Raising Cane's just surpassed $1.5 billion in annual sales, tripling in size in just four years. The ... [+]
Raising Cane’s is on a growth trajectory unlike most concepts in the crowded restaurant space.
Consider the chain’s sales in 2016 were about $576 million with about 250 units. In 2019, they were about $1.18 billion with about 400 units.
Raising Cane’s just surpassed $1.5 billion in annual sales, tripling in size in just four years. The company is about to open its 500th restaurant.
Even more impressive, average unit volumes are approaching $3.6 million. For context, McDonald’s pulls in about $2.8 million in AUVs.
One could attribute this growth to a few factors. Raising Cane’s operating model is as simple as it gets–chicken fingers, fries, coleslaw, Texas Toast and that signature Cane’s sauce. That’s it. There are no headline-generating limited-time offers here.
There’s also the fact that more people are eating more chicken in general, and so chicken fingers seems like a fortuitous space to be. In 1990, the average American consumed about 61 pounds of chicken a year. The forecast for 2020 is 98.5 pounds.
However, according to co-CEOs Todd Graves (who founded the concept in 1996) and AJ Kumaran, there is a much bigger driver behind the chain’s success–its people. And so, Raising Cane’s is doubling down on its efforts to keep them in the system to the tune of about a $1 million.
The chain announced earlier this week a new iteration of its 10-year-old managing partner program called Restaurant Partner Program. The program is quite robust, covering everything from financial to health and wellness support.
It also includes attractive financial incentives, like the potential to earn more than $100,000 a year in salary and bonuses, and additional benefits based on store performance and profitability. Graves said the program should yield a net worth of $1 million within 10 to 15 years for managers. The goal is simple: to get high-performing operators to stay in the system.
“The companies that excel at what they’re doing are the ones that keep a focus on their restaurant leaders, their customers, their crew and their community. For us, that will never change. Our restaurant leaders are the reason we are able to constantly raise the bar and perform at the top of the industry,” Graves said. “The challenge is to keep that exceptional culture and standards as we grow and we think this is a way to do that.”
The company started putting the pieces together for this program three years ago. Kumaran, who is also the chief operating officer, spearheaded the effort with a sharp focus on making sure those partner candidates have the support they need to deliver sustained strong results. That means six to nine months of training, resources for marketing, facilities, staff training and recruitment, financial advisers, health concierges, balanced work/life schedules and more.
Perhaps the biggest benefit is that operators don’t have to pay to participate in the program. This is unusual for leadership development programs in the industry, according to Kumaran, who said most leadership development programs of this nature cost $20,000 to $50,000 to join.
“We wanted to make sure this was industry leading and that is why we don’t require an investment and why we have a minimum guarantee of $100,000 salary. Not only do our partners not pay, they get a share when they grow their sales and profits. They get a share for growing great people. When they promote someone, they’re compensated,” Kumaran said.
Therein lies the business case behind this comprehensive program. Operators’ compensation comes from growing sales and profits, which motivates them and “guarantees a return on investment,” Kumaran said.
Raising Cane’s has 78 partners that have been with the system since the original program was implemented about a decade ago. In the last five years, those managing partners have grown their profits by over 25%, with some doubling their profits.
“They check off all the boxes for us in terms of building sales and profitability and retention and operating metrics,” Kumaran said. “We want to grow on that. Our momentum from the past several years comes from our partners.”
Graves said the program’s incentive to accumulate a net worth of over $1 million within 15 years is intentional–a message that Raising Cane’s partners will be rewarded for their hard work.
“Being a millionaire has always been that aspirational American dream. This is a challenging job. All of these partners are CEOs of their own restaurants,” he said. “There is a thought that you’ll never make great money or retire in the restaurant business. That’s not true. This is hard work and our partners should be compensated for it.”
Though Raising Cane’s just passed the $1.5 billion mark, Graves said the plan is to build off of this year and reach $3 billion. Further, there are about 50 new restaurants planned to open in 2020 and “even more” next year, with expansion focused on the East Coast–from New England to Florida.
Now that this program is in place, Graves is even more confident these goals are attainable.
“We are adding great leaders and finding and keeping the best talent to build on our exceptional results,” he said. “As we grow, it will come down to having great leaders in place to make sure that growth is executed.”
