Apr 25, 2022 · 1h 22m · how-i-built-this
Raising Cane's: Todd Graves
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of How I Built This, Raising Cane's founder Todd Graves details how he transformed a dismissed college business plan into a multi-billion dollar fast-food powerhouse through extreme personal grit, operational discipline, and an uncompromising focus on quality chicken fingers.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 31.4% of the talking time here. How this is scored →
Guy as informed peer 4.7 Guest teaching 3.9 Guest disagreement 1.4 Guy pushing back 1.5
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 33:19 Vehement rejection of premade frozen chicken
Todd immediately interrupts and rejects Guy's premise that chicken could be produced by third-party vendors and delivered frozen, insisting on scratch preparation from raw tenders.
Hardest push from Guy ▶ 20:06 Challenging the founder's early credentialsGuy plays devil's advocate, directly challenging 22-year-old Todd's lack of management experience and questioning why anyone should have believed in his ability to make superior chicken.
Biggest teaching moment ▶ 1:12:53 Explaining the high-risk subordinated debt playbookTodd details the mechanics of utilizing 15% subordinated promissory notes from angel investors to convince community banks to treat debt as equity, enabling expansion without equity dilution.
Guy holds their own ▶ 1:17:35 Contextualizing Cane's AUV metrics against industry titansGuy demonstrates precise industry expertise by contrasting Raising Cane's $4M+ average unit volume against Chick-fil-A and McDonald's benchmarks.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| High School Athletics and Social Adaptability | 3 | 2 | 1 | 1 | Guy prompts Todd on his athletic upbringing in Baton Rouge and aspirations of playing college football. Todd explains how playing sports and doing theater fostered social adaptability and empathy across diverse peer groups. | |
| College at UGA and Southern Culinary Roots | 5 | 4 | 1 | 1 | Guy engages in culinary shop talk regarding roux preparation and restaurant kitchens. Todd details his early hospitality experience as a fraternity kitchen steward and the intense teamwork of commercial cooking lines. | |
| Conceptualizing the Focused Chicken Finger Venture | 4 | 4 | 1 | 2 | Guy presses Todd on how a 22-year-old possessed the maturity to adopt a laser-focused, single-product menu rather than overcomplicating the offerings. Todd credits instinct and his intimidation toward managing sprawling menus. | |
| Business Planning and Overcoming Local Skepticism | 4 | 3 | 3 | 4 | Guy plays devil's advocate, affirming that mentors warning a 22-year-old away from the cutthroat restaurant business offered sound advice. Todd counters that skepticism only served as fuel to work harder. | |
| Collaborating with Exchange Students and Detailing Operations | 6 | 4 | 1 | 1 | Guy shows deep research by reciting the exact names of the Swedish exchange students on the business plan. Todd explains his hyper-detailed operational budgeting down to apron laundry costs and customized pull-apart Texas toast. | |
| Academic Criticism and the 'B-Minus' Determination | 4 | 4 | 2 | 2 | Todd recounts receiving the lowest passing grade in class (a B-minus) because the professor believed fast-food trends demanded broad menu variety and healthy options like salads. Todd remained convinced that specialized focus was superior. | |
| Bank Rejections and Refining Scratch Recipes | 4 | 5 | 2 | 2 | Todd describes humorous rejections from banks while pitching in cheap suits with combination-locked briefcases. When Guy asks if recipes used premade frozen tenders, Todd firmly corrects him, insisting on fresh whole tenderloins and in-house scratch preparation. | |
| Dangerous Boilermaking in Los Angeles and In-N-Out Validation | 4 | 4 | 1 | 1 | Todd details working brutal 90-hour weeks as an oil refinery boilermaker in Los Angeles to self-fund his startup capital. He describes his revelation encountering In-N-Out Burger's streamlined menu as proof of concept. | |
| High-Stakes Commercial Salmon Fishing in Alaska | 6 | 3 | 1 | 1 | Guy brings outside statistics confirming the extreme danger of Alaskan commercial salmon fishing during 1995. Todd shares firsthand accounts of boat collisions and physical exhaustion on the Alaskan tundra. | |
| Securing the LSU Property and Raising Seed Capital | 4 | 4 | 1 | 1 | Todd recounts locking down an old bike shop at the North Gates of LSU and assembling seed funding from boilermaker coworkers, his realtor, a college bookie, and an SBA loan. | |
| Hands-on Renovation, Naming Cane, and Meeting Gwen | 5 | 4 | 1 | 1 | Todd describes hands-on demolition work, naming the restaurant after his dog Raising Cane, and meeting his future wife Gwen, who was managing a competing McDonald's franchise. | |
| Midnight Opening Day and College Community Traction | 4 | 4 | 1 | 1 | Todd shares the frantic experience of opening at 10 PM on August 28, 1996 without advertising once registers were fixed, catching the 2 AM college bar rush and operating on an extreme nap schedule. | |
| Multi-Unit Growing Pains and Craig's Departure | 6 | 3 | 1 | 2 | Guy highlights the notorious operational hazard of moving from one unit to two in the restaurant business. Todd validates this insight, describing how staffing shortages and split management made the second store their hardest expansion phase. | |
| Sponsor Break: SimpliSafe Home Security | 3 | 4 | 1 | 1 | Todd discusses co-founder Craig Silvey's departure due to burnout and acquiring four drive-thru units from Dr. Hill, sparking rapid regional growth across Baton Rouge. | |
| Texas Expansion Missteps and Transitioning from Franchising | 5 | 5 | 2 | 2 | Todd reflects on humble missteps expanding into Dallas and Houston without local brand equity. He explains why friction with franchisees over operating hours and pricing drove him to retain 95% company ownership. | |
| Subordinated Debt Financing and the Katrina Crisis | 5 | 5 | 2 | 2 | Todd details using 15% subordinated debt from angel investors as faux equity for commercial bank loans. Guy notes the immense risk of this leverage, which nearly collapsed the chain when Hurricane Katrina shuttered 21 stores. | |
| The 'One Love' Principle and Multi-Billion Dollar Scale | 7 | 4 | 1 | 1 | Guy benchmarks Raising Cane's unit economics ($4M+ AUV) against Chick-fil-A and McDonald's. Todd emphasizes that preserving the founder-led 'One Love' focus prevented private-equity menu creep. |
Statements from this episode (21)
Todd Graves: Savoie's jarred roux is almost as good as homemade
“I have to tell you, now, most of the time, I cheat, and I use Savoir's Rue in a jar, which is almost as good.”
Graves: Raising Cane's menu modeled Guthrie's late-1960s chicken finger combo
“You know, I mean, if you look at it, our menu is like what Guthrie's originally came back up with, like in the late sixties, you know, it was that chicken finger meal with the sauce and the fries and the coleslaw and the Texas toast.”
Graves: Pull-Apart Dough Makes Texas Toast Moister and Denser Than Sliced Bread
“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 slice, which means it stays more moist and it's more dense, right?”
Todd Graves: Raising Cane's business plan received the lowest grade in class
“And then, you know, a couple days later, we got the grade back, and it was actually the worst grade in the class, but it was only a B minus, right?”
Graves: Adding healthy items complicates operations without driving fast-food sales
“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. That's going to complicate what we're trying to do, and it's not going to equate to sales…”
Graves: Cane's sauce avoided Cajun flavoring to prevent regional pigeonholing
“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.”
Graves: Raising Cane's initial startup cost estimate was $100,000 to $150,000
“Ballpark was a hundred, a 150,000 dollars was what in my mind I thought we could start it for, and that's without knowing the location.”
Graves: In-N-Out succeeded since 1948 while resisting competitor menu expansion
“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 extremely …”
Graves funded the first Raising Cane's with boilermakers, realtors, and a bookie
“Two of my investors were bowler makers that I had worked with. They live, these are like, 10,000 dollar investors, 5000 dollar investors. One was Mr. Red Reynolds, our realtor. Another one was a high school friend that actually worked bullermaking with me out …”
Graves secured a 50-year lease option for Cane's original LSU location
“Yeah, this location was ideal, and cheap rent, I think it was like 1500 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.”
Graves: Raising Cane's made $30 in profit during its first month
“I mean, look, our first month we made 30 bucks.”
Graves: Single fast-food locations cannot build wealth without multi-unit scale
“Quick service restaurants make tiny margins on large volumes. It's just what it is. And look, you can have a whole family working 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 li…”
Graves: Operational friction multiplies exponentially when opening a second restaurant
“I think that's what happens when people grow one to two. Yeah. You know, it's not like their problems double. It, like, it multiplies, you know, exponentially.”
Graves: Raising Cane's struggled heavily during 2004-2005 Texas expansion
“My first expansion, you know, out of the state of Louisiana was around 2004, 2005... Dallas and Houston, and this is eight, eight, nine years into it, and we got our butt kicked.”
Graves: About 95% of Raising Cane's locations are company-owned
“Yeah, by me, I'm at like 90, I would say 95%.”
Graves: Community banks treated Raising Cane's subordinated debt as equity
“Craig would then take it to the bank, and we go to these community banks, and basically, that subordinated debt was considered equity.”
Graves: Hurricane Katrina shut down 21 of 28 Raising Cane's locations
“When Hurricane Katrina hit, and we had 21 of 28 locations go down in the area, and that cash flow stopped.”
Graves: Chicken Sandwich Wars Lifted Raising Cane's Sales 10% to 15%
“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.”
Graves: Raising Cane's $4 million AUV is second-highest in fast food
“We have, we're the second highest average unit volume in all of quick service.”