and these are all great things, but it still gives me that little bit in my gut, that little scared feeling in your gut, that little feeling that keeps me, you know, waking up and working late and working hard and doing this. So, I'm always blown away by it. I mean, I think the day this doesn't cease to amaze me would 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.

• 1:28:35Guy Raz?

  That's Todd Graves, founder and CEO of Raising Cane's. 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. The current dog is Raising Cane III. And every year from Mardi Gras, Cane III, like her predecessor, Cane II, serves as Grand Marshal of the Crew of Mutts Parade in Baton Rouge.

• 1:29:06Guy Raz?

  Todd, I'm going to give you, I'm going to give you my secret ingredient for my fried chicken. I'm going to tell you. I don't think I've ever told anybody. I'm going to tell you right now.

• 1:29:15Speaker 01

  I can't wait to hear it.

• 1:29:16Guy Raz?

  My secret ingredient for my fried chicken? Ground fenugreek.

• 1:29:21Speaker 01

  No kidding.

• 1:29:23Guy Raz?

  So now that I've told you my secret ingredient, what's in the, what's in the cane sauce?

• 1:29:27Speaker 01

  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.

• 1:29:34Guy Raz?

  Fair enough.

• 1:29:35Speaker 01

  Only me and the dog actually know everything that goes into it.

• 1:29:40Guy Raz?

  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. And if you're interested in insights from some of the world's greatest entrepreneurs, sign up for our newsletter at guyraz.com or on Substack. This episode was produced by Liz Metzger with music composed by Raptine Araublui. It was edited by Neva Grant with research help from Claire Murashima. Our production staff also includes Devin Schwartz, J.C. Howard, Kerry Thompson, John Isabella, Alex Chung, Chris Messini, Carla Estevez, Sam Paulson, and Catherine Seifer. I'm Guy Raz, and you've been listening to How I Built This.