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Crazy about chicken: Raising Cane's Todd Graves hires consultants to build a fast-food empire. Does his idea have legs? - Cover Story - restaurant chain


Todd Graves is surrounded by chickens. At his office, they stare from paintings on the walls. At his stores, they lie in parts, waiting for batter and hot oil baths. He sees chickens in his dreams, and marries them for publicity photos.

"I never thought I'd be frying chicken for a living," says Graves, standing outside his Raising Cane's restaurant in Lafayette, a store that is setting sales records in its first two months of operations.


No regrets about the choice. He once wanted to write for television, but now, for Graves, Chickens = Love. Indeed, when your company is set to generate $10 million this year from selling chicken tenders and sides, what's not to love?

But Graves says it's not about the money. It's about spreading the Cane's culture and cooking the best fried chicken fingers he can--the one specialty of his rising chain restaurant.

Graves is ready to spread the food and culture around the world. But before he goes from a total of seven units in Baton Rouge and one in Lafayette to a dreamed-of thousands, Todd Graves has a lot of work to do.

He knows.

In the past 12 months or so, Graves has taken a breather from opening new restaurants to spend his time, and $400,000, on consultants--the suits who make plump salaries for what many would consider the mundane, yet necessary, brainstorming to take a local favorite nationwide.

For the money, the consultants handed Raising Cane's a new logo, a prototype store, a marketing campaign and a new slogan--"One Love." The suits are working on a complex franchise agreement, a document that Graves says will be a blueprint for his chicken kingdom. He also paid for a key training program for new employees and franchisees, a must-have for a company bent on cloning itself through franchising.

And he got one more item for his money--a company handbook, a dreaded and belittled tome most places, but one here that aims to bottle the hip, unchained culture of Raising Cane's first restaurant near Louisiana State University for young employees and college-age customers.

All that consulting help, though, won't guarantee success. In fact, it's more likely that Raising Cane's could fall short of Graves' hoped-for national reach.

"Think about the number of companies that, over the last decades, have become giants," said Howard Bassuk, a franchise consultant and founder of FranNet. "There are not a huge number by any imagination. A lot of companies have substantial growth but have not reached that giant size. It's a rarity."

The food might not sell in other markets as well as it does in Baton Rouge. Graves could end up with inept franchisees, or the business could lose focus. Or not make the switch from running restaurants to building a franchise network.

He knows all this, for the consultants have told him of the potential pitfalls, including about egos destroying businesses. Remember Al Copeland, said one consultant.

The 29-year-old Graves also knows that he doesn't know everything: "I didn't know what the hell marketing was. I knew advertising." He understands that he will have to lure key employees from successful restaurant chains to fill in the gaps.

One thing is certain, though. He has enough ambition.

From an egg

Todd Graves started Raising Cane's with partner Craig Silvey in the mid-1990s. The duo, friends since the sixth grade, graduated from Episcopal High School and went in separate directions. Silvey went to LSU and studied biochemistry; Graves went to the University of Georgia to study telecommunications.

On a camping trip when they were college seniors, the friends decided to become business partners and cater to a market they knew--college students. And they picked chicken fingers because the niche was virginal at the time.

They wrote a detailed business plan, but when they went fishing for bank loans, the lenders didn't bite. So they went to Alaska to work the lucrative but dangerous salmon trade, earning enough to keep their plan live working on ice-encrusted fishing boats. Eventually, they raised some money through friends and others, and got an. SBA-backed loan from Source Capital Corp.

Raising Cane's was hatched, named after Graves' dog. With money to invest, the duo built their first restaurant in an abandoned gas station at Highland Road and State Street. By late August 1996, the upstarts had the routine of producing chicken tenders and fixings down to an efficient science. And on Aug. 28 of that year, at about 9 p.m., Graves and Silvey decided to put their product on the market, opening doors and waving in customers.

It takes months, sometimes years, for a business to show a profit. Raising Cane's earned money in its first month. A second store opened on Lee Drive, and the sales level even surprised Graves. The location does far more than a million dollars in annual revenues.

But, privately, Silvey wasn't happy. He didn't want to fry chicken for a living, and told Graves that he wanted to return to his one love--technology.

"I didn't see it coming," says Graves now. "It smacked me in the gut." For three weeks, Graves walked around in a fog, wondering if he, too, wanted to continue frying chicken for a living. "I decided that's what I wanted to do."

Redoubling efforts, he moved quickly, converting former Fast Track restaurants in town into Raising Cane's drive-throughs. Dr. Richard Hill, a believer and owner of the Fast Track chain, offered favorable financing and business help. Graves opened five restaurants in five months, reaping quick cash to continue growing.

It's the chicken, stupid!

The key to Raising Cane's success is the chicken fingers, which produce Pavlovian slobbering in mere mortals and in "Caniacs"--the corporate pet name for those 15- to 25-year-old devotees who gobble Cane's food four or more times a week.

Why is the chicken so good? For one, it's fried, and fried food works like a slip-and-slide in the mouth, the fat allowing more flavors to hit the taste buds.

Graves' mantra is quality. The chicken, he says, is never frozen, is made from the most tender part of the chicken, is battered lightly and fried just when ordered. Mike Coullard, a friend of Graves and owner of a DeAngelo's Pizzeria franchise in Prairieville, says Raising Cane's success is due in large part to a corporate decision not to cut corners with the food.

"He's committed to providing the best quality chicken he can," says Coullard, who helped Graves sand walls and build countertops at the first Raising Cane's drive-through.

"He's had a lot of offers to buy a cheaper product at a cheaper price, but he's never wavered, never considered changing."

Customers seem happy.

"What makes Cane's stand out from other chicken places is the sauce," trumpets Venessa Bordelon, a fit-as-a-fiddle graphic designer who regularly dined at the original restaurant. "Those little pots of secret orange potion cast a spell on customers," she says.

On the side, Cane's serves crinkle-cut fries and Texas Toast, which is cooked slowly on a griddle, then slathered with butter. "I lika da butta," adds Bordeleon.

At Cane's, you can't buy any other entree. It's chicken tenders or nothing.

Good strategy?

At first, Graves wasn't so sure. Competitors in the fast-food industry--expected by the National Restaurant Association to grow by 3.7 percent to $115 billion this year--were serving burgers along with hot dogs, chicken fingers and seasonal specialties.

So, he asked the consultants, and after much discussion, they all agreed that he should stick with the chicker fingers because customers seem to crave them.

"If they decided to do other products, they would be less valuable," said Tim McCarthy, a consultant who, along with his son, Tim McCarthy Jr., crafted a sales and marketing plan for Raising Cane's.

There are other companies that just do one product. Krispy Kreme and other chains only sell doughnuts, and some fast-food restaurants, like Krystal focus on hamburgers.

Robert Justis, an LSU business school professor who specializes in entrepreneurship and franchising, believes the restaurant can sell just one main product as long as the entree is not a fad, such as bagels. He likes Cane's product.

There's another reason for shying away from a varied menu. Graves says that special items, such as grilled chicken sandwiches, generate less than 5 percent of a store's revenues while throwing off slim margins or losses. To add other items would slow down the kitchen, while adding very little gain in the top or bottom line.

This does not mean that Cane's won't expand its menu. Any additions, though, would likely be spinoffs of the chicken standard, such as a different batter for the tenders.

"We decided not to be all things to all people," said Graves.

A day at the office

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